Monday, August 18, 2014

Alpha-D Update for 08/18/14

Here's the latest and greatest Alfidi news.  All of my covered options from last month expired unexercised.  I renewed my covered calls and cash-covered puts around GDX; gold mining remains a useful hedge against US hyperinflation.  I renewed my covered calls on FXF; the Swiss franc remains stable in value and is useful to me as a US hyperinflationary hedge.

I renewed my covered calls on FXA and FXC; I believe the Australian and Canadian currencies provide additional hedges against US dollar hyperinflation.  I have been encouraged by a steady stream of news items from those two countries that indicate a disinclination to pursue extraordinary monetary stimulus.

I am still long a put position against FXE; I remain pessimistic on the euro's long-term survival prospects.

I continue to watch other potential inflation hedges with fascination.  I track timber REITs, public storage REITs, pipeline operators, and stocks in the mining and energy sectors.  They are all at incredibly high valuations.  I also occasionally check valuations of select stocks in my old favorite sectors - defense, logistics, and finance.  I don't see a single stock in any of those sectors that I would buy right now.

The Fed's perverse monetary policy has inflated the value of everything under the sun.  Masking the true cost of capital does a fundamental disservice to investors who seek value.  My own entry point is far below where US stock markets think equities are valued.  I am not throwing away my money.  Sit back and admire my genius, because that's all you can do with what I say.

Nota bene:  I've said it before, and I'll say it again.  None of this discussion constitutes personal financial advice.   I do not ever make securities recommendations to anyone; not on this blog, or in person. or any other way.  I declined to renew my securities licenses in 2006 after I was terminated as a financial adviser for failing to acquire clients.