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  • MSCI Canada ETF: Safe Commodities Exposure and Much, Much More
    Chasing returns is never a good idea. Sure commodities may have a way to go yet but as leverage implodes so will the appetite for anything but cash. The Fed may be building a commodities bubble as a result of efforts to mitigate some of the pain of the credit crisis but it will be a short lived bubble. They risk dragging the rest of the world into a depression and even commodities won't be worth a heck of a lot then.
    Feb 24 12:38 pm |Rating: 0 0 |Link to Comment |View article
  • Oil and Natural Gas Will Decouple - Big Time
    As John L. says the drive for more oil sands production will have a substantial impact on the use of natural gas. I would be particularly wary of some oil producers that are building oil sands production that uses nat gas and that have not hedged their exposure to that key input. Oil sands production for those processes makes sense when the ratio is 9:1 but not nearly so much when it is 6:1 or less (6:1 being a long term historical average for the gas to oil ratio). There are a few companies working with less nat gas intensive technologies and those are the ones you should seek out.

    Down the road, perhaps methods for methane hydrate harvesting will be workable to supplement dwindling nat gas reserves.
    Feb 24 12:17 pm |Rating: 0 0 |Link to Comment |View article
  • Friday's Turnaround: Raid on the Shorts
    If you want to see illegal trading in the market place just look at the intra-day chart of DNA on Friday before they announced they were fast tracked by the FDA for Avastin's approval. There was a significant wave of buying about an hour before the actual announcement. Do you think someone had some insider knowledge? Absolutely. Same goes for the buy-in to CFC by BAC last year. There was huge call buying right before the announcement was made official. Not only that but there was huge call selling at the next higher strike than the offer from BAC. Do you think someone had insider knowledge? Absolutely. Has there been any prosecution in that case? Absolutely not.

    Unfortunately market manipulation is prevalent in the market place as it stands today. There's manipulation like analysts talking their books, people starting rumors with no factual basis, Fed manipulation, PPT manipulation, and even Ackman coming out with a "plan" to save the monolines is probably based in some scheme. I would be willing to bet he will make a ton of money with some hedge against his monoline short position and the tip of the iceberg surfaced on Friday. In fact, the rumor might have come from him or his staff.

    At the end of the day there are three things to remember: don't fight the system, the trend is your friend, and the enemy of my enemy is my friend. Fighting the system is pointless and a lost cause as evidence by the lack of substantive prosecution for the insider trading that plainly goes on. Learn to read the trends through technical analysis. No matter what someone is doing to the market they can't hide their actions in the volume and the price - that always tells the true tale. Finally, the market will always dole out the most pain possible to the greatest number. The weak shorts are going to get boot stomped here so your enemy (the market) will be your friend when you recognize that overall sentiment is extreme (in this case bearish) and you take the other side of it. That is if you are trading this market. If you are just investing, put your money in your mattress for now.

    I believe that the overall trend is down but this will be a good opportunity to trade to the long side for some quick dough. Just don't forget that overall trend unless you want some market inflicted pain.
    Feb 24 02:10 am |Rating: 0 0 |Link to Comment |View article
  • Book Review: Jim Rogers' "A Bull in China"
    I think the author answered his questions with most of his own theorizing. Anyone long the AUD, NZD, JPY would have profited significantly not to mention the stock listed, funds, etc. Even an investor with the sizable wealth like Rogers would find enough correlated investments and strategies to essentially get long China.

    In fact, the direct China play might be overdone to begin with, particularly given some of the legal or regulatory hurdles outlined. Best to capitalize with the indirect and less obvious instruments. How about trains, planes, and automobiles for instance, commodities, software and hardware, shipping? I'm no where near China but I can still hear a load sucking sound coming from that direction for the foreseeable future.

    I would find it hard to quibble with Rogers's strategies and chance of future success. The best predictor of future success is past success. Hitch your wagon to someone with that kind of track record and enjoy the ride. Just figure out your own workable strategies given the individual circumstances.
    Feb 23 13:40 pm |Rating: 0 -1 |Link to Comment |View article
  • A Short Comment on Shorting
    While I can appreciate aversions in an investing philosophy/psyche, you need to act within your limits - but act you should. If the author believes we are in a bear market, then you need to take actions to manage around that unless you are simply a buy and hold investor. If he is selling calls, that's a good first step. However that's not going to manage the rest of the downside risk to the length held.

    As Zenalgorithm points out, anyone in this situation needs to take out the beta risk and take a short position with respect to a market index. However, the comment about options not being of great value is wrong. You need to employ the right option strategies in highly liquid options.

    I find that using strategies that take out some of the exposure to the greeks beyond just delta are most effective. Use strategies like bull or bear spreads, butterflys, and condors to get what the average active investor might find helpful to manage their market outlook.

    In any strategy though you need to consider your portfolio position, outlook on the market, risk tolerance, time horizon, and manage around all these things.

    All this said, I'd be wary of being short much at this point (unless its short the US dollar). I read the tea leaves that a short squeeze is coming and wouldn't initiate any shorts until the rally starts to wain before the next leg down.
    Feb 23 13:13 pm |Rating: 0 0 |Link to Comment |View article
  • Market Bears Take a Breather
    Amar, I hear what you are saying about concerns regarding growth. I don't share that view. My belief is that stagflation is going to be the concern.

    You are saying worry about nominal growth and not real growth. I'm of the viewpoint that real growth is really all that matters and if you have to inflate things to create growth then you are just building the next bubble that has to implode. If the economy can't grow in real terms, then what is the point? Trying to fool people into believing that all is well when in fact it isn't? You can fool all of the people some of the time...but eventually they wise up. It's at that point that the Fed will be truly pushing on the end of their rope.

    You say that the Fed can get things back on track by re-inflating things but then get inflation in check without hindering further growth at that point? Let's play that out. So in a year when oil is over $150, gold is well over $1000, food prices have perhaps doubled yet again, at that point the Fed will say we have enough growth and they should start raising rates? Bye bye commodities bubble and so long the last leg of the economy. What else is left at that point? Consumers will be tapped out by accelerating long term loan rates (because inflation will be out of hand, as we've already started to get an idea about), gas costs, food costs, and loss of substantial nominal and real equity in their homes.

    Sounds like a recipe for the next Great Depression. Take the medicine when you can, as distasteful as it may be, because you might just find its not strong enough down the road.
    Feb 18 13:47 pm |Rating: 0 0 |Link to Comment |View article
  • Peak Oil: The Next 5 Years
    Very well said Doug M.

    We need to ask ourselves a question though. Why is it that we need to use so much energy? The cheapest and most efficient solution in the long run is conservation. North Americans use about 60% more energy than the average European nation. Think about how much that costs us and saves them on an annual basis. This is an almost entirely unnecessary situation.

    We need to sow the seeds of more conservation and the most effective approach to that is a price shock unfortunately. I think we'll see another one of those this coming summer and it will be interesting to see how much that impacts the psyche of energy guzzling North American's going forward.
    Feb 17 10:40 am |Rating: 0 0 |Link to Comment |View article
  • Ackman vs. MBIA: Self-Serving Propaganda Disguised as Analysis
    I agree with most of the comments here in contradiction to the article. Keep it simple. Has Ackman been right? Yes. Are the monoline insurers in big trouble? Yes.

    Sure Ackman has his own motivations for what he is doing and maybe he isn't getting the fine print exactly right but who cares. Do you really want to trust MBIA or Ambac's executives that they aren't putting their own spin on things? Did you trust Ken Lay or Angelo Mozillo or Tyco's executives or MCI's? I tried to find a list of the worst/most fraudulent CEO's in history and couldn't find one. If we don't keep track of history, aren't we doom to repeat.

    Time will tell who is ultimately right but Ackman is leading by a mile (on a quarter mile track). You can have my share of the cool aid Mr. Kommer.
    Feb 15 15:02 pm |Rating: 0 0 |Link to Comment |View article
  • Beware of the 2008 Sucker Rally
    10. We still don't know what we don't know. Ex. it came out tonight that a syndicate sold the first commercial mortgage back triple A securities since the credit meltdown. The rate on these was by some estimates 4 times the pre-meltdown spread. How many companies holding other securities like these have allowed for that kind of devaluation in what they have on their books?

    11. ROW. I think that since the meltdown began most of the attention has been spent on picking at the US problems. I suspect that the next round of issues (the double dip?) will come from elsewhere in the rest of the world. You don't get blindsided by the bus that you see coming.
    Feb 13 22:53 pm |Rating: 0 0 |Link to Comment |View article
  • Commodity ETF Overview
    For those who trade on the Toronto Stock Exchange as well, there are a bunch provided by Horizon Beta Pro ETF's hbpetfs.com They are all double up and double down. Also, Claymore also has some on the TSX claymoreinvestments.ca...

    There are also the currency etfs like FXC, FXY, FXA, FXB, FXE, FXM, FXF, FXS (because who does want to trade the Krona).
    Feb 13 22:38 pm |Rating: 0 0 |Link to Comment |View article
  • Retail Sales Show Inflation, Not Growth
    The market is trying to make bullishness out of whatever it can at this point. We're at that point in the cycle. It will work until it doesn't work but the fundamentals will always dictate the outcome. Barry has pointed out the fundamentals, and they don't look so good.
    Feb 13 17:17 pm |Rating: 0 0 |Link to Comment |View article
  • Buffett's Offer Won't Save the Monolines
    There are a couple telling features about Buffet's offer. 1) Buffett realizes that the monolines are in such dire straits that they might even contemplate this. How can this be bullish for those stocks or the market? 2) Why did Buffet come public with this proposal? To put pressure on the monolines to possibly accept his offer? Is it to display altruistic intent to make up for his recent gaff of commenting how the US dollar will be worthless? I'm tending to the latter. 3) Why did he do this now? Is he worried that in the near future the monolines will start to go belly up and then he'll have more competition to deal with in some liquidation process?
    Feb 12 12:40 pm |Rating: 0 0 |Link to Comment |View article
  • A Housing Bubble Within a Bubble
    Lots of very intelligent comments here. I second (or third or whatever) a lot of them. My two cents - definitely treat housing as an expense and consumable (but durable) good. Renting costs money and you have the trade off of not having a place to really call your home.

    You should "play the spread" if you want and not go too upscale at this point. Those large homes that folks have been craving are going to be a dime a dozen in the years to come as that study indicates. The spread to smaller, fixer up homes will fall. I also wholeheartedly agree with the comments about location, location, location due to energy costs. It will be key.

    Bottom line, treat home ownership as an economic least cost alternative and not an investment vehicle, and you'll be in great shape.
    Feb 11 10:51 am |Rating: 0 0 |Link to Comment |View article
  • The Fed Won't Save Us, But Here's How to Make Money - Barron's Interview with Jeremy Grantham
    Grantham has the right ideas but even he seems to be missing a key point. The housing market will correct obviously, but it won't be just to the mean. The mean wouldn't be the mean unless there are data points above and below the line.

    To correct for the unproductive employment of capital into over-priced housing the market will have to correct substantially. Either that or the inflation rate will have to be kinked into a hockey stick shape to catch the falling prices. Long gold and short housing will be a play for months to come.

    By the way, that 1100 on the S&P as the forecast for the bottom is what most chartologists would say as the target level. There will be lots of buying support trying to turn the market once it gets there so it will likely be a self-fulfilling prophecy.
    Feb 11 08:50 am |Rating: 0 0 |Link to Comment |View article
  • Are Canadian Regulators Ignoring Fraud?
    While I agree with the general premise of the article, I can't agree that US regulators/law enforcement are really digging their teeth into the whole of the corruption inherent in that marketplace. Perhaps its just the amount of the malfeasance that goes on that they have to limit their investigations to the highest profile cases. However, there is further evidence to indicate illegal activities that goes unnoticed/unpunished.

    Case in point - the trading around Countrywide shares right before the BOA deal was announced. It was pretty obvious that someone with insider knowledge stepped in and bought a bunch of stock and $7 calls (while selling the higher calls). Do you suppose that there will ever be charges laid in that case? This kind of activity goes on on a regular basis but I suppose it too much small-fry for the regulators to even sniff at.
    Feb 04 12:01 pm |Rating: 0 0 |Link to Comment |View article

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