We had been away for 2 months or so. Now there's a great deal of catching up to do. With hindsight, the deleveraging over last 2 months had been far more severe than we had anticipated, though not surprising. And we shouldn't have taken profit off the Japanese Yen so early [3], which had been one of the best performing currencies while we were away. Well, nevermind. Our positions remain unchanged -- though some have turned out to be slightly heavier to carry.
Global stock markets have now declined by 50% or so while the US markets 40%. David Tice [2, 3] has been proven right. We believe a temporary bottom in equities has been established. A significant rally is likely to continue, but we don't think this will mark the end of the current bear market. We believe the Dow will end year 2009 below 8,000. We will actively take a short position when the upcoming countertrend rally is exhausted, if we are smart enough to time it.
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