PERMANENT MARKER FOR WHAT IS TURNING OUT TO BE THE WORST MACRO CALL I HAVE EVER MADE IN MY INVESTING CAREER....
(I placed this text in the subject header on 9/28/07.)
As of 9/19/2007 ..and for the first time in 25 years, I have liquidated every one of my long positions in U.S. stocks, using the 50bps rate cut inspired rally on 9/18 as an opportunity to get out. I am now net short, with a long position in GLD (proxy ETF for gold bullion) as a currency hedge.
PREDICTIONS (posted 9/21/2007)
I am posting these in the header to create a timestamp and an easy way for anyone to judge my prognostications of economic/market conditions over the next few years.
1) We are entering a secular bear market in U.S. real estate and equities. I believe that Bernake's ill-fated decision to lower interest rates coming off the greatest asset bubble in history was a bell ringing. Stocks may get a little knee-jerk traction in the short term, but they will inevitably head lower...significantly lower.
2) Much like the real estate collapse is starting in rural areas and heading towards urban centers, the stock market will begin falling apart where the seller of finished goods meets the consumer - stocks of major retailers, then head down the supply chain.
3) Commodities will head higher as the torch is being passed from the declining consumer-driven economy of the United States, to the growing Asian, European and LatAm economies. Also, the U.S. stocks that run countertrend will have good exposure overseas.
4) Before we hit bottom in real estate, there will be at least one news story of a house/condo trading for $1.
5) Gold will continue its inverse relationship to the dollar, and at some point, accelerate. Gold will trade for over $3,000/oz. |
