Call me lazy or that I have other things to do, but this new administration is on a collision course Most capitalist have known this all along, but now someone has taken the time to "do the math".
What this means is the middle class that zealously voted this mess in are now going to reap what they sowed. When they finally realize the mess they are in, it will be no hope or change.
So that everyone knows my politics here. I think both parties are corrupt and sell us down the river any chance they get. There so that shows I am not partisan here.
For me to trade off of this, it is very obvious we are heading for very troubling times. This does not bode well for equities or housing or just about anything. If you are the many reading this that have not got your house in order, then you will pay the consequences. This rally we are witnessing the past few days may very well be your last chance to get your house in order. If you do not know how, get some help. But make sure the help you are getting is from those few that understand. If your advisor is from the company line you are going to get hammered big time (if you have not already)
Best of luck to everyone. So far this year has been pretty good.
Thursday, February 26, 2009
Tuesday, February 24, 2009
Best comedian
Uncle Ben hands down.
I read this and could not stop laughing or is it LOL!
Anyways, this coming from the same man that told us sub prime was contained.
I think he is on the same stuff most everyone else is on. Trying to make it legal.
On a serious note, I did mention to watch for the inevitable "New thing" from Washington to give hope (pun intended) only to be dashed.
So looks like 410 billion more and uncle Ben's words will give those late comers one more chance to salvage what is left of their "buy and hold" portfolio. Will they take advantage of it? Will they secure a future for themselves? Well if I were a betting man (as a trader I am sort of) I would bet against them. Instead look for more whining and more gov. intervention.
As a capitalist, I just hope there is any "free" company around to trade when all this is said and done. If not, I may have to trade like Rogers in Chinese "communist" stocks. Oh the irony huh?
I read this and could not stop laughing or is it LOL!
Anyways, this coming from the same man that told us sub prime was contained.
I think he is on the same stuff most everyone else is on. Trying to make it legal.
On a serious note, I did mention to watch for the inevitable "New thing" from Washington to give hope (pun intended) only to be dashed.
So looks like 410 billion more and uncle Ben's words will give those late comers one more chance to salvage what is left of their "buy and hold" portfolio. Will they take advantage of it? Will they secure a future for themselves? Well if I were a betting man (as a trader I am sort of) I would bet against them. Instead look for more whining and more gov. intervention.
As a capitalist, I just hope there is any "free" company around to trade when all this is said and done. If not, I may have to trade like Rogers in Chinese "communist" stocks. Oh the irony huh?
Monday, February 23, 2009
11 year low
Dow index, S&P index, it is coming unglued.
Normally consumer staples hold up in a recession, not now. Wall Street journal has a good article.
I am not so sure which banks, insurance companies or any financial institutions are immune. I guess the only question is which ones can survive. Not thrive. There are many listed by various analysts that are in dire straits. Just remember the states have "reinsurance" or guaranty agencies for your insurance products. However, you will need to read the policies and notice the "guarantees", because that is all you are getting if the insurance company goes under. I have in the past had people approach me and complain that they got an unfair settlement. Again remember it is the guarantee and not the projected....
These are interesting times. I preach constantly about this happening. I only hope some listen, obviously the majority are not, but then that is why the few make money in the markets.
If you have not made adjustments to your portfolio to the downside, you may need to be patient here for the next "official announcement" to have the market rally and then get in. You may not have this luxury. We could go to S&P 500 like a hot knife through butter. I doubt it, but confidence is not there.
Normally consumer staples hold up in a recession, not now. Wall Street journal has a good article.
I am not so sure which banks, insurance companies or any financial institutions are immune. I guess the only question is which ones can survive. Not thrive. There are many listed by various analysts that are in dire straits. Just remember the states have "reinsurance" or guaranty agencies for your insurance products. However, you will need to read the policies and notice the "guarantees", because that is all you are getting if the insurance company goes under. I have in the past had people approach me and complain that they got an unfair settlement. Again remember it is the guarantee and not the projected....
These are interesting times. I preach constantly about this happening. I only hope some listen, obviously the majority are not, but then that is why the few make money in the markets.
If you have not made adjustments to your portfolio to the downside, you may need to be patient here for the next "official announcement" to have the market rally and then get in. You may not have this luxury. We could go to S&P 500 like a hot knife through butter. I doubt it, but confidence is not there.
Saturday, February 21, 2009
Fundamental Analysis-Market "Means"
Investments swing from over valuations to under valuations, back and forth continually. What we want to do is find the mean and trade it. One of the best ways is the P/E ratios. P/E stands for price to earnings. If a company has 1 million shares and earns 1 million dollars, that is a p/e of 1. So if the stock were trading for 10 dollars, we have a p/e ratio of 10.
If you are still awake keep following here. Over 70 plus years of countless costs and time and energy spent, many "smart" analysts have concluded that the average p/e is about 18 or so (there are many arguments as to precisely what that number is). So when you get a p/e of 20 for example, you are paying too much and we would expect a drop to the mean of 18, but in order to have a mean we know the p/e will shoot past the 18 into 16 or so. That is how you get your mean.
Now we just came off a 48 S&P average p/e.....Repeat this 48!!
If the average is 18, does this give you an idea of where the low would be expected?
Now is what happens is stocks drop, then earnings drop which makes stock p/e's pricey once again so stocks drop etc.
Myself? I am looking for 8 p/e or so before I expect the next bull market. At that time, you can buy and hold again for the next decade and have fun. Until then, we still have much more pain here folks. Last I checked we are at 20.
That is just the way it is. Bubbles go to far and corrections go to far.
As an investor, I personally cannot wait on the sidelines for another 5-10 years for the next bull to gain traction. I want to capitalize on this. So I trade from the short side. Some day there will be a time to go long.
What we are witnessing now is stocks being priced a bit high only to have the earnings season show less than analysts expected, forcing prices down until the next earnings round. This feeds on itself until most everyone gives up and the mantra changes to stocks are a suckers game etc. that is where you would expect 8 p/e's and you would expect to get on board to a new bull market.
If you are still awake keep following here. Over 70 plus years of countless costs and time and energy spent, many "smart" analysts have concluded that the average p/e is about 18 or so (there are many arguments as to precisely what that number is). So when you get a p/e of 20 for example, you are paying too much and we would expect a drop to the mean of 18, but in order to have a mean we know the p/e will shoot past the 18 into 16 or so. That is how you get your mean.
Now we just came off a 48 S&P average p/e.....Repeat this 48!!
If the average is 18, does this give you an idea of where the low would be expected?
Now is what happens is stocks drop, then earnings drop which makes stock p/e's pricey once again so stocks drop etc.
Myself? I am looking for 8 p/e or so before I expect the next bull market. At that time, you can buy and hold again for the next decade and have fun. Until then, we still have much more pain here folks. Last I checked we are at 20.
That is just the way it is. Bubbles go to far and corrections go to far.
As an investor, I personally cannot wait on the sidelines for another 5-10 years for the next bull to gain traction. I want to capitalize on this. So I trade from the short side. Some day there will be a time to go long.
What we are witnessing now is stocks being priced a bit high only to have the earnings season show less than analysts expected, forcing prices down until the next earnings round. This feeds on itself until most everyone gives up and the mantra changes to stocks are a suckers game etc. that is where you would expect 8 p/e's and you would expect to get on board to a new bull market.
Friday, February 20, 2009
Confidence issue
We are now at the level of no confidence. This is a bad scenario. People tend to hord at this phase. for the consumer shell shocked, savings appears to be the only way out. So they start to pay down debt. It is a fantastic idea. We have been so low on savings that it is about time. Problem is this will aggrevate the already slowing economy. To all of those pundits I say "too bad" the last 10 years was a phantom prosperity and we are headed for tough times but a good foundation to grow from.
"Tea party" this link says it all.
When you get this sort of reaction you know confidence is gone.
For those new here, read past blogs. If you are not, stay the course.
"Tea party" this link says it all.
When you get this sort of reaction you know confidence is gone.
For those new here, read past blogs. If you are not, stay the course.
Thursday, February 19, 2009
A problem with analysts....
I am talking analysts that are not paid by the usual sources i.e. investment firms, media etc. are sometimes stubborn. I fit in the stubborn category. As a trader you have to. It does not always pay off.
I need to stick with my opinions of the markets until proven otherwise. At times that means a severe draw down (loss on the portfolio) before I give up the trade.
This does not mean to say that I go down with losing trades, to the contrary, I am stating that in order to stay in this and become profitable, you need to take an opinion almost always contrary to the masses (after all the masses are most of the time wrong) this takes courage in the face of almost every outlet of information you get (that is unless you get your sources off the beaten path).
I like to have 12 or so analysts that I like and when they agree on any particular sector, I jump on it. Most of the time they are in agreement, often times they are not.
I need to stick with my opinions of the markets until proven otherwise. At times that means a severe draw down (loss on the portfolio) before I give up the trade.
This does not mean to say that I go down with losing trades, to the contrary, I am stating that in order to stay in this and become profitable, you need to take an opinion almost always contrary to the masses (after all the masses are most of the time wrong) this takes courage in the face of almost every outlet of information you get (that is unless you get your sources off the beaten path).
I like to have 12 or so analysts that I like and when they agree on any particular sector, I jump on it. Most of the time they are in agreement, often times they are not.
Wednesday, February 18, 2009
75 billion for housing
I just keeps getting more rediculous.
At what point do these central planners say enough is enough?
Last I read, between what has acutally been given and what has been promised to prop up this mess could pay for 90% of the mortgages out there.
If they take and pay off mortgages and all debt, they could easily double your taxes and still have the biggest boom.
At what point do these central planners say enough is enough?
Last I read, between what has acutally been given and what has been promised to prop up this mess could pay for 90% of the mortgages out there.
If they take and pay off mortgages and all debt, they could easily double your taxes and still have the biggest boom.
Tuesday, February 17, 2009
Selling puts (one more time)
Since I have suggested selling puts on UYG, there has been several asking about this. So much so, that I felt another post about selling puts were in order.
Selling puts is a bullish (want the stock to go up) move. Since I would be assigned the stock (have to buy it) then I would want the stock to be on the move up. Selling calls the opposite.
Everyone knows I am a bear at this time in the cycle. So why be selling puts? UYG is an ETF of financial stocks. Financial stocks are being hit very hard. But the expectation is that financial stocks will still be around. CITI may not, but financials will. It is the job of the ETF managers to see that there will be some around after this problem.
So if we think that eventually someday financials will rebound, we will want to be there. If the stimulus works and everyone starts to spend again, it could be real soon. If it does not work, we could be in for a longer span than most want to admit.
If I sell 3 or 4 strike puts on UYG, I receive premium in my pocket. If UYG goes to 1.00 I am now down from the 3 range now. But when I roll (buy back the front month and sell the next month, I should get around .30. I am doing this with a total of 3.00 in cash held in my account (earning interest).
I have done this with stocks before rolling out for years. The biggest fear is that the stock goes to zero and you have to buy a worthless stock for 3. However each month that you roll gets you closer to a no cost trade. If you are collecting .30 each roll, then in theory 10 months the trade should be free.
Will the financial sector be around for 10 months and will this stock still have value by then? That is the probabilities we are working with.
Selling puts is a bullish (want the stock to go up) move. Since I would be assigned the stock (have to buy it) then I would want the stock to be on the move up. Selling calls the opposite.
Everyone knows I am a bear at this time in the cycle. So why be selling puts? UYG is an ETF of financial stocks. Financial stocks are being hit very hard. But the expectation is that financial stocks will still be around. CITI may not, but financials will. It is the job of the ETF managers to see that there will be some around after this problem.
So if we think that eventually someday financials will rebound, we will want to be there. If the stimulus works and everyone starts to spend again, it could be real soon. If it does not work, we could be in for a longer span than most want to admit.
If I sell 3 or 4 strike puts on UYG, I receive premium in my pocket. If UYG goes to 1.00 I am now down from the 3 range now. But when I roll (buy back the front month and sell the next month, I should get around .30. I am doing this with a total of 3.00 in cash held in my account (earning interest).
I have done this with stocks before rolling out for years. The biggest fear is that the stock goes to zero and you have to buy a worthless stock for 3. However each month that you roll gets you closer to a no cost trade. If you are collecting .30 each roll, then in theory 10 months the trade should be free.
Will the financial sector be around for 10 months and will this stock still have value by then? That is the probabilities we are working with.
Monday, February 16, 2009
Japan recession more severe than thought
Europe and Asia had a down day as we spent the holidays relaxing.
What will this bring for tomorrow? Not sure. But for the week it should be a wild ride.
With the stimulus passing, there should be much fanfare. How long it lasts will be the key. Most agree (at least in my circle) that this will not work. But then we have been wrong before. Once again if you are to nervous, stay in shrot term treasury money markets. If you want to take advantage of this, using options limits your risk while allowing you to take sides of the issue.
Here is a thought. Go long with 80% of your portfolio, and then buy 3x inverse ETF's for the balance, this should give you a pretty good hedge, then sell calls against the ETF and against the portfolio (hopefully your portfolio is in an index like SPY) this way you can gain premiums as the market swings back and forth.
Not what I would likely do, but it does make for some sense to those nervous.
What will this bring for tomorrow? Not sure. But for the week it should be a wild ride.
With the stimulus passing, there should be much fanfare. How long it lasts will be the key. Most agree (at least in my circle) that this will not work. But then we have been wrong before. Once again if you are to nervous, stay in shrot term treasury money markets. If you want to take advantage of this, using options limits your risk while allowing you to take sides of the issue.
Here is a thought. Go long with 80% of your portfolio, and then buy 3x inverse ETF's for the balance, this should give you a pretty good hedge, then sell calls against the ETF and against the portfolio (hopefully your portfolio is in an index like SPY) this way you can gain premiums as the market swings back and forth.
Not what I would likely do, but it does make for some sense to those nervous.
Saturday, February 14, 2009
Food for thought
Federal Obligation exceeds world GDP
If that does not scare you into taking some action with your finances, I do not know what would.
But again we will have head fakes all along the way down. If you missed this weeks drop, wait as the masses jump on this stimulus propaganda. Once that hoopla wears off and the fear starts to take hold again, take the short side.
I have followed this website for a few years. Take a long serious look at the shadow government statistics website. It gives you some perspective as to what you "sense but cant put a finger on it" is happening
If that does not scare you into taking some action with your finances, I do not know what would.
But again we will have head fakes all along the way down. If you missed this weeks drop, wait as the masses jump on this stimulus propaganda. Once that hoopla wears off and the fear starts to take hold again, take the short side.
I have followed this website for a few years. Take a long serious look at the shadow government statistics website. It gives you some perspective as to what you "sense but cant put a finger on it" is happening
Friday, February 13, 2009
You want these guys to take care of you?
Latest news....Only one house or senate politician admits to reading the 1 thousand page pork. Yet they are in session to vote on this right now.
Some one give me these guys their addresses, I have some great Real Estate they can invest in with fantastic terms. Don't worry about reading the contracts they are good as my word.
Anyone that still believes we are not headed for some serious financial woes has their head in the sand.
This market is very hard to trade. Up on a rumor down on a fact, up on another gov bailout only to be crushed by reality.
If you are a fast trader (which I am not) you can be nimble enough to get in and out. If you are more like me, buying options will get you killed with the gyrations.
Take the conservative side and hedge the strategy.
Some one give me these guys their addresses, I have some great Real Estate they can invest in with fantastic terms. Don't worry about reading the contracts they are good as my word.
Anyone that still believes we are not headed for some serious financial woes has their head in the sand.
This market is very hard to trade. Up on a rumor down on a fact, up on another gov bailout only to be crushed by reality.
If you are a fast trader (which I am not) you can be nimble enough to get in and out. If you are more like me, buying options will get you killed with the gyrations.
Take the conservative side and hedge the strategy.
Wednesday, February 11, 2009
Perusing the internet
The topic of this huge stimulus (if you can call pork stimulating then I guess) many sides are being drawn in the sand. Either this will work and has inflation like the 1970's or it will not work and we just added debt to our great gandchildren to pay back. Either way the argument for fiat currencies to collapse looks in the books.
Some comments from others say "well if the entire world is in the same boat, then the Dollar will keep its value relative to the other currencies. To this I have to agree. But because the dollar stays par to a collapsing Euro or pound, does not mean it is keeping par to tangibles. Gold, Oil, Grains etc.
So the question that needs to be addressed here is. Are we inflationary or deflationary? If you have no idea or do not want to guess until proven, then stay in short term treasuries. If you feel this will be inflationary, go long tangibles. If you feel we are deflationary, short things.
While it is my belief (and it can change over night) that we are in deflationasry times, the rush to gold as a hedge (fear here) should keep the prices where they are. Record bullion sales and record ETF hording have me convinced most do not trust what is coming out of politicians mouths. So the hedge is on.
Some comments from others say "well if the entire world is in the same boat, then the Dollar will keep its value relative to the other currencies. To this I have to agree. But because the dollar stays par to a collapsing Euro or pound, does not mean it is keeping par to tangibles. Gold, Oil, Grains etc.
So the question that needs to be addressed here is. Are we inflationary or deflationary? If you have no idea or do not want to guess until proven, then stay in short term treasuries. If you feel this will be inflationary, go long tangibles. If you feel we are deflationary, short things.
While it is my belief (and it can change over night) that we are in deflationasry times, the rush to gold as a hedge (fear here) should keep the prices where they are. Record bullion sales and record ETF hording have me convinced most do not trust what is coming out of politicians mouths. So the hedge is on.
Tuesday, February 10, 2009
Treasury
I can see why this guy messed up his turbo tax.
Not very inspiring words were there.
This baby is going down. Dow below 5,000 and the S&P around 500. The financials will lead the way and the rest will go with them.
Long puts and stay the course. There will be a trillion here a trillion there but to no avail. Take each rally as a chance to get short. This could get dicey real fast. If you do not have the stomach for this, stay in Short term treasury money markets. I k now these returns are a pittance, but at least you have your original investment intact. Sometime the best position to be in is cash.
Not very inspiring words were there.
This baby is going down. Dow below 5,000 and the S&P around 500. The financials will lead the way and the rest will go with them.
Long puts and stay the course. There will be a trillion here a trillion there but to no avail. Take each rally as a chance to get short. This could get dicey real fast. If you do not have the stomach for this, stay in Short term treasury money markets. I k now these returns are a pittance, but at least you have your original investment intact. Sometime the best position to be in is cash.
Monday, February 9, 2009
Dow to 5000, S&P to 500
Gone is the euphoria of 30,000 dow. Gone is the nasdaq catching and surpassing the dow. These have all gone by the way side. Now is the time to either gather what is left of your assets and stay in short term treasuries, or take advantage of the downside and trade that way.
In the newsletter next week I will go into many reasons for the indices to continue down. With the run up we have had of late, it might be a time to get more short positions.
Diagonal puts, calendar puts, etc.
In the newsletter next week I will go into many reasons for the indices to continue down. With the run up we have had of late, it might be a time to get more short positions.
Diagonal puts, calendar puts, etc.
Friday, February 6, 2009
Understanding your risk tolerance
"Anonymous" made an excellent comment that I would like to expound upon.
While the DOW they believe will trend up they also believe the stocks will trend down.
As an investor you need to decide (even if this is managed money, the manager needs to understand your wishes)what you want to do. Obviously "Anonymous" is trading the market and trying to capture some movements. I have at times approached this way too. I have a neighbor that works for the SEC. His claim is that we have already dropped enough that he is interested in getting back in. I said I expect 5000 on the DOW before it is over. He calmly said to me, the DOW has already dropped enough that even if I am early it has still done 80% of the damage.
Now his risk of not being in the market when it runs is more over powering for him then the risk of a potential 10-20% more drop. Is he wrong? Not at all. In fact when I was rolling clients 401ks that they had no control of into income funds way back in May of '07 he stayed in until Aug of '07. If he gets back in now he is fine with this.
I use this only as a long response to what others are thinking in this market.
As anyone knows I am ultra conservative in my approach. That is my risk tolerance.
GE puts anyone? If you missed it, don't try it now.
Later
While the DOW they believe will trend up they also believe the stocks will trend down.
As an investor you need to decide (even if this is managed money, the manager needs to understand your wishes)what you want to do. Obviously "Anonymous" is trading the market and trying to capture some movements. I have at times approached this way too. I have a neighbor that works for the SEC. His claim is that we have already dropped enough that he is interested in getting back in. I said I expect 5000 on the DOW before it is over. He calmly said to me, the DOW has already dropped enough that even if I am early it has still done 80% of the damage.
Now his risk of not being in the market when it runs is more over powering for him then the risk of a potential 10-20% more drop. Is he wrong? Not at all. In fact when I was rolling clients 401ks that they had no control of into income funds way back in May of '07 he stayed in until Aug of '07. If he gets back in now he is fine with this.
I use this only as a long response to what others are thinking in this market.
As anyone knows I am ultra conservative in my approach. That is my risk tolerance.
GE puts anyone? If you missed it, don't try it now.
Later
Thursday, February 5, 2009
GE-Puts
I do not know about anyone out there in the real world, but I will not sleep a wink until Geithner unveils his plan. By golly jees wiz guys a man that cant get turbo tax right is going to show little ol me just how this game of economics is played.
Is their any capitalists left? Are we a dying breed? Is the road to ruins paved in socialism our only way? Alright already I did mislead the post with GE.
Okay now Ge is imploding. 10.88 or so as I write. If it goes below 10 it will be a candidate to be excluded from the all boys club of the Dow industrial. So who cares they were taken off once before.
My point here is that GE is probably an okay run company other than a few over leveraged entities. They should weather the storm okay. Selling Mar. 7.50 puts for .37 is not all that bad considering that you will have to have about 4.00 for every option so that is not quite 10%. For those more aggressive, the 5-7.5 spread will cost 2.50 and is right at 10% and for those that have not listened to option trading and want to lock in a 10% dividend and sell the calls more power to you. The point is, this may be a good one.
Is their any capitalists left? Are we a dying breed? Is the road to ruins paved in socialism our only way? Alright already I did mislead the post with GE.
Okay now Ge is imploding. 10.88 or so as I write. If it goes below 10 it will be a candidate to be excluded from the all boys club of the Dow industrial. So who cares they were taken off once before.
My point here is that GE is probably an okay run company other than a few over leveraged entities. They should weather the storm okay. Selling Mar. 7.50 puts for .37 is not all that bad considering that you will have to have about 4.00 for every option so that is not quite 10%. For those more aggressive, the 5-7.5 spread will cost 2.50 and is right at 10% and for those that have not listened to option trading and want to lock in a 10% dividend and sell the calls more power to you. The point is, this may be a good one.
Tuesday, February 3, 2009
If not you then who?
Who is going to take control of your finances?
I hear it all the time. what should I have done? Well first off, if you think guys (some gals) that cannot even get their taxes right (Dodd, Daschle, Gunt...whatever) but are in charge of our nations trillions, are in the know, think again. This is just a glaring example of central planning. Both parties are guilty of this. I for one do not like either party. The republicans had control for 12 years and we still went the wrong way.
Why all the political junk in my post? Because if you do not take control, or at least have some one competent to do this, then you are going to be stuck with morons at the helm that either are corrupt(my personal view) or are so inept that they could not find their way out of a room with 500 doors.
You have a small window of opportunity that is closing very day to take advantage. Either you are in the financial crisis, or you are in the opportunities. If you do not want to understand and have no faith in the same old financial advice that 99% of planners give (remember your long term strategy, hold for the long term etc.) then park your assets in short term treasury money markets until this passes.
I hear it all the time. what should I have done? Well first off, if you think guys (some gals) that cannot even get their taxes right (Dodd, Daschle, Gunt...whatever) but are in charge of our nations trillions, are in the know, think again. This is just a glaring example of central planning. Both parties are guilty of this. I for one do not like either party. The republicans had control for 12 years and we still went the wrong way.
Why all the political junk in my post? Because if you do not take control, or at least have some one competent to do this, then you are going to be stuck with morons at the helm that either are corrupt(my personal view) or are so inept that they could not find their way out of a room with 500 doors.
You have a small window of opportunity that is closing very day to take advantage. Either you are in the financial crisis, or you are in the opportunities. If you do not want to understand and have no faith in the same old financial advice that 99% of planners give (remember your long term strategy, hold for the long term etc.) then park your assets in short term treasury money markets until this passes.
Monday, February 2, 2009
Economic stimulus
Wasn't it just 4 months ago we were told that all they (central planners) needed 700 billion and all would be well? This is getting so absurd it reminds me of the part in the jerk where Steve Martin is walking out a broken man and saying "all I need is this phone, and this whatever it was, but as he was walking out it was more and more and more.
We are told now that a mere 900 billion (you see politicians have learned the sales skill. Do not ever round up, you know only 19.95, not 20 bucks) It would be much easier to call it 1 trillion but then that would be misleading of 100 billion somewhere. Not to worry, they will get there so we might as well start talking in trillions. Many pundits are throwing around numbers all over the place. The number I like is the 3 trillion for '09 deficit. Are we there yet? Have we finally gone bankrupt?
Then a read some knot head spouting off that the American consumer is saving more now but that is bad for the economy. It is stupidity like this that has us where we are. If I save a buck, it has to go somewhere. If it is in the bank the bank lends it out, if it is in a business it gives employment.
Why bring this up? Well if you look at bonds, they tanked the past week and prior weeks as well. This is simply too much debt and treasuries sloshing around out there and so supply and demand. This is telling me at least that more and more folks are cleaning up their debt. Something those idiots in DC should be doing but no....
What this does for investing means it will be a long time before the retail sector begins to rebound, or the building or the banking. However, have no fear. If we feel that these sectors have been hit hard enough, it just might be time to do some long calendars or selling puts if the price of the underlying is low enough i.e. UYG.
If I were to buy and hold these sectors, it could be a long time to get the reward I want. But by selling close month calls I can now collect premiums. In order to do this I need a large amount of capital sitting there gaining a pittance in interest. I can either buy the underlying thereby lessening the capital required, or buy a far away option to cover the sold close months.
On another note, Gold seems to have broken out. Did we miss it? I did, but then I usually miss the beginning on things. Not to worry, when it pulls back get in.
The dollar is sitting on a bounce here. Will it continue or will the multi year slide once again take over? I have no clue. Many analysts I respect are on differing sides on this. Time will tell. Once it does, I intend to get in using ETF's. See the Philadelphia stock exchange for the symbols for these
We are told now that a mere 900 billion (you see politicians have learned the sales skill. Do not ever round up, you know only 19.95, not 20 bucks) It would be much easier to call it 1 trillion but then that would be misleading of 100 billion somewhere. Not to worry, they will get there so we might as well start talking in trillions. Many pundits are throwing around numbers all over the place. The number I like is the 3 trillion for '09 deficit. Are we there yet? Have we finally gone bankrupt?
Then a read some knot head spouting off that the American consumer is saving more now but that is bad for the economy. It is stupidity like this that has us where we are. If I save a buck, it has to go somewhere. If it is in the bank the bank lends it out, if it is in a business it gives employment.
Why bring this up? Well if you look at bonds, they tanked the past week and prior weeks as well. This is simply too much debt and treasuries sloshing around out there and so supply and demand. This is telling me at least that more and more folks are cleaning up their debt. Something those idiots in DC should be doing but no....
What this does for investing means it will be a long time before the retail sector begins to rebound, or the building or the banking. However, have no fear. If we feel that these sectors have been hit hard enough, it just might be time to do some long calendars or selling puts if the price of the underlying is low enough i.e. UYG.
If I were to buy and hold these sectors, it could be a long time to get the reward I want. But by selling close month calls I can now collect premiums. In order to do this I need a large amount of capital sitting there gaining a pittance in interest. I can either buy the underlying thereby lessening the capital required, or buy a far away option to cover the sold close months.
On another note, Gold seems to have broken out. Did we miss it? I did, but then I usually miss the beginning on things. Not to worry, when it pulls back get in.
The dollar is sitting on a bounce here. Will it continue or will the multi year slide once again take over? I have no clue. Many analysts I respect are on differing sides on this. Time will tell. Once it does, I intend to get in using ETF's. See the Philadelphia stock exchange for the symbols for these
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