Shopping Day!

So do your part and get to clicking! As people maybe have thought about the things they are thankful for in the last couple of days I had a thought about people also being very worried about their financial situations. How many people have mortgages that are too big, are over extended on credit cards and whatever else you can think of? As you can maybe tell by my thoughts about portfolio management I am very conservative (I think) with personal finance issues. We paid off our small mortgage in Prescott very quickly, have not had a credit card balance since 1992 or 3 and the mortgage on our Hilo house is not even 20% of our income. This sort of approach prevents most problems from ever happening. Similar to my portfolio is down 40% now what do I do, waking up one morning and realizing there is not enough money for the bills is a bad place to be. That is the crux for living below your means. Some people do thrive on that sort of stress, I want no part of it. Different subject. I first made mention of the dollar’s status as world reserve currency changing in some way in 2004. Now four years later the path to this is easier to see (it may not happen of course but things in the US have deteriorated mightily). Here is a snippet from the FT on Thursday about the yen possibly filling that role. I’m not sure what I think about the likelihood of yen becoming a world reserve currency just yet as I believe the vast...

Big Big News…

…We’re moving here! Just kidding. A reader left a question asking about the implosion with Macquarie Infrastructure Trust (MIC), which until very recently was close to an across the board holding, and if there are any implications for, as the reader put it, absolute return. I’ll expand his thought a little to ask about implications for investment products that either should be in their own world or otherwise be a portfolio diversifier. If you care about MIC specifically read the news, also reader RW gave a recap in the comments yesterday. Bigger picture MIC, along with other similar products require access to the capital markets to buy assets and they also need the capital markets to function for them to sell assets, these are transaction oriented businesses often using a lot of leverage. Another layer of complexity with Macqaurie is that they have many many funds listed all over the world with similar a structure and so there has been doubt about the parent bank’s health. Yet one more layer is that Babcock and Brown (BNB.AX) which has a lot of similarities to Macquarie has dropped to about zero. Under all of that MIC just collapsed. As far as implications for portfolio diversfiers; a couple of points I’ve tried to convey is understanding what any of these that you are interested in are vulnerable to and not overloading on things vulnerable to the same risks. MIC is vulnerable to leverage issues and not being able to buy and sell assets. To me that sounds very similar to many of the Canadian trusts (like the hydro funds). That is a...

Big Big News…

…We’re moving here! Just kidding. A reader left a question asking about the implosion with Macquarie Infrastructure Trust (MIC), which until very recently was close to an across the board holding, and if there are any implications for, as the reader put it, absolute return. I’ll expand his thought a little to ask about implications for investment products that either should be in their own world or otherwise be a portfolio diversifier. If you care about MIC specifically read the news, also reader RW gave a recap in the comments yesterday. Bigger picture MIC, along with other similar products require access to the capital markets to buy assets and they also need the capital markets to function for them to sell assets, these are transaction oriented businesses often using a lot of leverage. Another layer of complexity with Macqaurie is that they have many many funds listed all over the world with similar a structure and so there has been doubt about the parent bank’s health. Yet one more layer is that Babcock and Brown (BNB.AX) which has a lot of similarities to Macquarie has dropped to about zero. Under all of that MIC just collapsed. As far as implications for portfolio diversfiers; a couple of points I’ve tried to convey is understanding what any of these that you are interested in are vulnerable to and not overloading on things vulnerable to the same risks. MIC is vulnerable to leverage issues and not being able to buy and sell assets. To me that sounds very similar to many of the Canadian trusts (like the hydro funds). That is a...

Random Thoughts

Perhaps the market will confound people and all of sudden the 6% days will be behind us now. ProShares launched a bunch of new funds including double short yen (YCS), double short euro (EUO), double short broad commodities (CMD), double short crude oil (SCO), double long yen (YCL), double long euro (ULE), double long broad commodities (UCD) and double long crude oil (UCO). I imagine they will be very popular. My most recent TSCM article ran on Tuesday. It was about an interesting long short OEF called Dover Long Short Sector Fund (DLSAX). It is managed by Doug Cliggot and has done very well. I do not own it anywhere but that may change. Funny story; I got back from getting coffee early on Tuesday morning (still in Maui then but back in Hilo now) turned the rental car off and the horn started honking at different volume levels. It was about 7:15 AM, we stayed in the middle of a neighborhood and couldn’t get the car to stop going berserk. Finally I figured that leaving the key in the ignition was the answer. The rental company brought another car out to us. I’ll try to post more...

Random Thoughts

Perhaps the market will confound people and all of sudden the 6% days will be behind us now. ProShares launched a bunch of new funds including double short yen (YCS), double short euro (EUO), double short broad commodities (CMD), double short crude oil (SCO), double long yen (YCL), double long euro (ULE), double long broad commodities (UCD) and double long crude oil (UCO). I imagine they will be very popular. My most recent TSCM article ran on Tuesday. It was about an interesting long short OEF called Dover Long Short Sector Fund (DLSAX). It is managed by Doug Cliggot and has done very well. I do not own it anywhere but that may change. Funny story; I got back from getting coffee early on Tuesday morning (still in Maui then but back in Hilo now) turned the rental car off and the horn started honking at different volume levels. It was about 7:15 AM, we stayed in the middle of a neighborhood and couldn’t get the car to stop going berserk. Finally I figured that leaving the key in the ignition was the answer. The rental company brought another car out to us. I’ll try to post more...