Wednesday, December 26, 2012

Updating The Alpha-D for 12/26/12

The stock market was on a reduced hours schedule on Monday and I didn't make any portfolio adjustments until today.  I figured even my brokerage's computers need a break for a few microseconds.  Here's what I did with my money today.

My short covered calls on GDX expired unexercised, so I renewed them.  I'm willing to risk seeing that long position sell off if it breaches the strike price.  Gold of any kind will prove to be a poor hedge by itself against the inflation we'll see at some point in the U.S.  A position in gold stocks is probably okay as a cash-generating hard asset position, but I am considering other hard assets to add to my holdings.

I also sold short some cash-covered puts under GDX.  Given that security's recent decline in price, I wouldn't mind picking up some more near its 52-week low.

I made no changes at all to my positions in FXA, FXC, and FXF.  I will continue to hold the currencies of countries with well-managed fiscal policies and non-inflationary central bank monetary policies.  I am particularly encouraged by recent public statements of the central banks of Australia and Canada.  Those countries will probably stay on their low-inflation courses while the euro and U.S. dollar fall apart.

I am not at all interested in dollar-denominated fixed income holdings.  Inflation will destroy cash, CDs, and bonds but that's what the Bernanke Fed is trying very hard to do.  I will commit cash to equities in energy, resources, and related hard asset sectors when I see some bargain prices.  That's all for this month.