theanonymousamerican.com

The winds are blowing strong and although we don’t see as many players in the markets today as we did last year at this time we do see some new trends beginning to take shape.  We have been slowly rolling out of our investments from the beginning of this year.  We now have sold 75% of our oil holdings; we have sold out of all of our bank and finance companies with the exception of GE and AXP (American Express).  We continue to see upside potential in both of those holdings even as the trade winds began to shift.

In the near term HR 1207 may have the potential to shake the banking and finance world upside down.  We don’t have any particular inside knowledge of what may come from a FED audit but what we do know is that the market hates uncertainty and this has the potential to bring significant uncertainty.  Where there is uncertainty there is opportunity.

We are beginning to move some of our cash reserves into SKF.  This is a risky and highly volatile ETF that shorts the banking/ finance sector.  We are planning on moving funds in slowly and deliberatly over a few days or even a few weeks.  In the event that the FED audit spooks the banking sector this ETF has the potential to highly outperform, but it does have a downside.  If the banking sector continues on its grind to the upside SKF could see large losses (not more than your investment of course).  Because of this uncertainty we continue to recommend products that will perform well in an inflationary environment like agriculture and commodities.

In the event that banks continue to show strength we believe that will be bullish on our economy and the economy of the world.  In that environment we see agriculture and commodities leading the way and continuing their bullish trends upward.  Thats is why we see agriculture and commodities as a good hegde vs an investment in SKF.

While the future is uncertain we feel that buying SKF and hedging with an investment in agriculture or commodities may perform no matter which way the markets turn in the short term.  This is not a buy and hold strategy; it must be actively managed and will probably only need to be in your portfolio for the next few months or at most the next few quarters.

As always DO YOUR OWN RESEARCH.  We are only telling you what we are doing and make NO guaranties on results.  Good luck and check back often as we will continue to update on what we are doing in our own portfolio.