Saturday, October 31, 2009


I have taken several months off from blogging and must say I miss the daily interaction with readers and am glad to be back. I have been telling my friends that I am reducing my holdings in stocks and believe that we could be headed for a 1987 type crash in the near future. Am I crazy? Well those of you that saw my call on UNG may think so. I lost a lot of money on that trade.

How do I recover from my losses, by analyzing what I did wrong and making another play---essentially living to play another day and by being smarter on the next trade.

I really thought we were headed for a period of massive inflation and I chose to play that through natural gas. Was I wrong on my inflation play? Was I wrong that inflation would begin with the decline in the dollar? I think I am still on the right track, but I think we are in for a very weird period first. Right now we seem to be in a quagmire whereby the strength in the dollar will hammer the markets? Wait a minute---doesn't Larry Kudlow scream for King Dollar every night? If the dollar strengthens, we lose two components that really helped earnings this quarter---exports and the boost from the exchange rates for companies earning in other currencies. If that shoe drops, we quickly find out that this market got overvalued in a hurry and the future isn't so bright. 700 on the SP by years end? Stay tuned.

I will have more this weekend and I am glad to be back. We will be bringing you interviews again in the very near future.
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