Hello EP, now I am worried, and am glad that I am essentially still high cash (though of the non-USD variety) and gold (which is just another variety of cash), and silver ETF (which is effectively cash still?)
I am also high-ish (as in material, as in ouch if they all drop by 15%) on oil sand / energy plays: Canadian Oil Sands, Paramount Resources, Petrobank, Connacher, Blackrock Venture, Woodside, Australian Worldwide Exploration, Energy Resources of Australia, Southern Cross, Suncor, Petro Brasil, Vermilion, Fording, and Peyto.
I have tolerable (ouch if they drop by 20%) mining positions Agnico Eagle, Pan American, Silver Standard, Golden Star, and Newcrest.
I have tolerable odds & ends positions Bangkok Aviation Fuel, Record Investment, Australian Wheat Board, Archer Daniel Midland.
Now, my worries, which is the same as everyone else’s, that:
Roach is positive;
Buffett says he wants to lessen cash by buying shares;
Received today from friend regarding his bright hedgie acquaintance re commodities:
QUOTE
It should be scant surprise to anyone that commodities were the driver of our results for the month. If you got it right the gains were breathtaking. Our quant commodity portfolio posted its largest gain since February 1999, driven by the surge in metals prices. Commodity oriented stocks, which dominate both our quant and discretionary equity portfolios, also did well.
We think, however, that there is good reason to be concerned about these markets, and we are being much more defensive in the discretionary part of the portfolio. Reasons for our caution are many – February 1999 results were followed by March, the worst month for quant commodities in our record.
Our proprietary measure of the risk to a broad trend-following portfolio has increased more in the last month than at any time since the 1988 grain bull market, which also ended in tears. Price gains have run beyond most measures of fundamental tightness in many markets. The popular media is on commodity watch 24/7, and the financial markets are quick to produce product to take advantage of the frenzy.
So what have we done? We have cut back our oil services position, we have cut back our sugar and corn positions, we have reduced our exposure to the metals, and we have purchased out of the money put exposure on one of the broad based long only commodity indexes. What we have NOT done is short this stuff on a net basis – indeed we are still modestly long. This thing can move higher and further than is rational. We continue to maintain our exposure to world equity markets, but our position in large cap tech, expressed with options on the QQQ's, was hit this month by Microsoft.
One last note - the principal flag bearer for the global imbalance/impending world disaster camp appears to have thrown in the towel this week. Now that's scary.
UNQUOTE
Chugs, J |
