Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Saturday, May 8, 2010

Repricing of Global Assets

Some hedge funds find it worthwhile stepping back and looking at where money is flowing around the globe. I believe this is a useful exercise for all investors. In doing this today, you can appreciate the massive repricng that markets have undertaken and may be in the midst of. For example, the U.S. $ has shot up versus the Euro, as fears of contagion from Greece's debt problems have spread and riots have indicated that a neat solution might be difficult to pull off. This, of course, makes Europe's goods a lot cheaper on world markets. It is also getting stock managers to move out of multinational companies. At the same time, the Yen has risen against the U.S. $.

Commodities have cheapened significantly, led by oil which is $75.11/barrel versus $86.15/barrel last week. Japan is benefited greatly by a drop in oil, and Russia, for one, suffers. For those with a long-term view and looking to pick up something like FSLR (First Solar) on the cheap, this is worth following.

Gold shot through $1200/ounce. If you need an indicator of whether the fear is real in the market, this is it. It now takes 16.12 barrels of oil to buy an ounce of gold - last week it took 13.81 barrels.

Yields in the U.S. dropped sharply as "flight-to-quality" money obviously sought a refuge. It is worth noting that some pros are probably getting picked off because the layup trade of 2010 was supposed to be a rise in rates. It is not unusual for a big player in the market to be caught swimming naked (as Buffett would put it) because of these types of moves.

Reflecting a changing view of the world, inflation expectations dropped sharply to 2.17% from 2.40% ( difference between 10 year Treasury yield and 10 year Treasury TIP).

No comments:

Post a Comment