Thursday, August 18, 2011

Open Thread

Heat has returned!!! Super muggy here and hot. In the Boston area we would say it is a "skortcha!".

Get your Friday Night requests in as well, we need a good show.

Open Thread
Another ugly day, I can't really recount it all. I posted this last year on November 3rd, 2010 when QE 2.0 went into effect:
"QE has been ineffective in much of anything useful. It has set a real bid under commodities and equities, but those are not reflected in the CPI anyway.

The yield curve will remain steep which will aid the banks in case mortgage losses and putbacks end up not being solved through legislation due to the new makeup of CONgress.

So what does this all mean?

Short Term (next 8 months or so)
-equities will rise
-commodities will rise
-gold and silver will rise
-junk yields will soar

Basically what you have seen for a while will continue on. I can see a scenario where a monster move up occurs in stocks to a blow off top, but I think it will more of the stair step 1% days as far as the eye can see kind of thing. Commodities may see a more violent surge. This is not a good thing but it may support aggregate demand if folks try to stock oil in tanks under their home. You have heard of contango, right?

What can you do? Well, savings are trash and cash is dead. It has been and I had hoped for a more sane policy and reform but then I am a fool. Some ideas:
-Past a POMO day schedule near your desk and if you can day trade move with the POMO schedule as detailed many places like Zero Hedge. One note: this has been so obvious and written about the real players may try and move this around a bit but the vicinity will remain.
-Buy broad equity indices and hold them.
-Buy junk bonds
-Buy bad muni bonds
This is almost Tepper-esque in the "can't lose" sense.

This is not advice. Here is what I aim to do.

I am going to really spend some time looking at buys that I can stomach. This will exclude broad indices and in particular anything financial, housing, or US automotive. I am looking to start trying to get some return on my money that I can play with, plus it would be more fun.

To this end I am using my own way of looking for buys and I will be buying and testing the iBankCoin PPT as another tool. I will test some ideas out on the thing and see how it fits my way of trading. I hope it proves useful.

Long Term (who cares, we are all dead right?)
This move serves as a start of a long term commitment by the FED to markets for support without end. While this did not work well for Japan, things are a bit different here. Nothing over the next year will really get much better in the real economy, but that hardly matters when banks are making serious coin, corporations can get money on the ultra cheap to buy back shares, and expansion overseas where much of the free cash will be deployed will prove a hit."

And here we are today. Not much to add.

Open thread night then. Ask me about anything you want me to answer or talk about and I will tonight in the comments or in this post. If I miss anything I can get to it tomorrow night. If you are on Twitter, find me with @GYSC16, same avatar.

Have a good night.


CT-Hilltopper said...

I'm doing the same as you. Looking for something with some yield that I won't lose my shirt on.

Let's hear some ACDC tomorrow night. Back in Black. YES!!!!

getyourselfconnected said...

High dividend stocks will be super buys soon. After the muni downgrades come, they will be buys as they cannot be allowed to default, but will be at rock bottom prices. No Depeche Mode?

GawainsGhost said...

Those things you think will rise probably will, but then they'll fall. That's the way of the world.

Prices go up, prices go down. The only thing that matters is value.

Return on investment is a myth, if you're not investing in value. Trading, buying and selling on a hunch will get you nowhere.

It's the same with real estate. I know a few people who got rich in real estate. I know a lot more who went bankrupt.

Flipping houses was a scam. People who believed that prices always go up were deluded. No, they don't. Not in any market, not for any commodity or stock or bond or treasury.

Once a reporter asked a famous investor, I believe it was Andrew Melon, what the stock market was going to do. He said, "It's going to fluctuate." Precisely.

For Friday Night Entertainment, I recommend Bachman Turner Overdrive, "Taking Care of Business."

Or Foghat, "Slow Ride." Now that's a rock and roll song.

getyourselfconnected said...

Gawains, the post was a reprint from November, they all went wildy higher.

The Sovereign Bohemian said...

I liked today's post. You are slowly increasing my vocabulary, too! I had never heard of contango...there is a good Wikipedia explanation. :)

My request for Friday is George Thorogood. One Bourbon, One Scotch, and One Beer (or any Destroyers that you like)

Yea! It's almost Friday!

getyourselfconnected said...

TSB, WAAYYYY ahead of ya!

Jennifer Hillier said...

I never know what to request - this place is Classic Rock and I'm always out of my depth. Well, I'll take a shot since it's almost my birthday... how about something by Adele? I'd ask for something by The Band That Must Not Be Named but then you'd hurl eggs at me, and that wouldn't be a good birthday look.

Here's my open thread question: If you won a hundred million dollars in the lottery tomorrow, what would you do with the rest of your life?

getyourselfconnected said...

JH, I would probably be a fishing guide and take people out fishing that have never ever gone for free if I had all that money.