Monday, May 18, 2009

Rebalancing the Alpha-D for May '09

I added to my long holdings of FXI and GDX as further signs of my conviction that China and gold are the best things to own in Great Depression 2.0. I sold puts under both but sold covered calls only on FXI; it's not as volatile as GDX. I wouldn't mind owning more of either involuntarily but I'm not about to risk my GDX from being called away. I'm holding onto my long position in IAU and writing puts under it.

I refreshed my uncovered calls against IWM after they expired at a profit this past Friday. I'm still quite happy betting against an economic recovery in the U.S.

I also bought a 3-month CD as part of my cash management strategy. I'm not at all fond of fixed income in general right now but I'm willing to seek a little extra yield on my idle cash.