This time I was better prepared for the first-day-of-the-month blowing-out of the starting gate. The S&P500 rallied 15.3 points – almost as much as the first day of January – but the inflation-hedge commodities really caught fire. So much so that the 6.2% deficit in Account 3 (all commodity ETFs and virtually all long) was wiped out in one day. Now the portfolio is once again .6% ahead on the year and still 2.1% ahead of the S&P500.
The general market bullishness was ostensibly due to the better-than-expected manufacturing report, and the energy and precious metals response to the dollar blanching in the face of President Obama’s $3.8 trillion tax-and-spend budget. It’s all relative of course, but the huge funding requirements are bearish for the U.S. dollar and for bonds, while the increased taxation makes the U.S. a somewhat less desirable place to invest. The U.S. administration is probably counting heavily on the fact that there is no really viable large-scale alternative to the U.S. dollar as a reserve currency, and that these measures will not in fact create a stampede from same. This is probably true in the short run, but the continuation of the dollar rally is certainly called into question. The dollar will probably sit on a balance-point trading range here, to be eventually pushed around by other factors.
The markets also likely responded positively to the fact that some uncertainty has been lifted for now. There is actually some kind of plan. There doesn’t seem to be a great deal of austerity involved given the size of the budget, and there is definitely a conduit of wealth transference from higher income to lower income through the taxation shifting. Whether or not this is positive for job creation remains to be seen, especially if there are “buy-America” strings attached to the incentives side of things, increasing global protectionist tensions.
Today I had a couple of signals from Friday to execute. Unfortunately (for these trades) gold and energy shares gapped higher at the open, and I didn’t get very good fills for HGD (2x short gold shares ETF) and ERX (3x energy shares ETF).
| USD Trades |
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Trading Update # 261 |
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Trade |
Qty |
Stock |
Symbol |
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Price |
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Acct |
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Bought |
251% |
Drxn Energy Bull 3X ETF |
ERX |
@ |
$37.19 |
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2 |
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| CAD Trades |
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Trade |
Qty |
Stock |
Symbol |
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Price |
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Acct |
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Sold |
100% |
HBP GoldSh Bear+ ETF |
HGD |
@ |
$5.23 |
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3 |
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| Qty % are amount by which shares counts are decreased/increased |
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I haven’t decided if I’ll retire HGD outright, but I won’t use it concurrently with HGU (its mirror image). I may put it on again if I feel the gold market is at a rally extreme (and I’m sold out of HGU), but for now, another short ETF shut down.
This past weekend I was at winter camp with the Scouts, at Camp Awacamenj Mino in Quebec about 90 minutes drive north of Ottawa. It was pretty cold (-23C or so) on Friday night, but we all slept in the lodge and didn’t have to deal with it that night. On Saturday it was also pretty cold, but we kept warm snowshoeing, building a snow shelter (often referred to as a quinzee), doing permit work with the mountain stove and axe and saw (Scouts need to earn permits to use the more potentially dangerous camp equipment), and felling a tree into the parking lot. (Don’t ask.) The quinzee was a lot of work, and I had to mine blocks of snow out of the snowbank along side the road, out of which the kids built the walls of the structure. We then used two-by-fours and one-by-fours covered with more snow blocks to build the roof, and then finally covered that with a tarpaulin, and more snow. The kids who slept in it that night were quite toasty, though that was more from the temperature rising overnight rather than any precision-engineered thermal properties of the quinzee itself. Today I hobbled around like a 90-year old. Snow is water, and water is heavy, and I cut and carried a crap-load of it on Saturday.
The camp was all-sections – Beavers (5-7 year olds), Cubs (8-10), and our Scouts (11-14). The Beavers pretty-much terrorized the Scouts in the lodge with systematic attacks on the Scouts’ sleeping area in the basement, so much so that Scouter Steve put it down to a successful “psy-ops” campaign by the Beavers for which the Scouts were wretchedly unprepared. Steve uses words like “psy-ops” because he’s ex-military – engineering corps. The parent that was with us, Randy, was also ex-military – infantry. Them finding this out about each other led to some entertaining and colorful military banter, generally revolving around the relative intellect of “sappers” and “grunts”.
We had a campfire that crisp night in silvery surroundings under the full moon. A Scouts campfire is more ceremonial than just hanging out and cooking marshmallows (although we do that too). There is a formality, and it is MC’d by one of the leaders who picks different groups and sections to do either a song or a skit, which is then usually followed by a cheer, of which there are also many. For example our skit went as follows: One of the Scouts (commandant) marches the troop (legionnaires) into the campfire circle. As they stand and face the commandant, he announces, “Legionnaires, you’ve been marching in the desert for 40 days and 40 nights. I have some good news, and I have some bad news. The good news is, today you get a change of underwear!” Great cheering erupts from the legionnaires. “Now the bad news. You change with him, you change with him, you change with him …” Scouter Steve was responsible for the actual fire as well, and everyone was in awe when it instantly lit into a roaring blaze (just like the gas ones at home) with one toss of a match. Steve had actually juiced it with some highly flammable substance, but we explained it as “correct campfire building technique”.
Most of the kids also slept outside, though I managed not to, by selflessly giving up my winter sleeping bag to one of the Scouts. When I explained this act of altruism to the other leaders, I detected a hint of skepticism. But when, with great humility, I explained ”What can I say, that’s just the kind of guy I am”, they seemed to understand - ”Of course you are.” And with that I sauntered off to my nice, warm, comfortable bunk for a snooze. Although ultimately there was a down-side to sleeping indoors. At about 7AM one of the leaders started cooking breakfast, and forgot to turn on the stove hood fan. Never in my life have I heard such a loud fire alarm, let alone woken up to one. I dragged myself out of the bunk, had the presence of mind to put on pants, and went to check on the 3 Scouts downstairs. Well, they had long bolted and were standing outside. I commended them on their quick and correct response, but did point out that next time they might consider grabbing their boots when evacuating into sub-zero temperatures.
On Sunday we played some broomball, demolished the quinzee (which I had to then mostly rebuild because this upset one of the kids), did a Scouts own (where we talk about the pros and cons of the camp), packed up, and finally made our way home, but not before Steve drove into a snowbank as we were leaving the parking lot. I sent him an email today commending him on his exemplary enthusiasm for camp by somehow managing to even squeeze in a little snow-plowing on the way out.
And finally, the best line at camp? … a six-year old Beaver to Scouter Steve: “Why are you teaching us poker?”
Now I have to go plan our skiing and tubing activity.
Cheers,
Allocator
a.k.a. George Parkanyi
