Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: bullbud who wrote (84917)	9/10/2008 10:05:45 PM
From: SouthFloridaGuy	5 Recommendations Read Replies (2) of 116555

There has also never been this much hot money in the sector as well. If you look at the top holdings of the top hedge funds, they are all commodities and even the most respected money managers like Ken Heebner bought in right at the top. Goldman Sachs has been putting out an index called the "VIP" index, which tracks the 50 or so biggest holdings of hedge funds. They were all commodity related names. This was bound to happen. Now investors are running scared and pulling their money and just wanting to hold cash. This causes forced selling. This is what deleveraging is all about. We're seeing the same thing in the short dollar position, the rise in financials on an aggregate basis. Everything is inter-related whether we know it or not. I totally agree with you that the prices don't make sense and so if you're not leveraged and you have long term fundamentals on your side (NZ just cut rates and others will follow), then it's time to get long commodities equities, no doubt. Right now the XAU gold stocks index could easily rise 35% without any move in the price of gold. The move from 150 to 110ish is completely unjustified by the fundamentals.

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