Strategic Investment

Will the stock market keep falling?

Before we answer that, let’s get through the housecleaning…

Back on January 20th, we recommended you buy a March Call Option on the VIX (VIX110316C00017000) to hedge yourself on any potential drops in the stock market (and capitalize to boot).

Unfortunately, that drop took longer to play out than we anticipated. Even with the recent volatility, this option hasn’t gained any value. Expiration is just around the corner, so sell the VIX 17 March Call Option (VIX110316C00017000) to protect from any further losses.

That aside, the Strategic Investment portfolio is performing well in 2010. The open portfolio is up 38.32% right now. And our closed positions for 2010 have already returned 37.82%. That’s obliterating the less than 5% return on the S&P 500 this year!

Which leads us back to the question… Continue Reading »

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The February 2011 issues is now available here: http://strategicinvestment.com/files/2011/03/si_february11.pdf

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The January 2011 issue is now available here: http://strategicinvestment.com/files/2011/03/si_january11.pdf

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The December 2010 Issue is now available here: http://strategicinvestment.com/files/2011/03/si_december10.pdf

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The October 2010 Issue is now available here: http://strategicinvestment.com/files/2011/03/si_october10.pdf

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Notwithstanding hopeful hype about “recovery” mainly driven by unsustainable monetary and fiscal stimulus, the U.S. economy is headed for a wrenching adjustment that will push living standards down. I expect to see half a century’s worth of economic progress wiped away.

To a degree that few appreciate, the rapid development of the BRIC economies, especially India and China, implies a write-off of trillions in middle class wealth that prices in assumptions of economic dormancy in the rest of the world.

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Tags: Brazil, BRICs, expatriation, Little Ice Age, welfare

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Dear Strategic Investor,

There is good and bad in this market.

The good is that prices are lower so there are a lot of deals. The bad is that prices are lower, so you’re bound to catch a few losses.

But I don’t mind losses, as long as they don’t take over the portfolio.

That’s a big reason why we try and keep a 20% – 25% stop-loss on most of our positions – because we don’t want losses to overrun our portfolio.

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Tags: credit expansion, emerging economy, losses, lower prices, portfolio, sell

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Dear Strategic Investment Reader,

My first car was a Chrysler.

My dad, a mechanic for over 40 years, hated my choice.

He told me “You’re just going to throw good money after bad on that piece of junk! Sell it now, while you have a chance”. Three months later, the transmission was completely shot. My dad looked at it and told me that the engine would be next.

He was right. This $800 car suddenly morphed into a $3,800 proposition.

Why do I bring up this story? Because it speaks volumes for what’s happening all over the world right now.

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Tags: Bad debts, Bailout, Chrysler, Default, Euro, europe, Greece, Italy, Portugal, Spain

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There are compelling similarities, as well as differences, in the decline of British economy as compared to the current decline of the United States. Both economies were running trade deficits prior to the inflexion crisis, although the British paid for their consumption from the profits of the Empire.

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Obama has it.

“Deficit Attention Disorder,” that is.

So does the majority of our birdbrained Congress.

They proved themselves remorselessly determined to squander another $938 billion out of an empty pocket to enact bad health care ideas from a smoker.
What are they thinking?

Obviously, they don’t read Strategic Investment.
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