Saturday, February 19, 2005

Should have told ya

I'm buying the following.

CPV --- 26.65
NLY --- 19.28
GGB --- 17.90
AHM --- 31.50
TMA --- 29.01
RWT --- 57.70
IMH --- 20.02
SIGM ---11.80
NOVL --- 5.90
CLF --- 65.59


CPV, NLY, AHM, TMA, RWT, IMH are mine...for good or for bad. CPV especially - a good idea.

GGB, SIGM, NOVL, CLF are M buys.

This is built as a combination income and growth device.

NLY, AHM, TMA, RWT, IMH are all somewhat levered income generators. Essentially they borrow short and lend long - and the difference is what I get as a dividend. Greenspan has called this position good ONLY for those who WANT to lose money.

I'm betting that these highly levered version of banks arent gonna feel too much of a pinch - on the other hand - they arent cheap. Not yet. The bad news hasnt hit them yet.

So on the one hand - they arent cheap. On the other - there's bad news all around it and the stock prices are holding up decently well.

I bet that the banks cry Uncle before anything bad happens - Greenspan is always up for keeping the economy feeling good with that oh so good MZM - maybe even M3 if he's feeling generous and can do it.

CPV - holding correctional properties...wow. I'm gonna be an owner of a company that owns PRISONS. Amazing aint it?

Overall - what do I see coming down the pike?

I see the bad moon rising. I see trouble on the way. - CCR

I think what we're gonna get is simple - a recession caused by the Federal Reserve. It took 18 months for the "good stuff" to get the feet into the economy - we kept on hearing that time period when short rates were falling - what makes it any different on the upside?

We're gonna see a massive contraction in the current global economy. The emerging markets have been doing too well - so have commodities.

Expect that to change in an instant. US consumers are gonna go bust - and take China and Japan with it. Japan can weather such a storm. China wont. It'll take oil, steel and a few other plays out with it. The dollar will be stronger. GOLD TOO may be stronger.

What we wont expect is that the Euro will be weaker. And bonds will do really well all around (except Euroland bonds).

This will save the above mentioned portfolio - until then the ride can be quite rough and tumble.

Of course - I might be wrong.
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