Marc Faber, Dollar Will Eventually Go to Value of Zero, Oct 26, 2009

[nelsanity]

Quote from Swan Noir:

Makes sense. The ETF's seem to frequently under perform the market and it has been written that because it is easy for experienced traders to know when they will roll their positions they get killed on the roll over. Any feeling if this is reality? Any estimate on what I give up rolling them?

Thanks. You have already been helpful.

Ok well when you roll vs going out one more contract farther, you pay a 'round-trip'. So 2*commission is the difference.

I never follow gold, so I'll use an example I am more familiar with: TYZ9. Say you short this b/c it's front vs TYH9. You'd pay 2 more commission's to short and buy back vs just short the H1. So say thats 2*($2 [have to insert your broker+clearing fee here, but I use 2]

In TY 1/32nd of pt is worth $31.25 per contract so to find equivalent price movement that equals roll fee is almost 1/8th of a 32nd...very tiny.

Check order book of contracts farther out and you will see there might be some in next contract out because we are so close to rolling Dec, but after that it drops off a cliff. I.e. you will pay more than 1/8th of 32nd because of lack of open interest. Hope this all makes sense.

 

[Ghost of Cutten]

This whole thread is now moot:

http://seekingalpha.com/article/170...or-rebound-emerging-markets-worth-considering

Faber now says the dollar is "at a low point" and due for a rebound.

 

[Ivanovich]

Quote from Ghost of Cutten:

This whole thread is now moot:

http://seekingalpha.com/article/170...or-rebound-emerging-markets-worth-considering

Faber now says the dollar is "at a low point" and due for a rebound.

The guy is becoming a lunatic. Let me understand this...

The dollar will go to exactly zero, but not yet. Waaaaiiit for it....a rebound is coming. The US market is a disaster, and world equities are poised for a crash - but wait, look! Emerging markets offer a good investment!

...?

 

[Misthos]

Quote from Ivanovich:

The guy is becoming a lunatic. Let me understand this...

The dollar will go to exactly zero, but not yet. Waaaaiiit for it....a rebound is coming. The US market is a disaster, and world equities are poised for a crash - but wait, look! Emerging markets offer a good investment!

...?

That's why his website is titled "GloomBoomDoom"

There's a "boom" in that title, in case you missed it.

 

[Ghost of Cutten]

Quote from Misthos:

That's why his website is titled "GloomBoomDoom"

Is that because he forecasts all 3 and then takes credit for whichever of the three scenarios actually plays out?

"The US dollar is going to crash" (doom)

"The US dollar is going to rally" (boom)

"The US dollar is ultimately going lower but might go higher first" (gloom)

Hard to lose with that kinda forecast - does anyone know an actual trading position you can take that makes money in all 3 scenarios? Apart from setting up a newsletter advisory service of course.

 

[Misthos]

Quote from Ghost of Cutten:

Is that because he forecasts all 3 and then takes credit for whichever of the three scenarios actually plays out?

"The US dollar is going to crash" (doom)

"The US dollar is going to rally" (boom)

"The US dollar is ultimately going lower but might go higher first" (gloom)

Hard to lose with that kinda forecast - does anyone know an actual trading position you can take that makes money in all 3 scenarios? Apart from setting up a newsletter advisory service of course.

LOL...

Hey man, you have to have all your bases covered.

But seriously, I've been following Faber for a few years now. Has he always been dead on? No. But you know what? He gives pretty solid reasoning behind his predictions, so if the facts change, it's not that difficult to assume what that would do to the prediction.

And yes, all three scenarios (gloom-boom-doom)are part of our landscape. Wisdom is in anticpitating the order and frequency of those scenarios thru time. Micro and Macro. They all occur at different times, in different places, and using a global outlook, all at once.

 

[Swan Noir]

Yes, it makes sense. If it ends up to be just commissions it is not prohibitive. Yet I have often heard the ETF's (sophisticated traders I would hope) and up getting much lower returns because of costs "associated with rolling their contracts".

Doesn't compute for me.

Quote from nelsanity:

Hope this all makes sense.

[/B]

 

[nelsanity]

Quote from Swan Noir:

Yes, it makes sense. If it ends up to be just commissions it is not prohibitive. Yet I have often heard the ETF's (sophisticated traders I would hope) and up getting much lower returns because of costs "associated with rolling their contracts".

Doesn't compute for me.

Well I am not too familiar with ETF's, so I am wondering what requires an ETF to be rolled? i.e. Do they have maturities?

 

[Fractal]

Quote from Rearden Metal:


P.S. Buy this dip in gold and thank me in a week (Current spot price: $1039). This is an official RM prediction.

Credit where it's due. Although I'm holding longer than a week, I know there are others out there who have cashed in. Once again, another shout out to RM is in order.

 

[Rearden Metal]

Quote from Fractal:

Credit where it's due. Although I'm holding longer than a week, I know there are others out there who have cashed in. Once again, another shout out to RM is in order.

Good work, and you get credit for noticing that I'm usually right about these things and mustering up the balls to act on that conviction. Most people can't do that.

Unrelated to the gold trade, I just realized that for once I could actually directly benefit if people were to piggyback me on something.
Yesterday I cut a large check to privately invest in a local business. I come across these types of deals all the time, and pass on over 95 percent of them- but this particular one feels very different. Encouraging other investors to come in with me can only strengthen their chances of success.

In case anyone here happens to take me seriously and has a minimum of $50K to invest in this sort of thing, feel free to PM me. This would be especially relevant if you're located around Chicago or south Florida, as you'd be able to keep a close eye on your investment.