Hi Stoctrash, I am in fact not watching a list of Conv because I do not understand them, can not price them, and thus not comfortable. They are not exactly equity and not exactly bonds, and while I know CFOs find them useful, I prefer to mostly remain a buyer of equity and bond.
Despite my two bids out there, I am in fact less committed to equity than before, having sold off residual positions and platinum mining shares and generally just shuffling cash around from USD to EURO/CHF, and added a bit of physical gold. I normally move quite slowly, though in the past two weeks I seemed to be and am in a hurry:
43% Cash (71% US$, 19% Euros, 8% Swiss Franc, 2% AU$) in the form of staggered fix-term deposits;
24% Bonds (mostly US$ denominated emerging market bought back in 98/99, some Euro denominated, collectively yielding above 10% on cost);
24% Industrial real estate (yielding 7% on cost, no debt);
5% Equity comprised mostly of AMGN, AOL, CHL, CMCSK, MSFT, NEM, SNE, and Hong Kong based Hongkong & Shanghai Bank, PetroChina, Sinopec, Phoenix TV, Citic Pacific; I have NEM short December Put/Call (20/22.5) options positions;
4% Metals (69% platinum, 31% gold).
Short term (days), I am aiming for 60/40 or even 50/50 USD to Euro/CHF cash, 5% metals with all additions in gold, and will most likely add China shares by and by. I see a bounce trade in the US should The Day happen, but otherwise am staying clear of the epicenter and have no plans for long term commitments.
My hedge against USD devaluation is in fact being increased to a bet for the USD devaluation. Should matters deteriorate for the USD without compensating circumstances (war in ME), the bet may later turn into a speculation through use of leverage. I do not think I will have much of a chance to reach this last stage because I expect the USD to devalue suddenly, given the number and amount of hedge funds out there high on leverage already. I believe these funds will force Greenspan's trembling hands.
The China shares in HK (H shares) are going for 5-8 times earnings, and the same shares are going for 30-60 times earnings on the Mainland A share market. For example, new issues will be listed by the oil companies on the mainland at 'inflated' P/Es, and the correspondingly equivalent H shareholders in the same companies will get a free ride on mainland cash aggregation. I do not ever see my China share exposure go above 10% of NAV, ever.
The threaders here will tell you I move very slowly, because I do not know what I am doing. I am feeling the stones while crossing a murky river on bare feet.
Chugs, Jay
Reference earlier allocation:
Message 16169328 |
