Monday, July 23, 2012

Alpha-D Updates For 07/23/12

Well, something happened that I didn't expect when I prepared for my monthly rebalancing of my portfolio.  My recently purchased long positions in FXA and FXC rose through the strike prices of the covered calls I wrote over them and were exercised away.  I bought them back in a wash sale and wrote the covered calls again.  I guess the relatively low inflation in Australia and Canada is making those currencies look more attractive than others.  I'm still not ready to go long FXF, so I renewed the cash-covered put position under it that expired.

My covered calls on GDX and FXI expired unexercised and I renewed each position.  I'm still a recovering addict from the China bull story but I just can't surrender my long FXI position; it's there for diversification.  Gold still belongs in my portfolio as a hard asset hedge against hyperinflation and a stock ETF is the vehicle I choose instead of bullion.  I have written a cash-covered short put position under GDX for the first time in recent memory, because I wouldn't mining owning more of the large-cap gold mining sector if the rest of the equity universe goes down the tubes.

I have no fixed income holdings and that's the way the Alpha-D is going to stay until the U.S. gets past whatever hyperinflationary episode is coming.  My cash pile is looking prettier every month as the premiums from the options I write build it up.  It awaits whatever trigger I deem necessary - the end of the euro, a run on the dollar, or some other financial cataclysm - for deployment.  The market crash I expect will be the buying opportunity of my lifetime and I will ready to add energy, defense, and transportation stocks to my Alpha-D at bargain prices.