Wednesday, 16 June 2010

Position Update

Have not changed any of my positions.


Have some more grey hairs over all the positions, but am hanging in there at this stage.

I like the AUD and the NZD, I think they still have legs to recover back to 0.9000 and 0.7500 respectively.

I like the carry trades. But have been beaten up hard in May. The trick with carry trades is to hold on to them. They return between 4 -5 % pa. The rate has to fall that much every year to lose out. That has never happened. Some years down, some years up, but never down every year. So as long as you can afford to wait, you cannot lose. If you can wait 10 years, the rate has to fall 50% for you to be behind. So the secret is to hold them until the rate recovers again. It has worked for me many times.

I'm not so in love with being long GBP. But I think the budget will lift the GBP. So I will wait a while yet.

I also like the euro. The worst of the sovereign fears are now priced in. The fall post creation of the euro was close to 35 cents. The fall post GFC was close to 35 cents. This move started down from 1.5000, so I figure between 1.2000 and 1.1500 there will be a base found. That may have already happened.

France and Germany will make serious money over the summer months with the euro at these levels. France especially, as they are agricultural exporters and their exporter season starts now. I expect the data from these two countries to improve dramatically over the next 3-4 months.

So I like the euro, and I see it back towards the 1.4000 area by Christmas.

What else...

I don't like the USD. I don't like their debt load. I don't like the way Obama is demonising BP.
I think US politics is going to be paralysed post mid terms. So doing an austerity package a la Europe will be difficult, if not impossible.

I don't like US bonds as a result.

Thats about it. Sorry for the lack of posting, but haven't been really inspired.
Anyone missing the blonde of the month yet?