Easter Timing Question

[Lysglimt]

By: Hans LysglimtAs I write this on the morning of April 7 2009 I am still considering when to enter into more aggressive short positions. We are still heavily in cash, gold, gold shares and short positions. Our shorts have been hammered in the late surge in confidence. The strength of the confidence has surprised [...]

More... (http://www.farmann.no/easter-timing-question/)

[goldfinger]

By: Hans LysglimtAs I write this on the morning of April 7 2009 I am still considering when to enter into more aggressive short positions. We are still heavily in cash, gold, gold shares and short positions. Our shorts have been hammered in the late surge in confidence. The strength of the confidence has surprised [...]

More... (http://www.farmann.no/easter-timing-question/)

I think a 10 to max 15 % correction is coming now. I think the nasdaq 100 could retrace to around 1100-1200.

[geir]

I'm still very comfortable with my short position. It is not leveraged, so I can afford to stay in during the swings. I've been hedging actual gold that I hold with short positions on paper the last week. I will cover the gold short position today, because I think we're done with the gold selloff for now. Bernanke is likely to pull some sort of stupid crap again to counter the upward movement in treasury note yields. Gold might benefit from that.

My thesis is still to have a very conservative personal spending. This ride is far from over. My girlfriend and I have a joint monthly after-tax income of CAD$ 8000. In March, we spent CAD$ 1400 in total. Having lowered our monthly expenses to this level gives us confidence that we can last a long time, even if our jobs go away. This gives us time to build our own business, should that happen.

Some tips that made this possible:
- A bike is much cheaper than a car, especially if you can get rid of the car altogether. Even in Canada, where public transport sucks (I never use the buses around here) and you get down to minus 30 degrees in the winter, car-free living is possible. It is much easier in e.g Oslo.
- The library has more books than you can read in a life-time. They also have music and dvds for free. You will be surprised.
- Plan a week of meals at a time, and go to the store only once a week. Have a list of all you need with you, and make sure you bike to the store, so you can't buy more even if you wanted to...
- Buy used. That $400 bike will cost $50 if you buy it from somebody else. For Canadians, kijiji.ca is a great place to buy and sell.
- Don't buy stuff with functionality that you already have. Why buy a dvd player if your computer has already got one and you can hook up the computer to the TV?
- Don't buy "insurance" on consumer electronics. If you have a cash buffer, you can pay if it breaks, and on average the stores make huge amounts of money on these insurances. It will not pay off in the long run, especially if you handle your stuff with care.
- Share stuff with you neighbors. That hammer is used only twice a year, so why should every household have one? Most of the stuff we have is only used occasionally. www.neighborrow.com is a social network for sharing things, which is useful if you can get enough of your friends and neighbors to sign up.
- View things as a burden to carry. I moved to Canada with only the stuff I could carry myself, and that's mostly what I have still. The more you have, the more space you need to store it, and the more time you need to spend to maintain it. It all ends up in a landfill eventually, so try to minimize wasteful consumption.

[goldfinger]

I'm still very comfortable with my short position. It is not leveraged, so I can afford to stay in during the swings. I've been hedging actual gold that I hold with short positions on paper the last week. I will cover the gold short position today, because I think we're done with the gold selloff for now. Bernanke is likely to pull some sort of stupid crap again to counter the upward movement in treasury note yields. Gold might benefit from that.

My thesis is still to have a very conservative personal spending. This ride is far from over. My girlfriend and I have a joint monthly after-tax income of CAD$ 8000. In March, we spent CAD$ 1400 in total. Having lowered our monthly expenses to this level gives us confidence that we can last a long time, even if our jobs go away. This gives us time to build our own business, should that happen.

Some tips that made this possible:
- A bike is much cheaper than a car, especially if you can get rid of the car altogether. Even in Canada, where public transport sucks (I never use the buses around here) and you get down to minus 30 degrees in the winter, car-free living is possible. It is much easier in e.g Oslo.
- The library has more books than you can read in a life-time. They also have music and dvds for free. You will be surprised.
- Plan a week of meals at a time, and go to the store only once a week. Have a list of all you need with you, and make sure you bike to the store, so you can't buy more even if you wanted to...
- Buy used. That $400 bike will cost $50 if you buy it from somebody else. For Canadians, kijiji.ca is a great place to buy and sell.
- Don't buy stuff with functionality that you already have. Why buy a dvd player if your computer has already got one and you can hook up the computer to the TV?
- Don't buy "insurance" on consumer electronics. If you have a cash buffer, you can pay if it breaks, and on average the stores make huge amounts of money on these insurances. It will not pay off in the long run, especially if you handle your stuff with care.
- Share stuff with you neighbors. That hammer is used only twice a year, so why should every household have one? Most of the stuff we have is only used occasionally. www.neighborrow.com is a social network for sharing things, which is useful if you can get enough of your friends and neighbors to sign up.
- View things as a burden to carry. I moved to Canada with only the stuff I could carry myself, and that's mostly what I have still. The more you have, the more space you need to store it, and the more time you need to spend to maintain it. It all ends up in a landfill eventually, so try to minimize wasteful consumption.

The earnings of my company is so far off around 10 %, before expenses, however interest expenses is down, so it's not much of a difference in profits so far. The potential sales price is probably down 60 %, the P/E ratio is around 7. I think this is pretty much the norm all around. That's why I think the first quarter earnings might not be as bad as the market fears, it's a lot of fear, but not so much beef yet. If it progress into japan, and a full debt deflation, then it's a different picture, but I feel we are not there yet. Even the federal reserve have lost control over the economy, I think the market at some point will anticipate a recovery, and that will reintroduce the carry trades, and the huge short position on the dollar, when that happens I suspect the dollar will weaken to a level that reflect some of the bailouts, the IMF money, the stimulation, and all. I rather think that will happen, than that the debt deflation spiral will just go on and spiral out of control. I suspect there will be new bubbles, and that the speculative era is still alive. However, who knows, maybe this time really is different. Just as it was not the fed that brought the market into this recession and possible depression, I think it will be the market that brings us out, probably out of a concern of low real interest rates, or out of high real interest rates in the US and growing profit margins. The period from march 2003 was certainly a bubble. It was not a traditional fed expansion, but a market driven liquidity bubble. I think the same thing could happen again.

[larso]

Interesting page and interesting ideas, but why are you trying to impose a market opinion on people? Especially the shorts are highly dangerous for unskilled operators. The bear rally in stocks may still have some way to go, and in a situation where government bonds seem a lousy bet, why not stocks in a well run company? The monetary breakdown you foresee is the only valid argument for buying gold. The same fear was there in the late 70-ties and we really had to wait a long time to see those prices again, didn't we?

[Lysglimt]

larso - welcome to Farmann.no/forum

You have very good points in that our recommendations might not be suitable for everyone.
The good think about Farmann is that it is a place where people are presumed to think critically for themselves. People are frank on this forum, genuine, and that shines through - you can't fake authenticity.

The markets, by it's very nature, always consists of arguments to sell and arguments to buy at the margin current price.

[goldfinger]

The monetary breakdown you foresee is the only valid argument for buying gold. The same fear was there in the late 70-ties and we really had to wait a long time to see those prices again, didn't we?

I have followed Farmann for some months. It's certainly an interesting forum, but there should be more active members, so please join in on the debates. I use around 15 hours a day just to read and seek out information, and the output from this, it's an intuitive process, is what I base my decisions on, the rest of the time, I don't use for much other than managing some real estate. I think it's impossible to get a grasp on the situation without spending at least a couple hours each day to read. On gold. There is the solvency or 1929 crash scenario. In that gold will perform well, at time time yields on treasury bonds will go down ,and the economy deteriorate from bad to worse, to complete breakdown. I don't believe in that scenario, but it could happen. That seems to me to be what farmann envision right now. Then there is another scenario, where we have a second inflationary boom, similar to the boom from 2003. What I think is that gold will fade, while the second inflationary boom builds and the stock markets in the US recover, I assume it will be a boom in emerging market's like Brazil, Russia, etc. Commodities, and of course a further devaluation in the dollar against the Chinese RMB, that will boost gold, and long term interest rates. I also think it's possible that the Japanese and German consumers enters some kind of spring, and starts to spend big. Property in Berlin, is one of the few things I have some faith in.

[Lysglimt]

Just want to notify that I have not entered into more aggressive short positions quite yet.
I am awaiting the picture to clear.

[goldfinger]

Just want to notify that I have not entered into more aggressive short positions quite yet.
I am awaiting the picture to clear.


Interesting that the dollar got stronger, and climbed with the market for a change, on the Wells Fargo news. I'm smelling 1982. Well, maybe 1950, or 1975-1976. But could be like 1982, think of the potential for exploding profit margins, if the US had a strong dollar boom, after so much inflation since 2003. Dow / Gold back to 1990 levels. Could go down further, but maybe Obama can turn it into more of a Clinton, than Carter boom. Who knows.

[goldfinger]

On the bright side, half of my US stocks gained today, even the dow is down 1,8 %, and my portfolio doing very good, doing only half as bad as the dow. Earlier this year, it was more the opposite, with all green, or all red. Maybe a bullish sign some are buying on weakness, going back to what worked in the past bulls. I don't know. Maybe you have your correction, or end of bear market rally starting now Lysglimt.

Both my gold and silver shares were up today.