August 4, 2011
There is obviously a lot going on right now and I have some VERY definite extensive opinions as to what should be bought, and what should be sold, but I’m going to keep this letter confined to just a few charts. If you want to hear the reasoning behind what I am recommending, do give me a call.
First up…We liquidated our long held Treasury Bond position today. I won’t put it down here as a formal position, but I pretty much expect to be taking short positions in Treasuries for a while…beginning tomorrow.
Buy the US Dollar
I will only say this: HOW MANY TIMES DO YOU HAVE TO SEE 99% OF THE ANALYTICAL COMMUNITY ALL THROWING THE SAME OPINION AT YOU TO REALIZE THAT ALL THEIR UNANIMOUS “LOGIC” IS WORTH NOTHING MORE (OR EVEN LESS) THAN A PILE OF HORSE MANURE? AND THAT YOU SIMPLY HAVE TO BE AWARE WHEN ALL OF THAT “LOGIC” IS ON THE SAME SIDE OF AN IDEA, YOU NEED TO PUT YOU MONEY ON THE TABLE IN EXACTLY THE OPPOSITE DIRECTION?
As I pointed out repeatedly over the past 6-9 months in bonds, all you ever heard was “Rates are going up. Bonds are going down”. OVER AND OVER AND OVER AND OVER FROM EVERY, AND ANY, SOURCE YOU WANTED TO LISTEN TO…
Now, ask yourself if it is any different today in the Dollar…Basically, EVERY talking head I see is REPEATEDLY telling you, “Oh, the Dollar’s GOT to go down”, like it’s some automatic, no brainer sort of thing…like there’s NO question whatsoever that the Dollar can only be headed south.
I TOTALLY DISAGREE. As I’ve said before, the USA is still the most desired location on this planet. The Dollar is STILL the currency that works on every square inch of the globe as well. It is NOT going to be replaced as the world’s reserve currency by any other piece of paper…CERTAINLY not the Euro which several years ago was being touted as competition for the Buck but is now perhaps in danger (I believe) of ceasing to exist…nor the Chinese Yuan, nor a precious metal…
I could go on with more of my own twisted logic, but I’ll stop here and just go back to my primary statement that all of those same boobs who hated Bonds six months ago are the same people who hate the Dollar now.
BUY THE DOLLAR. Do it using call options and/or futures contracts. I see it at least 15-20 points higher ($15,000 to $20,000 per futures contract) before we get to 2012.
Short Soybean Oil – Maybe I’m wrong but I still think this is going to pay off in a big, big way…You just have to stay on the trade.
And still Short Corn…Some heavy gyrations the past 3-4 months but in spite of all the ultra bullish hype, this market has gone nowhere on the upside…
That’s it for now…I’ve got much more to add but am just getting back in the swing of writing this thing following my fishing trip to Wyoming…So give me a call if you want more detail…I’d also very much like to hear what you think as to the state of the world today.
Buy the Dollar. Fade the “experts”.