Global Macro Trading Journal

Japan has a massive 7.0+ aftershock and the Nikkei goes up almost 2%?

The Nikkei could be played directly but the better option is to buy a good basket and let this baby ride.

Alternative play could be long USD/Yen (frankly there are likely even better Yen crosses to be long but you get the gist). Just be in anything but JGBs or Yen.

I'm not a FX guy so I defer on that topic to those of you with more guile in that arena, but I will say while I rarely spout predictions I predict in 1-1.5 years this Japan play is going to be much, much higher than today.
 
Quote from Daal:

I'm thinking more from the perspective of myself and other traders that want to park some cash they are not using to actively trade. You have the choice of putting in some hedge fund charging 2/20 or in a diversified mix of assets, it seems that its quite likely the latter is better
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IMO the best option is just a defensive diversified portfolio of low-cost ETFs (e.g. Vanguard). This is one area where back-testing works nicely, you can get data going back a long time. You want the portfolio that had an acceptably low set of drawdowns across all bear markets: 1929-32, 1937, 1973-74, 1981, 1987, 1990, 2000-2003, 2007-09.

Personally I use 25% long-dated government bonds (deflation/recession hedge), 25% precious metals (inflation hedge), 50% stocks (to generate returns in normal conditions) as a broad template. I then alter the weighting if I feel any sector is crazy expensive or crazy cheap, or if I have a strong conviction view. For example right now I have zero government bonds, back in 07-08 I had cash & short-term Treasuries instead of stocks. A more defensive option is stay 25% in cash and only have 25% stock exposure (this would then become Harry Brown's 'Permanent Portfolio').

Normally I have too many direct stock investments to have any spare cash to invest, but when I don't, then I use that portfolio mix. It generates a lot more than cash or short-dated Treasuries, and rarely loses more than about 10% peak to trough even in severe bear markets.
 
This Euro strength is truly harmfull for my goldexposure.

I thought a strengthening USD would offset some of the losses should gold correct but I never really considered the Euro to rise stronger then gold itself...
 
Quote from Ghost of Cutten:

IMO the best option is just a defensive diversified portfolio of low-cost ETFs (e.g. Vanguard). This is one area where back-testing works nicely, you can get data going back a long time. You want the portfolio that had an acceptably low set of drawdowns across all bear markets: 1929-32, 1937, 1973-74, 1981, 1987, 1990, 2000-2003, 2007-09.

Personally I use 25% long-dated government bonds (deflation/recession hedge), 25% precious metals (inflation hedge), 50% stocks (to generate returns in normal conditions) as a broad template. I then alter the weighting if I feel any sector is crazy expensive or crazy cheap, or if I have a strong conviction view. For example right now I have zero government bonds, back in 07-08 I had cash & short-term Treasuries instead of stocks. A more defensive option is stay 25% in cash and only have 25% stock exposure (this would then become Harry Brown's 'Permanent Portfolio').

Normally I have too many direct stock investments to have any spare cash to invest, but when I don't, then I use that portfolio mix. It generates a lot more than cash or short-dated Treasuries, and rarely loses more than about 10% peak to trough even in severe bear markets.
More...

I'm not sure about having 25% of assets in precious metals, IIRC their expected long-term real return is 0%. For the next 10 years, yes, but that is more like a macro bet. For the long-run I'd rather own assets that have some kind of premia
 
Geez, some morning. Another new record for gold, silver over $40, oil pushing $112, peso at new lows. The destruction of the nation by Bernanke and Geithner continues.
 
Quote from Debaser82:

This Euro strength is truly harmfull for my goldexposure.

I thought a strengthening USD would offset some of the losses should gold correct but I never really considered the Euro to rise stronger then gold itself...
More...

Look at the brazilian real, I losing money on my non BZF, precious metals exposure. Even though I'm hedged with a basket of currencies(many of them commodity currencies) yet the real continues to climb against them. My luck is that I have some of my costs in USD(I import a lot) plus I plan to do international traveling so some of my future expenditures will be in USDs, EURs, etc but still, this currency is fucking amazing

I'm growing convinced its some kind of bubble, on a PPP basis it seems to be overvalued by 30-40% against the USD(By the big mac index, I'd agree its not the most scientific way of measuring it). Plenty of other commodity currencies aren't overvalued at all against the USD

There is the high real interest rates but they have been coming down over the years as people grown more confident there won't be hyperinflation. At some point this mini bubble needs to pop
 
Looks like Brazil and Guido "currency war" Mantega may have thrown in the towel on fighting real appreciation. Inflation is getting out of control across the planet, it's time for the rest of Latin America to follow Mexico's lead and embrace a stronger currency.

Fisher on the tape ... Fed near tipping point on policy, wants to end QE part deux early. The 2 year yield is back near its highs from the Kocherlakota/Plosser scare of last week. Markets looking for the Bernank to hold off this year and then give in in 2012. I'm sure BO will be pleased to see that.

http://www.marketwatch.com/story/fed-nears-a-tipping-point-on-rate-policy-fisher-2011-04-08
 
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