Hedging today

[Tulpen]

I am interested how the members are positioned for today which could become a quite memorable day.

Myself: 60% long in gold and 40% short in oil.

Edited to add:
Sold all my 60% gold in the 10:15 morning spike and shorted more oil up to 100%.

[Jim Nickerson]

I am interested how the members are positioned for today which could become a quite memorable day.

Myself: 60% long in gold and 40% short in oil.

Edited to add:
Sold all my 60% gold in the 10:15 morning spike and shorted more oil up to 100%.

Holding PM's and not exposed to oil.

[Andreuccio]

Holding PM's and not exposed to oil.

403b (80% of total, limited to mutual funds only):
56% Short term liquid (MM, TIPS, Treasuries)
25% Mining Stocks (Down from 35% yesterday)
9% oil (down from 25% late last year)
3% Bonds
Remainder: Smatterings of funds that are Infrastructure or Alt Energy related

Roth IRA (20% of total):
55% Gold
45% Yen
It was 50/50, but Gold has outperformed yen

[Tulpen]

Certainly memorable and quite unexpected, at least by me.

Note that gold is lagging.

Still 100% short oil for me.

[Starving Steve]

I am interested how the members are positioned for today which could become a quite memorable day.

Myself: 60% long in gold and 40% short in oil.

Edited to add:
Sold all my 60% gold in the 10:15 morning spike and shorted more oil up to 100%.

Dear Tulpen:

Unless I am missing something, oil is going to be in severe shortage for decades to come. Only a worldwide depression would change my view, and I do not think depression is likely in the world. The only country that is headed for depression ( a well-deserved one after the lunacy of supply-side economics ) is the USA.

Unless there is something that I am missing about windmills and solar energy, the future belongs to those nations that have either oil or atomic energy.

The bottom-line is that I would not be short oil. Sharp drops in oil futures are likely to be met by even sharper rises. Any move in oil to the $70s would be a super-buy, and any move over $100 would not necessarily be a good sell.

Fast-forward this oil shortage a few years, and we might be looking at $200 oil, especially with the Sierra Club and Greenpeace setting the energy policy in much of the world.

Think about cars and freeways all over India, Russia, and China, and you have the demand on oil for a $200 per barrel price spike.

[FRED]

Dear Tulpen:

Unless I am missing something, oil is going to be in severe shortage for decades to come. Only a worldwide depression would change my view, and I do not think depression is likely in the world. The only country that is headed for depression ( a well-deserved one after the lunacy of supply-side economics ) is the USA.

Unless there is something that I am missing about windmills and solar energy, the future belongs to those nations that have either oil or atomic energy.

The bottom-line is that I would not be short oil. Sharp drops in oil futures are likely to be met by even sharper rises. Any move in oil to the $70s would be a super-buy, and any move over $100 would not necessarily be a good sell.

Fast-forward this oil shortage a few years, and we might be looking at $200 oil, especially with the Sierra Club and Greenpeace setting the energy policy in much of the world.

Think about cars and freeways all over India, Russia, and China, and you have the demand on oil for a $200 per barrel price spike.

Think: Peak Cheap Oil. (http://www.itulip.com/energyandmoney.htm)

[Tulpen]

Dear Tulpen:

Unless I am missing something, oil is going to be in severe shortage for decades to come. Only a worldwide depression would change my view, and I do not think depression is likely in the world. The only country that is headed for depression ( a well-deserved one after the lunacy of supply-side economics ) is the USA.

Unless there is something that I am missing about windmills and solar energy, the future belongs to those nations that have either oil or atomic energy.

The bottom-line is that I would not be short oil. Sharp drops in oil futures are likely to be met by even sharper rises. Any move in oil to the $70s would be a super-buy, and any move over $100 would not necessarily be a good sell.

Fast-forward this oil shortage a few years, and we might be looking at $200 oil, especially with the Sierra Club and Greenpeace setting the energy policy in much of the world.

Think about cars and freeways all over India, Russia, and China, and you have the demand on oil for a $200 per barrel price spike.
I understand what you are saying but not everything goes up or down in a straight line, prices fluctuate. Since the end of last year the price of oil has come down. And I have profited from that. I moved into gold to anticipate the monster cut by the Fed. After the cut I went again into shorting oil.

There are three factors in my opinion that prices will drop even further.
1. The economic recession.
Less demand in the US, Europe and the emerging markets,

2. Inventory buildups.
Inventory levels are high and will depress the prices.

3. Seasonal effects.
Oil is relatively cheaper in the late winter.

Will it go up 6 months from now, a year from now? Who knows and who cares, up to now shorting oil is a very profitable strategy.

Another reasoning to avoid gold is that at this stage is that I am not very confident that gold will do well during market meltdowns. Each time the SP500 dropped to very low levels gold moved in tandem.

[Andreuccio]

Another reasoning to avoid gold is that at this stage is that I am not very confident that gold will do well during market meltdowns. Each time the SP500 dropped to very low levels gold moved in tandem.

There was a post by Eric a while back looking at the idea of trying to trade the drop, (if there is one), in gold and then the subsequent resurgence. A couple of issues he brought up to argue against it were the difficulty of getting the timing right and the costs of trading (a couple of percent either way on the trade, plus high taxes on profits).