Global Macro Trading Journal

Daal said:
The idea here is, if anyone bought Swiss or German bunds 4 years ago and went into a coma, a coma that he came out of today, he almost surely would be taking most (if not all) the profits from the trade and anyone would agree with doing that. What I'm suggesting here, a small short in the futures, equivalent to 1/3 or maybe 1/2 of the duration exposure of the portfolio (and how to extract the duration exposure size from a stock portfolio is a more difficult question but I believe it can be done). This is the equivalent to taking some profits off the table from the long duration/bond trend that has played out massively over the last few years and benefited everyone, stock, bond and real estate investors. I could argue that not doing that is what is risky
Why would this not be a good idea? Sure, there might be an extra cost to the short futures as compared to the outright bond sale but it should be small relative to the potential loss that will be averted if the person DOESN'T take some off the table
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I wouldn't disagree with you... I just think you need to consider carefully what happens under a Japan scenario. See what happened to such a "portfolio" through the last 20 - 30 years of the Japanese experience. If you're happy with this as a "tail"(ish) risk, then you got yourself a trade.
 
Brazilian stocks are up a ton this year (new multi-year high today highest since april 2012) but I still think they are very cheap. Where in the world can you own stocks with a 10 CAPE ratio with a government implementing all the important reforms and with a even better government likely to take over in 2018 (implementing other important reforms or making the sure the old ones that failed, pass)?
This was a classic Jim Rogers type investment, where he would load up a depressed market when he saw that the government was about to make the necessary market friendly reforms (IIRC he made 5x his investment in Austria in the 80's doing just that).
I believe the Bovespa could be at 90K+ somewhere in 2018, during an election hype rally
 
The higher the valuation (the lower the expected real return going forward), the higher the chance of a significant drawdown in the stock market

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http://mebfaber.com/2012/11/30/hercules-hercules/

Kinda obvious but its nice to see that data to back it all up
 
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With central banks forcing certain country's stock markets to trade at a premium, you have to diversify globally to find value
 
Greece CAPE ratio is around 2-4. I avoided Greece for years because of EUR denomination risk (in case they get out of the EUR), but its getting so ridiculously low it might be worth a initial investment (with the plan to add a lot more if they get out). If you think about it, if they walk out, the new currency probably will drop 50-60% but then their stock market should rally 5-10 fold over the coming years, so you will make it all back anyway
The Greek index is down from 1000 in 2008 to a low of 15 this year (a drop of over 98%)
I'm considering a small stake in GREK. Anywhere from a 1% to 3% position
The fact that no one can see a catalyst for them, is probably even more of a reason to buy
 
Even with a small position, the potential is huge. When these depressions end the rallies are just humungous, it takes everyone by surprise
 
justrading said:
Is it not possible that Greece will just be in the doldrums for years?
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It could be.
But employment started to go up, real GDP is flat and there is a primary surplus. It looks like the worst is over. So it SHOULD limit the downside, if GREK makes a new low, I can get probably get out. If there is a comeback, this make will triple easily. So its a big reward to risk ratio
 
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