A Little Long – EPP

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How’d that quote go? – “Don’t fight the Fed…”  As of Friday, I am still net short, but have more longs (as a %) than I have had since 2007.


To be clear, I fundamentally believe most Western economies are circling the bowl; and the Fed is dumping water in, praying it can keep the turd from going down…  it’s just a matter of time.

Since mid-late October sometime, I’ve been taking small bites of EPP (iShares MSCI Pacific ex-Japan) on any drop.  From the iShares site: http://us.ishares.com/product_info/fund/overview/EPP.htm


Pros: Given the 20% inflation Ben & Co. just dumped into the bowl, I like the geographic breakdown:

Australia              65.46%

Hong Kong           19.29%

Singapore            12.67%

New Zealand         0.79%

Macau                  0.64%

China                   0.27% (<– and specifically that this is not a large % of the mix)

Additionally, as the world hunger for materials grows, 10% of EPP is BHP Billiton.


Cons: I’ve been cautious with the accumulation, as over 46% of this ETF is in Financials.  Sure, as a %, most of the Financials are ANZ banks, but I have such a limited trust of this sector – I can easily imagine some panic-inducing event turning this into a loser faster than the HFT machines can dump it.


TA: The price data is strong above the cloud:


EPP appears to be at a confluence of support.  I'm holding at this point, and will add another chunk if it can manage to hold the blue line.  If it breaks the overhead green, I’m adding more for what I believe should be another nice leg up: