Slope of Hope Blog Posts
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Well, after all this waiting, the big day – – November 3 – – is finally upon us.
I have mixed feelings about it. On the one hand, I'm terribly apprehensive about the bears getting a nuclear bomb dropped on their heads when QE2 is announced and the election results have sunk in. One can imagine a scenario where:
+ The announcement comes out;
+ The market instantly rips ten points lower (or whatever), getting everyone excited;
+ It promptly shakes off the loss and explodes to the upside, as the dollar utterly collapses.
I mean, who knows? Anything could happen.
The other feeling I have is relief that it's finally going to be out of the way……..for a while, at least. I don't think they'll start talking about QE3 on Thursday (although at this point, there's no telling). One thing I can promise you, though, is that I'm as sick of hearing about QE2 as I am sick of getting robocalls from politicians.
The safest thing to do would be to be completely in cash. Of course, that's always the safest thing to do. It also guarantees you will forgo any opportunity to make a profit.
I am taking a less conservative approach, but somewhat conservative nonetheless. My positioning is:
+ 85% committed (that is, 15% in cash and no margin being used);
+ 25% long positions;
+ 75% short positions
This way, tomorrow could wind up somewhat bad for me – – or somewhat good – – but it's pretty unlikely that it will be a disaster, no matter what Big Ben does to us.
I've actually got some personal history with this organization.
Early in 2005, after I sold Prophet, I put my money in various investments, one of which was a gas partnership run by PETD. It produced a great tax write-off, and at first, the monthly checks were pretty impressive.
Since then, natural gas revenues have – shall we say – diminished markedly in price, although a chunk of the well revenue still comes from crude oil (whose price is still lofty). It's the first time I've ever been involved in an energy operation.
In any case, I follow this company with interest, and my long position in them has been doing nicely today. I've taken profits on over half my position and am letting the balance continue to ride.