Posts
With silver at 14.44, it is right at overhead resistance.
What happens next is a coin toss. If I was day trading silver futures I would take some profits now but retain some exposure in case it breaks through resistance. If it does break through and move higher look for more, strong resistance at around 16 dollars.
If it can't break through resistance here, it will likely fall to support levels around 12 and a half.
That is simply another buying opportunity.
In all likely hood silver can't move past 16 without some type of correction in between.
Gold is in similar circumstances with strong resistance all the way from here, 997 through to around 1020. I expect a corrective pullback from here and that will be likely to put more downward pressure on silver, further reducing the odds that it can move past 16.
I don't try and trade the silver market. I am in acquisition mode when it comes to metals. I use pullbacks as buying opportunities. Silver is too volatile to day trade without hedging. I use other markets to day trade, markets that offer more investment vehicles to reduce risk.
Despite what some experts are spouting in unified voice, "Buy and Hold" isn't dead as they would have you believe. "Buy and Hold" is alive and well, as long as you are buying the right thing.
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Sunday, February 22, 2009
Sunday, February 15, 2009
Silver is performing. What's next?
So far, so good for silver, so what do we do now?
Besides wait and watch there are some things we should be looking at.
Let's start by examining where we are.
First nothing has changed to derail my overall "big picture" view of hard assets. If anything the new "stimulus" package strengthens my prediction for a weaker dollar moving forward. I still like TBT which is an ultra short position against Treasuries and the Dollar. This is a long term play, whereas I see people fleeing the dollar when the effects of the stimulus take hold and we flood the world with our currency.
So logically, since we are positioned to benefit when that happens, we are going to be selling into that price strength. But here is the rub, once we sell our position in TBT, we are going to be sitting in a cash position. The key word being cash.
You may be asking, "Well didn't you just say that you don't like cash?
I'm glad you asked.
We want that time frame, when our cash exposure is the greatest, to be very short. Having an escape plan is vital. But it's not enough to just have a selling strategy, because in this case, the asset class we are betting against, is the medium of exchange we must use to settle the trade. So where do we go to grow and protect our wealth.
More gold and silver?
Maybe, but maybe not.
The problem is that, if the dollar slides, as I believe it will, gold and silver will be much more expensive too. And they can't go higher forever. They will have to top out at some point and go the other way. So increasing our exposure to the metals, will start to appear very risky. It all depends on how deeply the damage to the dollar goes. Remember many things can happen that we don't expect. So view this as a broad and flexible plan.
The problem is determining value.
What is an apple really worth?
If it costs a dollar today for one apple, then what's it worth when, because of inflation, it costs 10 dollars?
That's the beauty of silver and gold.
Today one ounce of silver will buy you a crate of apples. When inflation hits in ernest, maybe it will buy a truckload of apples, maybe not. Who knows, there might be a shortage of apples that year or maybe a glut. The point is, that we need to identify, at that time, what value is.
For some time, I have been feeling that real estate will be that truck load of apples. If real estate continues to fall as I believe it will, it will be falling in conjunction with a falling dollar and creating a massive, once in a lifetime, buying opportunity for real estate. A perfect storm of low price relative to the dollar, a weaker dollar, and overvalued precious metals. It is at that point that you will probably be getting as sick of me writing about real estate, as you probably are, sick of me writing about silver now.
If real estate turns around before the run on precious metals, so be it. There will be a buying opportunity in some other, under valued, tangible asset at that point.
I believe that commodities like food and clothing as well as energy and materials will retain or grow their value in the future and will appear to be very expensive, but in actuality, will be fairly valued.
Real Estate will appear to be fairly valued but will actually be dirt cheap and no one is going to want to touch it. That's when we will start accumulating, with the profits from our positions against the dollar.
So from here, this is where I am concentrating my efforts; I will be increasing my knowledge about real estate and I will begin to value properties and real estate investment vehicles in terms of silver, instead of dollars. For instance if a property is valued at 300 thousand dollars, I will refer to it as being worth about 22 thousand ounces of silver. Or if you prefer, that same 300 thousand dollar house is worth 320 ounces of gold.
By doing this I will get a better idea of the true value of the investment and where it sits relative to a true measure of wealth.
I don't believe that the dollar can be counted on to be a good yard stick anymore.
One more thing, with houses being foreclosed on in record numbers, the need for rentals is going to increase, be it houses, condos or apartments, I'll be educating myself on these markets as well. Particularly apartments. All those displaced homeowners are going to need a place to live and most likely a cheap place. This may be a good interim investment before housing and commercial comes back.
Remember I am looking at long term strategies here, so I am not purchasing anything yet. Just as I am not selling anything yet. I am still accumulating real tangibles and moving decidedly out of the dollar.
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Besides wait and watch there are some things we should be looking at.
Let's start by examining where we are.
First nothing has changed to derail my overall "big picture" view of hard assets. If anything the new "stimulus" package strengthens my prediction for a weaker dollar moving forward. I still like TBT which is an ultra short position against Treasuries and the Dollar. This is a long term play, whereas I see people fleeing the dollar when the effects of the stimulus take hold and we flood the world with our currency.
So logically, since we are positioned to benefit when that happens, we are going to be selling into that price strength. But here is the rub, once we sell our position in TBT, we are going to be sitting in a cash position. The key word being cash.
You may be asking, "Well didn't you just say that you don't like cash?
I'm glad you asked.
We want that time frame, when our cash exposure is the greatest, to be very short. Having an escape plan is vital. But it's not enough to just have a selling strategy, because in this case, the asset class we are betting against, is the medium of exchange we must use to settle the trade. So where do we go to grow and protect our wealth.
More gold and silver?
Maybe, but maybe not.
The problem is that, if the dollar slides, as I believe it will, gold and silver will be much more expensive too. And they can't go higher forever. They will have to top out at some point and go the other way. So increasing our exposure to the metals, will start to appear very risky. It all depends on how deeply the damage to the dollar goes. Remember many things can happen that we don't expect. So view this as a broad and flexible plan.
The problem is determining value.
What is an apple really worth?
If it costs a dollar today for one apple, then what's it worth when, because of inflation, it costs 10 dollars?
That's the beauty of silver and gold.
Today one ounce of silver will buy you a crate of apples. When inflation hits in ernest, maybe it will buy a truckload of apples, maybe not. Who knows, there might be a shortage of apples that year or maybe a glut. The point is, that we need to identify, at that time, what value is.
For some time, I have been feeling that real estate will be that truck load of apples. If real estate continues to fall as I believe it will, it will be falling in conjunction with a falling dollar and creating a massive, once in a lifetime, buying opportunity for real estate. A perfect storm of low price relative to the dollar, a weaker dollar, and overvalued precious metals. It is at that point that you will probably be getting as sick of me writing about real estate, as you probably are, sick of me writing about silver now.
If real estate turns around before the run on precious metals, so be it. There will be a buying opportunity in some other, under valued, tangible asset at that point.
I believe that commodities like food and clothing as well as energy and materials will retain or grow their value in the future and will appear to be very expensive, but in actuality, will be fairly valued.
Real Estate will appear to be fairly valued but will actually be dirt cheap and no one is going to want to touch it. That's when we will start accumulating, with the profits from our positions against the dollar.
So from here, this is where I am concentrating my efforts; I will be increasing my knowledge about real estate and I will begin to value properties and real estate investment vehicles in terms of silver, instead of dollars. For instance if a property is valued at 300 thousand dollars, I will refer to it as being worth about 22 thousand ounces of silver. Or if you prefer, that same 300 thousand dollar house is worth 320 ounces of gold.
By doing this I will get a better idea of the true value of the investment and where it sits relative to a true measure of wealth.
I don't believe that the dollar can be counted on to be a good yard stick anymore.
One more thing, with houses being foreclosed on in record numbers, the need for rentals is going to increase, be it houses, condos or apartments, I'll be educating myself on these markets as well. Particularly apartments. All those displaced homeowners are going to need a place to live and most likely a cheap place. This may be a good interim investment before housing and commercial comes back.
Remember I am looking at long term strategies here, so I am not purchasing anything yet. Just as I am not selling anything yet. I am still accumulating real tangibles and moving decidedly out of the dollar.
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Saturday, February 7, 2009
Silver is making a move!
It's starting to look good for silver.
For those of you in SLV or the bullion market, I see some good times ahead. I see clear sailing up to around 14.50 an oz. But expect some resistance there and maybe a temporary pull back. Breaking above 14.50 will signal a major run up so don't miss it.
Here's how and why I'm playing it;
SLW, Sliver Wheaton. Currently $6.72 a share. Their 52 week range is $2.51-$19.54.
I'm not thrilled with their PE ratio at 17.47 but I can tolerate that.
And here's why, SLW is a pure silver play, and while they refer to themselves as a mining company, that's not really what they do. They acquire silver cheaply and sell it at the market price.
SLW has several long term contracts by which they are committed to purchase a mining company's silver output for a fixed cost. Which according to their website, http://www.silverwheaton.com/main/?en&home is $3.90 per ounce with their averaged realized price over $13 an ounce. That's a nice little profit.
What is their risk? That the price of silver will tumble to below 4 bucks an ounce.
We already know that's probably not going to happen.
The interesting thing about silver is that it is not the target of most mining companies. It's a byproduct. Those miners are looking for gold, copper and zinc. Silver just happens to be deposited in the same locations and it is pulled out and sold. Often financing the operation so that their target ores are obtained for free. That's why mining companies are willing to lock themselves into contracts for such a ridiculously low price. They are guaranteeing their continued operation no matter what prices do. They simply don't care about the silver.
But Silver Wheaton does.
So where does all this lead us?
I'm building up a position in SLW, but (now pay attention here), because SLW is announcing 4th quarter results on Feb 19th, I'm hedging.
So what does that mean?
I am buying the shares outright but I'm also buying puts, as insurance for the earnings release. Which could be bad due to the recent price collapse.
I am not concerned about the long term prospects of the company because their business model is so good and I know that silver is here to stay, at least for the foreseeable future. But you never know how the traders will react to news of any type.
Of course the news could be good, in which case I will probably lose a couple bucks on the puts, but, again, it's insurance, not a trade.
I'm buying short expiration, in-the-money puts.
Now if I didn't know what that meant, I wouldn't try it. I would simply wait until they report and then either, buy at a discount if they fall in price or take my lumps and pay up for the shares.
The mining sector has sure taken a beating lately, some of them have been hit 70, 80 even 90%,
but as a trader I view this as a golden opportunity and as you know, I like gold too!
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
For those of you in SLV or the bullion market, I see some good times ahead. I see clear sailing up to around 14.50 an oz. But expect some resistance there and maybe a temporary pull back. Breaking above 14.50 will signal a major run up so don't miss it.
Here's how and why I'm playing it;
SLW, Sliver Wheaton. Currently $6.72 a share. Their 52 week range is $2.51-$19.54.
I'm not thrilled with their PE ratio at 17.47 but I can tolerate that.
And here's why, SLW is a pure silver play, and while they refer to themselves as a mining company, that's not really what they do. They acquire silver cheaply and sell it at the market price.
SLW has several long term contracts by which they are committed to purchase a mining company's silver output for a fixed cost. Which according to their website, http://www.silverwheaton.com/main/?en&home is $3.90 per ounce with their averaged realized price over $13 an ounce. That's a nice little profit.
What is their risk? That the price of silver will tumble to below 4 bucks an ounce.
We already know that's probably not going to happen.
The interesting thing about silver is that it is not the target of most mining companies. It's a byproduct. Those miners are looking for gold, copper and zinc. Silver just happens to be deposited in the same locations and it is pulled out and sold. Often financing the operation so that their target ores are obtained for free. That's why mining companies are willing to lock themselves into contracts for such a ridiculously low price. They are guaranteeing their continued operation no matter what prices do. They simply don't care about the silver.
But Silver Wheaton does.
So where does all this lead us?
I'm building up a position in SLW, but (now pay attention here), because SLW is announcing 4th quarter results on Feb 19th, I'm hedging.
So what does that mean?
I am buying the shares outright but I'm also buying puts, as insurance for the earnings release. Which could be bad due to the recent price collapse.
I am not concerned about the long term prospects of the company because their business model is so good and I know that silver is here to stay, at least for the foreseeable future. But you never know how the traders will react to news of any type.
Of course the news could be good, in which case I will probably lose a couple bucks on the puts, but, again, it's insurance, not a trade.
I'm buying short expiration, in-the-money puts.
Now if I didn't know what that meant, I wouldn't try it. I would simply wait until they report and then either, buy at a discount if they fall in price or take my lumps and pay up for the shares.
The mining sector has sure taken a beating lately, some of them have been hit 70, 80 even 90%,
but as a trader I view this as a golden opportunity and as you know, I like gold too!
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Thursday, January 29, 2009
Will President Obamas plan work?
Will President Obamas plan work?
It depends on how you measure success.
If you want to re inflate the bubbles, then yes it might possibly. The amount of money we are looking at is truly mind wrenching. This has never been done before. At least on this scale. But what are the longer term ramifications?
Ken Gerbino writes an excellent article, that lays out the details but his overall conclusions are very plausible. While the collective wisdom is that, this is the collapse that all the gold bugs have been waiting for, Ken believes that there is one more recovery before that happens.
I have been pondering this for some time.
This is how I see it panning out;
As this year unravels there will be ups and downs in the market at various levels of volatility. essentially a sideways market. Strangely, times of violent sideways action.
As the "stimulus" money works it's way into the market and these new funds are monetised and ultimately "realised" by the economy. There will be some measure of recovery. This is when I believe inflation will begin. The stock markets will recover much of their losses, but commodities will begin to soar as the supply pendulum swings from over supply to under supply as a direct result of this current climate of demand destruction (people and companies belt tightening). As money floods the system and economic activity returns, companies will rush to ramp up production and the supply will be strained. We still have China and India to deal with. They have had a taste of a higher quality of life and it would be naive to think they are going to give this up.
Here is where my cracked crystal ball, begins to distort the image of the future and it all hinges on time. How long and how far will the recovery go?
Who knows. But I do believe that commodities will soar and the dollar will suffer hugely.
What is the ultimate end game?
Whatever it is, it'll be one for the history books.
And most likely it will be something no one expects, including myself.
But if you stock up on tangible assets now while they are incredibly cheap, you will be in a position to take the best advantage of the situation when the direction becomes clear.
Take a look at MOO, it's a play on Agri-business. And again this is a long term buy and hold.
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
It depends on how you measure success.
If you want to re inflate the bubbles, then yes it might possibly. The amount of money we are looking at is truly mind wrenching. This has never been done before. At least on this scale. But what are the longer term ramifications?
Ken Gerbino writes an excellent article, that lays out the details but his overall conclusions are very plausible. While the collective wisdom is that, this is the collapse that all the gold bugs have been waiting for, Ken believes that there is one more recovery before that happens.
I have been pondering this for some time.
This is how I see it panning out;
As this year unravels there will be ups and downs in the market at various levels of volatility. essentially a sideways market. Strangely, times of violent sideways action.
As the "stimulus" money works it's way into the market and these new funds are monetised and ultimately "realised" by the economy. There will be some measure of recovery. This is when I believe inflation will begin. The stock markets will recover much of their losses, but commodities will begin to soar as the supply pendulum swings from over supply to under supply as a direct result of this current climate of demand destruction (people and companies belt tightening). As money floods the system and economic activity returns, companies will rush to ramp up production and the supply will be strained. We still have China and India to deal with. They have had a taste of a higher quality of life and it would be naive to think they are going to give this up.
Here is where my cracked crystal ball, begins to distort the image of the future and it all hinges on time. How long and how far will the recovery go?
Who knows. But I do believe that commodities will soar and the dollar will suffer hugely.
What is the ultimate end game?
Whatever it is, it'll be one for the history books.
And most likely it will be something no one expects, including myself.
But if you stock up on tangible assets now while they are incredibly cheap, you will be in a position to take the best advantage of the situation when the direction becomes clear.
Take a look at MOO, it's a play on Agri-business. And again this is a long term buy and hold.
Good luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Thursday, January 22, 2009
Is buy and hold, a bad strategy?
With the recent collapse of so many icons of American capitalism, is a strategy of "Buy and Hold" such a good idea?
I think that taken by itself it is more important now than ever.
If taken in the context of buying and holding Blue Chip stocks, I am not so sure anymore.
My approach to navigating this market, while I've been unconsciously doing it for some time, is to buy and hold real tangible assets as my core portfolio. I didn't realize that I was doing this until I went to analyze my over all position and portfolio allocation, which I do periodically to check my"investor psychology".
This is really a 180 degree shift.
The collective wisdom of the past was to buy and hold blue chips and speculate with risk capital(money you can afford to lose), in other markets such as commodities, energy, tech and Bio-Tech.
As it stands now I find that I sleep better at night knowing that my real wealth is protected by hard assets. When you look at some of the monsters in the financial industry teetering on the brink, I wonder if they are in any stronger position than Bernie Madoff was prior to his collapse.
Take for instance B of A, a year ago they were trading at 40 bucks now they are worth 5 and standing under the bailout TARP
Yeah I know that Bank of America deposits are insured by the Government, but who insures the Government?
We do, the people, with our tax dollars. And despite what some politicians believe, that is a finite and unpredictable number. It is a dangerous merry go round that the Government is on. As the economy worsens, they continue to bail out failing companies. Companies that still cut jobs and production with the end result being a smaller tax base.
Fewer workers, fewer payroll taxes.
Less production, less profit for the corporations and therefore less corporate taxes.
Less sales, less sales tax collected.
President Obama has stated that he is not concerned with deficit spending, but I am and we should all be. With foreign nations less willing to buy our debt, the only other way to fund his stimulus plan and various other programs is through the printing press.
Sure he could raise taxes but I doubt that he will do this. Despite the rhetoric the Democrats know that tax hikes in this financial environment would be a disaster.
So that leaves increasing monetary supply as the only avenue.
This is the big picture; Monetary supply has doubled from this time last year, which means that you have half the spending power that you had a year ago.
Don't let the fact that we have had a dramatic drop in the price of fuel as well as other commodities, lead you astray. These things take time to work through the system.
In fact this lag is itself the very opportunity that we should be looking at.
I am looking at this sale in precious metals the way I would have looked at a major pull back in Boeing two years ago.
Or Johnson and Johnson, Dow Chemical, Lockheed Martin even Exxon. Had someone told me last year that I would be able to buy these names at the current prices, I would have thought them insane.
But now, looking at precious metals, I see that they must rise in price and I don't have to know when, I just have to know when they are on sale and then buy and hold.
A very good analyst that I trust, points to a possible, further pull back in metals before they take off to new heights. It's possible. I don't think it will happen, but because I trust his conclusions, I am putting some extra cash aside in case it does. And no, I'm not selling my real metals. Those I will hold for the foreseeable future. Don't try and time this market it is still way too volatile. Buy the dips and hold. Build your positions.
Another position that I will be hanging onto is the short position on treasuries(TBT)(see Obama Bounce? Dated 1/08/09) Again I don't know when these things will happen but in the big picture they must happen.
Good Luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
I think that taken by itself it is more important now than ever.
If taken in the context of buying and holding Blue Chip stocks, I am not so sure anymore.
My approach to navigating this market, while I've been unconsciously doing it for some time, is to buy and hold real tangible assets as my core portfolio. I didn't realize that I was doing this until I went to analyze my over all position and portfolio allocation, which I do periodically to check my"investor psychology".
This is really a 180 degree shift.
The collective wisdom of the past was to buy and hold blue chips and speculate with risk capital(money you can afford to lose), in other markets such as commodities, energy, tech and Bio-Tech.
As it stands now I find that I sleep better at night knowing that my real wealth is protected by hard assets. When you look at some of the monsters in the financial industry teetering on the brink, I wonder if they are in any stronger position than Bernie Madoff was prior to his collapse.
Take for instance B of A, a year ago they were trading at 40 bucks now they are worth 5 and standing under the bailout TARP
Yeah I know that Bank of America deposits are insured by the Government, but who insures the Government?
We do, the people, with our tax dollars. And despite what some politicians believe, that is a finite and unpredictable number. It is a dangerous merry go round that the Government is on. As the economy worsens, they continue to bail out failing companies. Companies that still cut jobs and production with the end result being a smaller tax base.
Fewer workers, fewer payroll taxes.
Less production, less profit for the corporations and therefore less corporate taxes.
Less sales, less sales tax collected.
President Obama has stated that he is not concerned with deficit spending, but I am and we should all be. With foreign nations less willing to buy our debt, the only other way to fund his stimulus plan and various other programs is through the printing press.
Sure he could raise taxes but I doubt that he will do this. Despite the rhetoric the Democrats know that tax hikes in this financial environment would be a disaster.
So that leaves increasing monetary supply as the only avenue.
This is the big picture; Monetary supply has doubled from this time last year, which means that you have half the spending power that you had a year ago.
Don't let the fact that we have had a dramatic drop in the price of fuel as well as other commodities, lead you astray. These things take time to work through the system.
In fact this lag is itself the very opportunity that we should be looking at.
I am looking at this sale in precious metals the way I would have looked at a major pull back in Boeing two years ago.
Or Johnson and Johnson, Dow Chemical, Lockheed Martin even Exxon. Had someone told me last year that I would be able to buy these names at the current prices, I would have thought them insane.
But now, looking at precious metals, I see that they must rise in price and I don't have to know when, I just have to know when they are on sale and then buy and hold.
A very good analyst that I trust, points to a possible, further pull back in metals before they take off to new heights. It's possible. I don't think it will happen, but because I trust his conclusions, I am putting some extra cash aside in case it does. And no, I'm not selling my real metals. Those I will hold for the foreseeable future. Don't try and time this market it is still way too volatile. Buy the dips and hold. Build your positions.
Another position that I will be hanging onto is the short position on treasuries(TBT)(see Obama Bounce? Dated 1/08/09) Again I don't know when these things will happen but in the big picture they must happen.
Good Luck and Godspeed
JT
Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor, which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.
Sunday, January 18, 2009
TEOTWAWKI?
It is very difficult, while searching all the resources on the net, to avoid all of the analysts that believe that this is "The End Of The World As We Know It". But in some ways, I think that they are right.
"The times, They are a changin'"
As those of you who read my stuff regularly know, I think that the dollar is in serious trouble. At the very least I believe that in addition to some really awful times ahead for Real Estate, Auto Makers and Financials, I see some scary hyper inflation in the future.
But do we need to employ the bomb shelter mentality?
In my life time I have experienced several times when this was the "fringe" tendency. While growing up it was The Cold War, with the policy of "Mutually Assured Destruction".
When that threat ended, it was time to create another, Y2K. Remember when the computers were going to ruin the world because they couldn't count from 1999 to 2000?
Then came the very real and frightening 9/11. And now we have the, also very real, collapse of the financial system.
But the question remains, Is this financial Armageddon?
I don't believe that it is, yet.
and I don't really believe that it will be.
It all depends on what Washington does in the next few months.
But, have I stocked my shelves with a few extra cans of Beenie Weenie?
Maybe.
Being prepared is not the same as being paranoid. Having been part of a disaster response team I have been at ground zero for some serious events. Hurricane Ofa, Typhoon Russ, and the Loma Prieta earth quake in San Francisco in '89. I've had to eat MREs, out of necessity before. Here at home, I have also seen a time when our rivers flooded and took out bridges, leaving us isolated for days. So I do believe in being self sufficient and managing risk. That is a crucial element of investing, as well as surviving in any situation.
So let them call you paranoid, stock up on the Beenie Weenie and SpaghettiOs (and maybe some silver and gold) so that if something does happen, be it a man made or natural disaster, you can say "I told you so", as you toss your neighbor a spare can.
Good Luck and Godspeed
JT
"The times, They are a changin'"
As those of you who read my stuff regularly know, I think that the dollar is in serious trouble. At the very least I believe that in addition to some really awful times ahead for Real Estate, Auto Makers and Financials, I see some scary hyper inflation in the future.
But do we need to employ the bomb shelter mentality?
In my life time I have experienced several times when this was the "fringe" tendency. While growing up it was The Cold War, with the policy of "Mutually Assured Destruction".
When that threat ended, it was time to create another, Y2K. Remember when the computers were going to ruin the world because they couldn't count from 1999 to 2000?
Then came the very real and frightening 9/11. And now we have the, also very real, collapse of the financial system.
But the question remains, Is this financial Armageddon?
I don't believe that it is, yet.
and I don't really believe that it will be.
It all depends on what Washington does in the next few months.
But, have I stocked my shelves with a few extra cans of Beenie Weenie?
Maybe.
Being prepared is not the same as being paranoid. Having been part of a disaster response team I have been at ground zero for some serious events. Hurricane Ofa, Typhoon Russ, and the Loma Prieta earth quake in San Francisco in '89. I've had to eat MREs, out of necessity before. Here at home, I have also seen a time when our rivers flooded and took out bridges, leaving us isolated for days. So I do believe in being self sufficient and managing risk. That is a crucial element of investing, as well as surviving in any situation.
So let them call you paranoid, stock up on the Beenie Weenie and SpaghettiOs (and maybe some silver and gold) so that if something does happen, be it a man made or natural disaster, you can say "I told you so", as you toss your neighbor a spare can.
Good Luck and Godspeed
JT
Saturday, January 10, 2009
Re: Obama Bounce
I received a comment on my latest blog(see Obama Bounce below). When this person read that I was interested in Proshares Ultrashort Lehman 20+ year treasuries. Symbol TBT. They asked me "Didn't you know that Lehman Brothers went bankrupt?".
My apologies to any of you that had the same concern. I should have explained. Yes I did know that Lehman Brothers no longer exist. Their Index, however, lives on. The company that manages the fund in question is Proshares, part of the ProFunds Group. The reference to Lehman is simply an index, collection or list of stocks in a sector or in this case, treasuries. Just like the Dow Jones industrial average or Standard and Poors.
Kudos go out to the reader that pointed out this concern, because in times like these we need to beware and ask questions, keep it up!
Ah yes, another question was raised about my sign off slogan "Godspeed"
Here's the Wiktionary definition that most describes my intent in using the term;
An expression of good will when addressing someone, typically someone about to go on a journey or a daring endeavor.
Or from Wikipedia; Godspeed, as a word, is a wish for a prosperous journey, success, and good fortune.
The key here is that educating yourself is a journey and becoming financially liberated is one of the best gifts that you can give yourself and your family. Please keep the comments coming, because they help all of us on that path to freedom.
Email me at Torocreekinvest@aol.com
Good Luck and Godspeed
JT
My apologies to any of you that had the same concern. I should have explained. Yes I did know that Lehman Brothers no longer exist. Their Index, however, lives on. The company that manages the fund in question is Proshares, part of the ProFunds Group. The reference to Lehman is simply an index, collection or list of stocks in a sector or in this case, treasuries. Just like the Dow Jones industrial average or Standard and Poors.
Kudos go out to the reader that pointed out this concern, because in times like these we need to beware and ask questions, keep it up!
Ah yes, another question was raised about my sign off slogan "Godspeed"
Here's the Wiktionary definition that most describes my intent in using the term;
An expression of good will when addressing someone, typically someone about to go on a journey or a daring endeavor.
Or from Wikipedia; Godspeed, as a word, is a wish for a prosperous journey, success, and good fortune.
The key here is that educating yourself is a journey and becoming financially liberated is one of the best gifts that you can give yourself and your family. Please keep the comments coming, because they help all of us on that path to freedom.
Email me at Torocreekinvest@aol.com
Good Luck and Godspeed
JT
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