Dear rss free blog,
You want a forecast, here is
a forecast. Jeffrey A. Hirsch, the 2nd generation guru of Almanac Investment, says to always sell on Rosh Hashanah and
buy on Yom Kippur. This year that won’t work as Rosh Hashanah falls on a
Saturday when markets are closed. You could try selling the day before, Sept.
18. Yom Kippur is a working day, Sept. 28. There will be no newsletter that day. Nor on Monday the 7th, which is Labor Day and the last day before my younger granddaughter Sophie starts school.
Leave it to me to write a
piece bullish on the dollar on the very day when it proceeds to fall against
the euro and the. And to be bearish on gold on a day when it hits a 5-mo high.
What happened? My assumption
that pending sales by the IMF would limit the price rises of the yellow metal
was wrong. I figured that the selling to raise money to help poor countries
would cap the gold price. But instead, it brought out new gold buyers.
Unofficially, we learn gold
is being bought by the big 4 BRIC countries to diversify their reserves away
from the greenback: China
and Russia for political
reasons; and India and Brazil just to
diversify. Then too there is plenty of spare cash around the Middle East which I hear is also going into precious metals rather than
dollars.
That happened yesterday. It
may not happen again today. Or tomorrow.
All of which goes to show that punditry
about big picture macro-economic trends is tough to pull off. So today I will
focus on stock-picking. Yes, we have a new idea for our paid subscribers,
discussed below. There will be bit less pipe-sucking, the term used by the
British satirical magazine Private Eye to
describe pontification about future trends.
Before moving on, apologies to Gen. Joe
Shaefer, USAF-Ret., for my quoting him yesterday without mentioning his ID.
When not poking fun at environmental overkill, Joe runs www.Stanfordwealth.com,
a fund manager, and produces a newsletter with which I share occasional
articles, ideas, and readers. Even without an apology we remain buddies and Joe
would never bomb NYC.
*We begin with KA’s note: I’ve been hearing all the chatter about how low the natural gas prices
are right now and I was wondering if you know of a good way to get into
this.I looked into a couple of ETFs but am unsure. There seems to
be a lot of risk with US
Natural Gas (UNG). First Trust ISE-Revere Natural Gas (FNG) does not seem to
track the gas price that well considering how much it has dropped. I was
wondering if you have any advice on this.
Happily I have been thinking about gas
prices, stimulated among other things by Joe Shaefer’s enthusiasm for our
home-grown energy source, and by the problems of exchange-traded funds and
notes. Deutsche Bank, which created a bunch of
leveraged commodity-linked ETNs and ETFs for energy sources yesterday announced
that it will close the $425 mn PowerShares DB Crude Oil Double Long next week.
That is because its fund hit limits on future trading on the NY Mercantile
Exchange. Deutsche’s burgeoning contracts wound up hitting the position limits.
It had earlier been allowed to exceed the ceilings in trading agricultural
commodities.
Natural gas is next. It is
even harder to store than oil and therefore subject to being roiled by ETN and
other speculative flows. But as Joe
explains: “the glut in supply of natural gas is both temporary and
price-sensitive.” Because it costs more to extract gas from shale than today’s
prices, wells are being shut in. Joe asks: “What company could stay in business
if they were to sell gas at $2.56 per mn BTUs when it costs them $5.15 per MMBtu to get it out
of the ground?”
However, winter is coming and
“over the coming months, utilities will need to produce more natural gas-generated heat. As the days grow longer, we’ll turn
our lights on earlier in the day and, if this year is like every other, we’ll
settle in, turn up the electric blankets, play more electronic games, and cook more
at home – primarily benefiting nat-gas.” We will also use more hot water.
Here is how to play this…
