Hello John, <<Why are you selling your AUD for CAD? >>
I am generally a slow and well-diversified allocation player. I, by reading, listening to others, and reflection, try to figure out the macro scene, and then I am triggered to action by any number of seemingly random events or conversations.
My allocation on April 23rd, 2002 was just so,
Message 17360779
<<Cash 44% (38% Euro, 11% CHF, 9% AUSD, 3% HKD, 39% USD) >> where the individual currency %s adds up to 100%, … that is heavy in the Euro/CHF space, and not light on the USD/HKD territory.
I started to ‘panic’, for lack of better word, at around this point:
Message 17432522
<<May 7th, 2002
… I just made some fairly large-step treasury operation moves for business and personal a/c, generally out of USD and CHF, and into AUD.>>
… that resulted in this allocation on July 23rd, 2002:
Message 17784195
<<Cash 42% (37% Euro, 26% USD, 21% AUD, 7% CHF, 3% HKD, CAN 5%, Paper Gold 0.2%)>>
By late 2002, I was positioned thus:
Message 18388681
<<Cash 34% of gross assets (16.2% Euro, -1% USD, 8.5% AUD, 3.8 % CHF, 3.2% HKD, 2.1% CAN, 1.2% Japanese Yen)>> I changed display format at this point, where all individual currency %s are % of gross asset
… but believed so:
Message 18344188
<<December 17th, 2002
NAV is now up at 9.34% YTD.
Gaining 30% when all are gaining 29% is not nearly as fun as scoring 9% when most are down 20%;0)
Looking back on the year, it all seemed so simple.
Just do the most obvious paired trades:
(a) long Euro, short Dollar;
(b) long Gold, short Yen;
(c) long Aussie, short HKD;
(d) long Annaly (NLY), short QCOM;
(e) long Pakistan Stock Exchange, short NYSE;
(f) long War, short Peace;
(g) long Busts, short Recoveries;
(h) long Fleckenstein, short Abby Jo Cohen; and
(i) long Marc Faber, short Greenskaput.
What could have been simpler? and yet some folks argued until they were blue in the face, as if we were trying to do them harm; and then they ran out of air;0)
Oops, I forgot, Maurice said it all is not a zero sum game, and so let me paraphrase Daily Reckoning, let us count our blessings now and may we count them again 12 months from now:0)
What are the obvious trades for 2003?
My tentative guesses are to:
(a) long Gold, oil/gas, and China;
(b) gently add Argentina and other resource shares;
(c) be ready to buy Brazil and Russia;
(d) long MO, short QCOM;
(e) long Canada, and
(f) short everything else.>>
I got nervous about the Euro at approximately this point:
Message 18598841
<<February 19th, 2003
Hello Pezz, Today's Report:
(a) Decamped another lot of troops, this time from their European base to the Canadian front line, and moved another small unit of rangers from the US to Canada. Happy with the 23% gain of loot so far, hoping to loot more in Canada:0)
Rates for today's transaction:
CAD:USD 1.5089
CAD:EUR 1.6128
Today's moves completes my shift out of much of my Euro position and some of my AUD.
I hold a residual EURO position of 4.81% of gross assets, down from 15.8% on February 10th tally Message 18559470 , and
AUD at 4.51%, down from 9.7%, and
CAD now at 4.96%, up from 2.2%.
The enormous balance of financial soldiers is sitting in HKD (16.84%, up from 3.5% of gross asset), waiting, for what I do not know, but waiting for something.
On the Euro, it has gone up a lot since I took up positions, should consolidate a bit, retrench some, take a breather for a while, or can always be hit with some unforeseen event, like a small Euro country wanting to pull out or something, who knows;0) Will wade back in when it is time to swamp back in, maybe soon.
The currencies, remember, are supposed to grind against each other and slip against gold. We shall see if they indeed do grind and slip;0)
<<Do you have a reason to prefer longer term the CAD over AUD?>>
As hopefully indicated above, with regard to currency moves, I have an OK track record for a non-economist and a wannabe-hedge fund manager, going mostly by instinct and feel ;0) … and now, between Canada and Australia, after both small commodity currencies have had a good run against the USD, for the big picture, I feel nervous that Australia has chosen to follow the path of big government, high taxes, pre-emptive wars, archipelago and island interventions, and xenophobia, whereas Canada has few burdens other than its generous social benefits.
Canada, in aggregate, on balance, is perhaps a bit better in fundamentals than Australia, its burdens a bit less, and its welcome mat a bit more welcoming.
In the small frame I noticed that when the USD rises against the commodity currencies recently, it rises more against the AUD, and when the USD goes down against the same currencies, it goes down more relative to the CAD.
So, stuff Australia, and hello Canada, even though the latest move messes up my diversification for a while (I realize that I am looking at a potential harmful mistake).
<<I am suspicious of the US economy rebounding and not convinced the world GDP is on the mend>> ... you are either polite or suspicious:0) I am not at all suspicious that the US economy is rebounding. I am suspicious that the economy is just doing a rigor mortis burp, and that it will tend to lead the world into economic stagflation and monetary cataclysm. This feared scene is not necessarily a bad scene, as long as one anticipated and made appropriate hedging preparations for it.
<<I do not see evidence that the excesses of the 1990's in the US have been eliminated>> … you are again being polite. I see plenty of evidence that the excesses are getting much worse, passing TPonRr, and well on way to TeoTwawKi (see definitions at Message 18586475 ).
<<… am watching capital chase capital markets and not be put to work in productive assets>> … well, here I am OK with the situation, because we get to participate, and practice achamchen.com because Message 18243386 <<just is, again and once more, ad infinitum, ad nauseam, so on and so forth ... et cetera, and then it starts all over again, or, as they say on Wall Street, ABRACADABRA>> :0)
I feel somewhat trapped, facing the need to be simultaneously high cash, and yet surrounded by ugly currencies, while gold is begging for taking-profit.
Today, after the latest treasury operation of yesterday Message 19262006 harvesting HKD and trimming gold and buying CAD, and a few days ago Message 19252161 selling AUD for HKD, I am at:
Cash 36% of gross assets (1% Euro, -0.4% USD, 1.1% AUD, 6.2% HKD, 25.2% CAN, 3% Japanese Yen)
Physical/paper Precious metals 12.6%
Bonds 13.5% (12.9% USD, 0.8% Euro, valued at lower of cost and market)
Rental Real Estate 20% (valued at cost)
Equity 18%
As opposed to a few days ago, Message 19258475 . So yes, I did just make what I consider to be a big move, as my moves go.
After all that explanation, I will probably get hit by SARS in CAD, gold will rise to USD 400/oz, and AUD will float up by 20% ;0/
It is a dangerous world out there, but there is no such thing as a null-position, even if we are at 100% cash allocation.
Oh, and BTW, yes, I can be easily panicked/bluffed out of my present crawl-space.
Chugs, Jay
[KEY WORDS: CASH MOVES] |
