Well, with your help and that of other prescient and alert people on SI, I have gone a long way towards restoring the family fortunes, Jeez, I was so confident of the overvaluation of the markets (as indeed they were) back in 1997 that I went short against the box on very large inherited holdings of IBM, GE, and some others, and eventually had to cover and pay huge capital gains taxes anyway. (They had been in trust for 25 years so the basis was minuscule). Then I had to sweat out a very large short position in the tech index (XLK) during 1999. Finally my LEAP puts (I also learned about trading options from you, though LEAPS wasn't your choice then) recovered my capital and my QQQ shorts and reshorts through 2000 plus other fortunate choices pretty much doubled that. All sorts of other experiments and trades have been involved, especially catching the energy spike a couple of years ago.
So I am certainly happy to find out about Rydex Juno since the next disaster (I think) is going to be the long bond. It is insane to have that at under 5% with all that money sloshing around ready to set off a 1970s style inflation. If the long bond goes to 8.25%, a 5% percent bond at par goes to 60--a loss of 40%, plus the lodd of purchasing power of that remaining 60%, which could well take it down to a loss of 60% or more of real capital. That might take 5-10 years. At the same time the dollar could be dropping, so in terms of world purchasing power the the loss on the long US bond could be 75%. Rydex Juno should just about preserve real capital.
I still think the way to get ahead is going to be energy, and especially Canadian energy. The Bank of Canada just raised interest rates again, and Canada's oil sands and gas deposits are a Saudi Arabia right next door. And increased energy sales to the US means further strengthening of the Loonie. It could rise to par over several years, and there's another 60% on the upside.
Gold for me is an imponderable. I own it in various ways. But what is it good for? I understand energy because I use a lot of it. I only use a few grams of gold. |
