Friday, August 28, 2009
I would like to REITERATE that I am almost entirely in CASH right now except for the portion of my portfolio that is SHORT (against weak areas of the markets). Despite the fact some of my posts have felt rosier lately, I am extremely bearish for the next long while.
The deflationary side of this Greatest of Depressions (Yes I am calling it that for a reason) will come back soon, and it will come back with a bitter vengeance. I recommend cashing out now while you can, buying short term treasuries with some of your money and cash with the rest.
The price of gold and silver are going to suffer some serious blows as a result of this, and you can bet that this will be one of the best opportunities of our lifetimes to pick up these rare and valuable assets are remarkably low prices. As always I am more bullish on silver as it is a much more finite resource and still doesn't even have the monetary premium that gold has on a market level (there is 1 ounce of gold per human above-ground on earth, and only 1/6th of silver).
If you do have the stomach, now is the time to get your Short-selling ducks lined up in a row. I am using long-term puts for the most part and will probably scoop up a few shares of ultrashort ETFs as well. But I'm anticipating agonizing market lows for all the perma-bulls out there, so I will leverage those losses with my options calls.
I said it will be "interesting" when the traders come back. I mean it. If you know anyone who has heavily bought into this rally please forward this information to them and urge them to even take SOME of their profits now. It is running out of steam very very fast. We are at the top of the track folks, the clicking of the lift has stopped and there is nothing but gravity for a long ways from here....
As always if you have any questions please email me and I will reply at my earliest convenience. I'll be posting a few more trades early next week.