short leveraged ETF's

Have you read how leveraged ETF's eat away at your earnings? Well they do! Check out SSO which is supposed to double the performance of the S&P, but actually it doesn't double on the upside and more than doubles on the downside.

Thus, a good investment strategy is to short SSO. That way you make money if the market declines and you also make money on the inherent losses that come from leveraged ETF's. As a long term short, you will negatively out perform the market.

Eurpean rally almost over

The short term bounce I predicted on July 2 will probably end next week. now is a great time to add to your shorts or sell gains.

The rally was largely a product of optimism from expectations regarding the stress test that should be released this weekend. Since every other government attempt to soothe markets has been met with disappointment regarding a lack of details, I expect this report to get the same response.

Expect Europe to resume its fall starting next week and that will drag down the US as well.

Chinese inflation of 15-30% within 6 months

Over the last month, I read several reports about how some chinese factories are raising prices or wages on US manufacturers by 15-30%. Then I was at the Adult Product Manufacturer convention (ANME) a few days ago and I heard from several manufacturers how over the past few weeks they have learned of 15-30% price increases coming in the next couple months from Chinese manufacturers.

Thus, I am betting that the market will recognize significant inflation in China. Inflation is bad for the US and Chinese consumer. If China lets its currency appreciate, that will hurt the US consumer, but will help the Chinese consumer. Boosting Chinese consumer demand is the stated policy of China and the US and will help trade imbalances in the long run.

When the inflation news comes to the market, US consumer stocks will decline. (short XLY)
It will also hurt chinese stocks thus I suggest continuing to avoid them for now, but eventually the Chinese will figure out the correct move is to increase the value of its currency. Shortly before a significant revaluation will be the best time to buy a chinese consumer stock play like HAO.

start a long term plan to accumulate GOOG on dips for the next decade

google software will take over the world. Google docs and spreadsheets to manage projects, gmail on phone and computer, analytics on all pages, and ad words for growing sales. And all of it is done sooo well with no competitor in site and for free. Wow . . . gonna start accumulating GOOG!

Not only are they doing those things, but I am using them and they are changing my life in dramatic and amazing ways.

Chinese currency is up, but CYB is not

I have been holding money in CYB as steady play that waits for the Chinese to appreciate their currency. But as if often the case with ETF's, the instrument does not do as advertised. Recently the Chinese have let their currency drift up, but the CYB (WisdomTree Dreyfus Chinese Yuan Fund) is heading down.
I am still bullish on the Yuan, but no longer bullish on CYB.

short term bounce

European countries as well as many banks will soon default. Although this will cause short term problems, in the long run, its good for the Euro and good for Europe. After it happens, put your money in Europe.

The Euro’s recent strength tells me that we may have a pause in the decline in the Euro. Or maybe people realize that the coming default is actually good for the currency. Nevertheless, we should expect a short term rally that is an opportunity to get more defensive.
My favorite is to short the US retail consumer by shorting XLY.
Also, gold continues to show itself as a safe haven in every down turn. Its 10 year steady climb should continue if not also accelerate.

US treasuries continue to be considered a safe haven, but that can not go on forever. Get ready to buy TBT or short TLT when that bubble bursts!

I hope Peter Schiff wins in CT for Senate