Tuesday, September 2, 2008

Back To Work And Market

Labor day weekend was great! Now back to business. I wish I understand today's action. But I don't. All explanations are different and that means that actually nobody understands anything.

Dollar strength is amazing. Especially against Euro and Pound. Looks like a lot of money is looking for home in US now. Some of it came from Russia, but most probably is coming from Europe. We'll see. I'm too cautious to take DRR position or increase my UUP position now. Maybe I'm way too cautious.

Still don't see investments here, with exception of investing in dollar strength.

Political developments are interesting. Russia and it's rulers are crazy. They are trying to make enemies of the West and don't see China quietly pulling away former USSR countries in Asia. The whole story with recognition of breakaway provinces of Georgia stinks, of course. But it's also extremely dangerous for Russia itself, because there are at least 3 Russian provinces in Caucasus which would want to become independent. And if defense of own citizens (which just received Russian passports this year) can be made a casus belli, what would Russia say about several million real, natural born Chinese, currently living in the Russian Far East and Siberia? Of course, this blog is about investing, and all this situation is telling: get out of Russia. Short Russian market (through RSX) if you are brave enough (I'm not yet). Sell everything which depends on Russia. Which makes oil and oil companies not good for investing right now as well. Russia is likely to increase defense budget sharply and will have to sell more oil as a result. Just one of the factors, but a pretty big one.

Full disclosure: at the time of publication author had a long position in UUP and no positions in other stocks mentioned. Positions can change any time.

Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

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