Monday, March 19, 2012

Alpha-D Updates for 03/19/12

Hey folks, here comes my portfolio update following an options expiration weekend.  My covered calls all expired unexercised, so I renewed the call positions I typically have over GDX and FXI.  The value of GDX has fallen so far from its high that I'm willing to risk adding a little more involuntarily, so I wrote some puts under GDX with an expiration date next month.  I have the cash to buy shares if the strike price is triggered.  Picking up a little extra gold in the ground may prove useful as the U.S. edges closer to a hyperinflationary environment.

Speaking of hyperinflation, I remain on the lookout for equity positions in hard assets or sectors that serve hard asset production and distribution.  This can cover a broad gamut of things including energy production, energy distribution, railroads, pipeline operators, oil and gas MLPs, mining, and certain types of real estate.  This approach only seems broad when you consider that it excludes wide swaths of the larger economy that will probably not perform as well during hyperinflation.  I plan to stay as far away from consumer retailers, residential real estate, and consumer technology as I can for the next few years.

I still have my small holdings of California municipal bonds and I count off the days until they mature.  The return of my principal will give me the opportunity to see if an allocation to the TIP ETF will maintain a fixed income position that can adjust to hyperinflation.

The rest of my liquid portfolio is in cash.  I await the European trigger for a broad market correction.  I do not believe I am waiting in vain.

Full disclosure: All positions are noted.