Hello exmedstudent, Regarding this Message 19567857
<<… I agree … staying clear of futures unless you actually need the particular commodity/currency in question for your trade or life.
… how would I bet if I thought the USD will rise against other major currencies?
Off the top of my head, I would say, my portfolio achamchen.com must be adjusted thus … However, I do not believe this is a contingency plan that I will have to implement any time soon :0)>>
The contingency plan may have to be thought about, taken apart and reconstituted in some other fashion, finalized today, and begin to be implemented starting tomorrow … and then, perhaps just as quickly, unwound, reversed, before the primary trend takes gravitational hold of the NAV once again and twice more. I love this world, for it is so bountiful and willing, to be taken again and again ;0)
As in the on-line Unreal Tournament Last Man Standing Death Match Game, sometimes the best time to panic is to panic before everybody else does.
The reason I post an apparent journal on SI is so that:
(a) I can interact with folks who appear to know more about some subjects than I know I do,
(b) I can be influenced when I feel the need to be influenced,
(c) I can avoid some, even if one, fatal error, and
(d) I get a time-stamp for my journal that is ‘official’, so that I can tweak Pezz’s whiskers, trample Maurice’s veggie patch, and pull ACF Mike’s tail :0)
The reason I spend time to talk investment with folks in 3D-space is so that (a) I can …
SI takes less time than 3D, and SI provides more apparent knowledge than 3D, given the time demand differential and share-of-time problem.
You may understandably ask, ‘Jay, what #@!)(*&(*& happened in the last few hours to turn ‘not … anytime soon’ into ‘starting tomorrow’?
The short answer is nothing much. The not much longer answer is ‘opportunity in the form of crisis may be near’.
Interested? Here it is.
The Taiwan-China issue, and how it may inter-play with the N.Korea thing, which together, along with developments in the ME, the twin US deficits that require J6P to borrow and rack up USD 1 trillion new obligations to be cycled back to the WAT-WOT-whatnot engaged fiscal furnace, may create opportunities, but first, panics.
My ‘thunk’ is that the USD may be positively affected and pushed into a counter-trend rally by the flight of Taiwan Dollar and perhaps even joined by private JYen holders to the traditional safety of USD, altogether augmenting Japan central bank effort to lower the JYen vs the USD, thus ripping the shorts of Buffett, Templeton, Soros and many followers to shreds, and then, once the Shorts are naked, and it becomes apparent that the traditional USD safety harbour is in fact not so safe after all due to ME matters, WAT-WOT-whatnot issues, and the ever present deficit elephants in the living room, a greater panic, but in reverse, ensues.
I believe my portfolio can survive the above scenario without adjustment, but I would have to think ‘ouch’ if and when the scenario is close to playing out as described, and so it may be good that I think ‘ouch’ now.
As far as the Taiwan issue itself is concerned, I will stay with the premise I described yesterday:
Message 19564832
Message 19567855
… and remain true to these earlier posts :0)
Message 15001642 <<December 12th, 2000>>
Message 15010048 <<December 13th, 2000>>
Message 15079992 <<December 25th, 2000>>
Message 15080691 <<December 25th, 2000>>
Message 15332625 <<February 10th, 2001>>
Message 15629301 <<April 6th, 2001>>
Message 15839776 <<May 22nd, 2001>>
Message 16124147 <<July 25th, 2001>>
So, no, I am not so much concerned about the Taiwan issue in its singularity, and I have articulated my reasoning, but I am concerned about the mass psychology that may at some point (and soon) be gripped by the apparent and perceived gravity of Taiwan issue, and thus my rising enthusiasm for the subject regarding the event horizon of the Taiwan singularity :0)
Maurice (Maurice, have you gotten this far?) may decide to make fun of my choice of words and phrasing of paragraphs, this time implicitly accusing me of wanting to appear a physicist ;0)
Also, I am not concerned about the possibility of nuclear war over the post-911 after-thought that is Taiwan, but I am enthusiastic that the crowd psychology may be influenced by the nuclear possibilities. The strange quality about nukes, even in lots of one or two, is that they are an affective deterrent to rash action, in a bunch of 200, sobers the mind, no less so than in bouquets of 2,500, else why all the fuss about N.Korea, Iran and Pakistan?
So, bottom line, I believe the USD may be a play of the season, only to be dumped shortly before Taiwan’s election or closed out soon after the same election, or rapidly unwound if the wealthy folks in Taiwan take the issue of Chen Shui-bian off the wagering table.
I cannot put my earlier described contingency plan Message 19567857 into implementation because what I am sensing is not a secular rise of the USD, but a counter-trend rally that will only make the secular fall much worse eventually.
The wood and fuel for a ferocious USD couter-trend rally of material proportions may be already piled high and soaked plenty, and the spark may be evident, and there must be plenty of shorts to be incinerated by the fantasy of multiple nuclear fires.
I am thinking as I type, and perhaps I need to do the following to my portfolio achamchen.com :
(a) Unload my HK shares and recognize the embedded gains
(b) Liquidate JYen and recognize manipulated gains
(c) Lower allocations of CAD and AUD
(d) Increase paper gold allocation %
(e) Fondle existing physical gold in storage
(f) Increase USD allocation
(g) Short ABX puts and refrain from doing same with NEM puts
(h) Remain true to existing shorted NEM covered calls
(i) Hold off pulling the trigger on the ocean view apartment
(j) Think about buying a USD call option from bank that hedges 25% of remaining non-USD currencies in portfolio
(k) Be ready to buy the panic of China/Taiwan/HK/Japan/Korean shares
(l) Be ready to sell the euphoria of USD and resident financial papers
Chugs, Jay |
