tactical trader

For those of you that read my ramblings I apologise for the lack of a ‘week ahead’ blog yesterday, I was tied up on post accident insurance battles; I will not bore you with the details.

So, what has come up on the radar this week? First of all a sigh of relief from troubled investors indicating that we may well have reached the much awaited bottom. This from the Daily Reckoning:

If you want to pick the top of a market, just watch the evening news," says Keith Cotterill, the options pro' behind the Resource Trade Alert programme. "When commodity prices make it to prime time British TV it’s over. This is what we saw earlier last month with both copper and gold. You may have noticed that the evening news is now talking about the drop in stock prices. Look for a bottom over the next few days..."

Whilst I am not entirely convinced about the next few days being the timing I certainly agree with what is being said. Looking back you will see that I maintained this was a correction that would retrace and fall again, this is exactly what happened. For my part I am not yet ready to buy though I do not think the moment is too far away.

On the longer term front this has been a very interesting exercise in portfolio management. We are told that diversification is the ultimate hedging tool, I have even written about it myself but I no longer believe it. I spent considerable time and effort researching the best asset allocation models available and it did not help one bit. There was naturally cash protection but where everything else is concerned the charts were almost identical so what’s the point of several holdings? Admittedly there were differences between, say the FTSE and the Tiger Economies, but within the groupings there was no difference at all. Even two holdings that are normally uncoupled fell foul of the same percentage decline so they will now have to be examined.

This has to call into question the validity of the AA model and it is something I will be turning my attention to over the summer. I am now leaning to an absolute return basis but we shall see.

China is in the news again with a very disturbing piece about the impact they are having on the environment. You can see the full article here Link

The plan for large numbers of Nuclear Power stations can only be good for my Uranium play, the more the better so thanks also to Tony and Gordon! Finally, I have recently been made aware of yet another scam hiding behind the façade of FSA respectability. How these people sleep at night is beyond me and over the next few weeks I intend to investigate further. I just cannot see how these cowboys can give what is clearly advice then hide behind the education label. I will report my progress here and hope that we can get some momentum behind a campaign to eradicate these people once and for all. More later this week.