Not All Evolution Is Good

I have tried to encourage the growth of this part of the blogosphere in my short time doing this (a little over a year and half). In that time the blogosphere has grown in terms of number of participants and acknowledgement from mainstream media that there can be value added on these types of sites. A big part of this site is the sharing of process by one money manger, me. I write about how I do my job, what I get correct, incorrect and the way I go about learning new things. There are other blogs that are similar to this one that add value. There are some excellent blogs that focus on short-term trading, currency, options, economics and other areas of the capital markets. The spectrum of bloggers ranges from real industry heavyweights to highschool age kids. Neither age nor experience has to be a barrier to providing good content. I am convinced that blogs will continue to add utility to what, as a function of numbers, has to be a an explosion in the number of do-it yourself investors. That being said the reader needs to beware. Not all blogs are worthwhile. Let me be clear that I am not going to name names and I will delete any comment that takes a shot at any other blog. The point here is not to pick on anyone but to create some awareness that there are a few blogs where the input given just isn’t very good. One blog in particular is written in an authoritative tone, implying some experience, but the thought process shared and conclusions...

The Big Picture For The Week Of April 30, 2006

Apprehension about what may happen with Iran has elevated in the last few days. It seems like some markets are pricing in this bad situation escalating but some markets are oblivious for now. Well maybe not oblivious, maybe right in that perhaps nothing bad will happen. Anytime gold spikes up like it did this past week it makes sense to explore whether that type of move is trying to convey a coming problem. Over the last week, Gold, as measured by GLD, was up about 4%. Gold is at an umpteen year high and this last move almost feels like a panic up. Obviously this could change on Monday but this is what has happened thus far. Copper’s chart is also starting to look parabolic. Obviously people don’t buy copper in a flight to safety like with gold but something is driving capital in to the commodity complex. Oil is off of its high but clearly above $70. With the totality of what is going on excluding Iran I think $60 is a high price (I am not saying too high) for oil. I obviously have no idea what the terror premium should be but crude was about $9 lower back in March. An indicator I like to watch is the Aussie dollar vs. the Swiss franc. Both are developed markets but are thought by some to be at different ends of the same spectrum. It is thought that there is less global anxiety when the Aussie goes up vs. the Swissi. Over the last few weeks money has clearly been coming out of the US dollar but the...

Enough!

Can’t CNBC find just one guest that will validate Erin’s idea of increasing the gas tax so she will finally drop...

Reiteration Of A Point

I write a lot about trying to understand how certain things work in an effort to help remove emotion from the process. This chart compares the UK listing of British Pete to the ADR which is a client holding. This week the dollar is down against the British pound by almost four cents. The stock has had a rough week down almost 5% in the UK. Because of the weak dollar in the same time period the ADR is down just under...

I’ve Been Misquoted!

Commodity-Based ETFs Not For The Long Haul – Yahoo! News Another milestone for me is being misquoted in the above article in IBD. A chap named Edward Denson has written a short white paper for UBS titled Should Passive Commodities “Investments” Play A Role In Your Portfolio and his conclusion is no. The above article says I generally agree which I don’t. The writer emailed me the report so I don’t have a link to give. In the interview I described the white paper as being incomplete because there was no mention of changes in demand and the reasons cited by Dr, Denson, I felt, had more to do with logistics of commodity exposure like futures roll than with flaws in the theme. His conclusion could be right for all I know but how can you draw any conclusion without touching on demand? He did say that commodities don’t provide much hedge against inflation and that the price moves are a non-start and offered this chart.I realize his chart is difficult to see but it looks like there is more room for upside based on how these moves have worked before. My primary interests in commodity exposure are the low correlation to equities and the ability to rally in the face of equity market crisis. These attributes serve to reduce portfolio volatility. On a different note, the silver ETF has started to trade today and seems to be off to a good start. I still have a lot to learn about silver. What I know leads me to conclude the fundamentals are more complex than with gold.As this chart...