Martin Kronicle

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We are in unprecedented times, so I thought we needed to check in with Victor Sperandeo today for some perspective.

Other blog posts mentioned in the podcast:

The Bailout Aftermath for the Euro, Gold, and S&P 500.

Was Gold Too High in Q4 2009? (GLD)

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Mebane Faber has co-authored one of the best books on investing that the lay person can read and actually understand called The Ivy Portfolio: How To Invest Like the Top Endowments and Avoid Bear Markets.

The book was written with the help of Eric Richardson, President of Cambria Capital.

To pronounce his name correctly, say “Kevin.” Now change the “v” with a “b” and change the “K” with an “M” and that’s how you pronounce his name. Or you can just call him “Meb” rhymes with “web.” And “Faber” is fay-ber, not FAH-ber like the doom, gloomboomdoom dude, Marc Faber.

Meb also keeps a very insightful blog called World Beta: Engineering Targeted Returns and Risk which I recommend.

Links are for informational purposes only. Not affiliate links.

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Was gold too high to buy in Q4 2009? That’s when George Soros became massively bullish on gold, and more than doubled his original position in GLD. The fourth quarter is highlighted in the red rectangle in the chart. Compare the prices within the boundaries of the red versus where it was before, and where it’s gone since.

Since the beginning of Q4 last year, the yellow metal has appreciated 20 %. Since his position was approximately 9 % of his portfolio, we can deduce that the metal’s performance could have added almost 2 % of net gains to Soros Fund Management.

Psychology, self-awareness, and emotional intelligence are the keys to whether you’re made for trading. How many readers said “I’m going to wait for a pullback?” “It’s too high now.” “All the bad news is priced into the market already”…famous last words.

It did pull back…did you buy some? Why not? What were you feeling at the time ? (not thinking, but what were you feeling?)

Who could have figured on the Euro bailout package? Greek tragedy? (besides George)

What do you make of the fates of Italy, Portugal, and Spain? How about the UK?

Then the United States – are we immune from the bumper-crop in US dollars that we’ve printed?

With all this in mind, do you think gold is too high?

When the long-term charts are in sync with the shorter-term time periods, you have the making of a great trade set-up. Such is the case with the GBP, which you can trade via futures, interbank, or FXB.

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The GBP is rallying after the election in the UK, but that doesn’t tell the whole story. Check out the weekly chart below.

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And the GBP Monthly Continuous chart:

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Whatever is happening in the UK, their economy is not going to change overnight b/c of an election, despite how smoothly it might have gone or how “selfless” Gordon Brown acted. Same goes for the US, of course.

The GBP has a long way to go before the downtrend will change. Like in my Gold, Euro, S&P 500 Bailout Aftermath post, you’d look to fade the UK election on the reversal down. You can use your intraday charts to pinpoint the reversal.

You can see how to identify a trend reversal in my earlier post How To Marry Fundamental & Technical Analysis in Cocoa.

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Here is the first Charles Goyette podcast.

Here’s a video interview with Dollar Meltdown author Charles Goyette.

Defining the downtrend in the S&P 500.