regarding LEAP/E2020 and their GEAB newsletter, let's consider the excerpt you posted, from september 16th, 2007:
"When the 'dust' of the current financial market collapse will settle down, operators will see that the US economy is whirling down, while the Eurozone has essentially weathered the storm. Asia will then be in a very uncertain position namely due to consequences of the financial crisis on exports and currencies, as the USD will resume its spiral downwards."
we can start by asking whether the dust of the crisis has settled down yet. but let's do a close reading and imagine investing at that time based on what they said in the excerpt.
"...the US economy is whirling down..."
when an economy whirls down, maybe you short equities. this bulletin was published 19 trading days before the all-time high in the sp500. as of now, the index is 49.8% below that high, and 46.7% below the open on the day after the bulletin was published (which was a sunday).
"...the Eurozone has essentially weathered the storm..."
is this a recommendation to buy european equities? i'd say no. hold them? maybe. that would have been a loser. but if you didn't buy european stocks based on this, then your losses would depend on how much you had to begin with.
"...Asia will then be in a very uncertain position namely due to consequences of the financial crisis on exports and currencies..."
what do you do based on these words? well, the mention of exports suggests selling or shorting equities. the nikkei and the shanghai are way down, as are other asian indices. that would have worked.
"...as the USD will resume its spiral downwards..."
the dollar (DXY0 on my screen) opened at 79.65 the next day and was as low as 71.31 ten months later, having previously gone even lower than that. then the sharp rally began to more than 88. being short the dollar from the day of the bulletin did not produce a loss until a year later. but staying short would have cost you.
so, maybe the excerpt suggested to (1) short u.s. equities, (2) hold european equities but do not buy more, (3) short asian equities, and (4) short the u.s. dollar.
i'd say overall the results would have been net positive. |
