Portfolio update

Before I start my comment on the day, I wanted to say that I should have probably waited Monday to close the positions I closed Friday. The Bear Stearns crisis drove the Yen, Swiss Franc, Euro, Gold and shorts financials to new highs. But who could have predicted this! Jim Cramer actually recommended Bear Stearns last Monday – What a joke, this show.

As for today, another spike (DJI +420.21) that MacroMan was prudent to not qualify, hesitating between calling it the latest sucker’s rally or as the short-term bottom. As far as I’m concerned, it did not convince me, and it offered me the opportunity to buy some SKF (-15.42% today) and FXP (-9.26% today) and some FXY (-2.19% today).

My portfolio is about 60% USD cash, 15% Yen cash, 20% stocks, and about 5% shorts. My YTD performance is 4%.

Gold (IAU) was down -2.76% today, which is probably explained by this part of the Fed statement:

The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization.

I tend to share this opinion, although the main reason for the drop today is most likely the momentary lapse of reason of the markets that this 75pts cut will bolster confidence in the U.S. financial system’s ability to absorb the current crisis. Nouriel Roubini agrees with the idea that Gold price will be under pressure in 2008 as a result of the recession’s reduction of long-term inflationary pressures.

As a result, I will adopt a wait-and-see stance with regards to Gold in the short-term. By the way, a chart I like to monitor.

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