Up, up, up
Stocks, oil, gold. Everything is going up. I’m making a decent living off of it, but it scares me. Is all of our growth in money supply going into the hands of people who buy ‘assets’ rather than ’stuff’?
I’ll elaborate in later posts, but all of my trading lately is based on two simple ideas:
- Thanks to the profligacy of the american government and consumer, the value of the US dollar is on the way down. The temptation to default on all that debt by ‘printing’ money is too high.
- Economic cycles are not gone, we need them. Capital needs to be reallocated to better managers, and a recession will do that. So I believe we are due a sharp recession.
I also happen to think that our country is acting very irresponsibly in the world, bringing us closer to ‘Apocalypse Soon‘. While I won’t make any geopolitical projections, I am concerned.
So I’m long currencies, gold and oil. I’m short the broader market. I happen to think options on the broad indices are cheap (implied volatilities are too low), so I’ve accumulated a decent number of near the money index puts so I can be long
Well, I’m getting creamed on the puts. But my major holdings, like GSS, GFI, and SU have more than made up for it. When I watch prices climb this fast I wonder: am I watching the dollar devaluation I’ve been betting on? Or am I watching a bunch of lemmings chasing easy money?
I think it is the latter. I am trying to buy more S&P 500 puts today. Taxes will stop me from taking any profits for now.
