I'll try my hand at some live blogging here as I sit in on a seminar with Yu-Dee Chang
sponsored by Essex Futures
in Orange County, CA. I'll be typing and updating as the session proceeds.
Mr. Chang is expected to run the gamut in a fundamental review of markets. Economy, Dollar, Treasuries, Interest Rates, Stocks, Metals, Commodities.
A little humor with a lesson in Chinese.
Orientation is for the investor but with an actively managed sector rotation approach.
Uses primarily fundamentals. Money flow, psychology, technicals over shorter term.
Where can we find an attractive yield?
Should we diversify?
During time of certainty, no need.
During time of uncertainty, yes.
Now is time of uncertainty=diversify.
Economically recovery is acceptable. Politically unacceptable because of unemployment.
Unemployment is biggest problem. We need to create 15 million jobs.
Double dip is not in the picture. No deflation. People talk about inflation but no one is really worried about it.
Europe stablized. China, India growing.
Banks holding money at Fed, not putting it into the economy.
Trades the dollar. When you think a currency is dead that's when it comes back.
Some bonds are necessary. Hedging model with a short ETF.
Fed funds rate low. QE2 right now it's Bernanke vs. World.
Rates are going higher but not much higher. Fed funds rate will stay low.
Rates low so forced to the risk trade.
Study Japan experience to understand US. Japan scared, cautious, savings rate high.
2008 crash oversold. What's next? World is not collapsing, there is recovery. Double dip? Pumping money into system. The easy money is over in all markets.
If you think growth is coming invest in stocks if not get out.
Do you believe in long term investing?
Everything comes down to strength of the economy.
Should be thinking about sector rotation over time, not so much long term investing. Likes China, basic materials rare earth minerals, technology, biotech.
No mention of green/clean tech.
If economy does recover then corporations will need to upgrade technology so tech is important.
30% US, Emerging Markets stocks
30% Dividend Stocks
30% Income (bonds, AAA or Treasuries
10% stock speculating short term, short term swing trading.
is it a buy? Bottomed? Audience thinks it's going down.
Some regions still going down, some have stabilized.
Gold, silver, platinum.
Should go up if economy recovers. Things go up because someone wants to buy it. Supply is limited of gold.
Gold is going higher for a trade. Not for long term investment. $1800 inflation adjusted high from 1980.
Volatile upward bias. Buy dips.
SPX PREMIUM COLLECTION STRATEGY
Can we create a strategy that fits all market environments? Sell option premium. Time decay. Exploit volatility.
VIX historically has high range and low range.
Low volatility environment 10-12% net return.
High vol environment: 40-60% per year.
2 components: time and magnitude.
Sometimes directional, sometimes non-directional strategy.
I'll comment later. Gotta go teach a yoga class now.