Current Ideas

Here are three ideas I’m focusing on as the year winds down:

  • Oil Rebound: Scaling into a long bet on the price of oil looks smart. Futures and futures-based investments are barely budging as oil makes new lows (for this cycle) under $35, with $40 still acting as a strong tug upward. Most analysts peg the fair market value of oil at $75 or so, a long profitable trip from the current basement.

  • Treasury Crash: Treasuries have gone parabolic with yields crashing last week on news that the Federal Reserve is entering quantitative easing mode, with an eye on buying Treasuries like there’s no tomorrow. (Some say there isn’t, however, so be aware of that.) Parabolic spikes end in waterfall crashes, so the short side of Treasuries is worth a gimlet eye.

  • Magical Midpoint: Stocks usually begin their next genuine bull rise about halfway through a recession, what I call the magical midpoint. Most economists project that this current recession will last between 18 and 24 months. The National Bureau of Economic Research said it began a year ago. In light of those thoughts, stocks deserve a place on the radar screen.

As the riots begin around the world, be thankful to live in a country built on more than a rising economy. The ideals of democracy go deeper than gross domestic product, and America sits atop a very strong foundation in that regard. Others, such as Russia with its momentary look of legitimacy based on the price of crude oil, have no such strength.

If happiness is relative, Americans should be smiling in the global recession. Been to a mall this month? Adorned with lights and ribbons and filled with Christmas songs, it’s an immediate reminder that even bad times in America are pretty darned good.

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