Sunday, December 12, 2004

Okay - So the Market isnt Moving in my Direction

So the dollar was a bit weak for a while (reaching nearly 1.35 per Euro and nearly breaching the 102.00 on the Yen) - interesting - and steel was a steal (haha, great pun...right) - they went up on dollar weakness.

But something happened - the market went into largely crap companies like SIRI and other Nasdaq stocks. Why?

Because the market is retarded?

No - because there was too much negative short term sentiment in the market for the dollar and the Nasdaq - too many people expected exactly what I expected. The market doesnt acknowledge this with too much kindness.

But I'm holding quite steadily onto what doesnt work - eventually it would work. The dollar is still fundementally a terrible currency. The Chinese and (to a surprisingly lesser extent) Japanese hold the upper hand. The US needs the continued support of these institutions to keep everything moving - Japan and China still hold their net future creditor position even if a total dollar devalution occurs the only country hurt is the United States - those that save and live comfortably can continue to do so. Starting to save when you're running a 6% deficit is hard - and I think it would prove too difficult for the US.

We're going to face our "Suez" moment someday - and against this devastating likelyhood my "insurance policy" as it were is holding stocks that will do well when devaluation time rolls around for the dollar.

I might miss the un-usually bubbly upside of crap companies and stocks like Ebay, Google and all them - but I doubt I'll suffer the concequences of the fall of the "virtual" (read - fake) companies and the re-rise of "reality based" (read - commodities) funds. In fact - if it's that kind of clear cut see-saw type situation - my fund should do well.

I dont really know if that's how it'll turn out - maybe everyone will get dragged down - maybe this will be a deflationary fix (I still doubt it) - in those situations - I'll move my money into fixed income type investments and live quite comfortably.

Eventually - with a LOT of friggin patience - we're gonna have hella high inflation followed by hella high interest rates to tame them.

Comments: Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?