Hi IG, Music?! Oh, you mean the gentle meandering Hitchcock tunes I often refer to:0)
I hear happy music down the valley, at the seaside village, where the party spirit is still strong, keeping P/E at mid to high double digits. Uncle Al is, as ever, providing the sauce that keeps the party going. The real estate industry is busy passing out the latest bull chants, "RE is solid, immune to slow down, underpinned by demand, good investment, supported by FED, and is liquid, as long as you got location, location, and location".
The hollow echo reverberating from the walls of the arena ... "Tech is solid, immune to ..."
In the distance, I see a gentle propagation of a wide frontage wave coming inland, the wave front narrowing as it comes in, speeding up, and rising in height.
More seriously, I am about done with arranging and rearranging the pieces that constitute my order of battle, and there is really nothing more to be done. I got my (27%) USD and (15%) non-USD cash, (25%) bonds, (24%) industrial/commercial real estate, (5%, approximately 50/50) physical Pt and Au metals, and (5%) equity (NEM, MSFT, AOL, AMGN, CHL, SNE, CMCSK, PetroChina, Sinopec, HSBC, Phoenix TV). I know, the whole lot adds up to 101%, due to roundup error (my metal and equity positions are slightly less than 5% each, and bond less than 25%). I also have NEM December Put 20, Call 22.5 short positions equivalent in value to 20% of my NEM long position.
Separate from the above order of battle, I have purchased a Euro call 0.95 Feb 25th 2002 to hedge 25% of my confirmed business’ income over the next six months. I have a total bank debt level of effectively (3%) nildotzero at a monthly adjustable interest rate of 4.75% secured against my primary residence. I have confirmed Japanese, Indonesian and Philippines credit lines, ready to be drawn down at any time if and when these sick currencies manage to bounce against the USD.
I have also told my wife to watch the budget, and cut way back on the treats. No complaints so far, just hurried and obedient reaction, given that she has seen what some friends of ours are doing and planning.
I would observe that I am ready for just about anything.
Am I a bull? No. Bulls will be BBQ-ed.
Am I a bear? No. Bears will sleep through the spring and go hungry.
Am I scared? Yes, because I believe we will all take a serious hit no matter how we are positioned. The degree of damage is a matter of (70%) luck, (25%) position, and (5%) subsequent movements. We will be hit via business income decline, employment/career devolution, asset value deflation, currency debasement, debt delinquency, or divorce.
Am I terrified? No, because with the proper positioning, chaos becomes opportunity, and utter chaos becomes a gift.
I am not and have never really been good at trading, on daily or weekly basis. My very limited past trading success was honestly attributable to a (70%) rising market, (25%) luck, and with the remainder accounted for by quick footed movements.
I do agree that the situation in the US is not appearing dire or even nearing critical. I am out here, in the arena that saw too many bloodbaths, and this coming one looks particularly nasty. Should the storm pass without causing damage, I will be amongst the most disappointed, but also the happiest. I want this storm to pass without causing damage, because I do not know I will survive any and all damage.
There is no music where I am crouching, just the occasional whistling of the wind, and the atmosphere is cinematically suitable for fighting the FED. There is nothing more to be done except waiting, I do not know for what, but I do know the specifics of “the what” does not matter: Inflation, deflation, V-recovery, W-false hope, or L-anguish.
Nothing matters now. Only the impending epic, cataclysmic, choreographed, slow motion fight. I generally do not make large and fast moves, to preclude the possibility of tripping over.
Chugs, Jay |
