The changing future of central banking

Joe Weisenthal over at Business Insider highlighted this release from the Bank of Japan that was released while most us here on East Coast were getting ready for Hurricane Sandy.

BOJ overcoming deflation

So does serve as new blueprint for central banking, a more "close" relationship with the government authority. In my mind, this makes it far more likely that monetary policy becomes fiscal policy while increases the chances of higher inflation at some point down the line.

China may be amassing large amounts of gold

The following is from Washingtonsblog.com. Follows the trend of  the country stockpiling a number of hard assets over the years.

China Is Quietly Becoming Gold Superpower

Posted on November 4, 2012 by WashingtonsBlog

World’s Top Gold Producer Holding Onto All of Its Gold

While Western central banks have frittered away their gold, China is quietly building up its reserves.
China is the world’s largest gold producer.

And yet – according to various sources – gold bullion brokers have not seen any gold coming from China.
In other words, China is producing more gold than any other country, but isn’t exporting any of it.
In addition, china is importing huge amounts of gold.
As such, China is quietly becoming a gold superpower.
Note: China has a habit of being quiet for several years at a time, and then announcing big increases in gold holdings. So quoting old numbers will only mean that one is caught flat-footed as to China’s current holdings.

High volume highs 11/5

Somewhat of a motley crew of new high volume highs. The list is significantly reduced from some of the days last week, the as the market pulled back on Friday.

Volume off the high 11/5

There is an expansion of new stocks or funds coming off the recent highs with volume. This is probably related to Hurricane Sandy, but a number of insurance and reinsurance companies have hit the screens.

Can we predict everything? Can we have enough data?

Long-term Value Portfolio for week ended 11/2

I have not updated the the performance of the long-term value portfolio since October 19, as my ability to post before Halloween were impeded by my preparations for Hurricane Sandy. Since October 19, the Long-Term Value portfolio fell 1.8% versus a loss of 1.3% on the S&P 500. Since inception, the fund is up 2.5% since June 30, falling short of the S&P 500 by 130 basis points.



I would expect the performance versus the S&P 500 to close over time, due in part to how the portfolio is constructed, which I have detailed extensively in prior posts.

Trading portfolio update for week ended 11/2

It has been two weeks since I provided an update on the performance of the trading portfolios, as my preparations for Hurricane Sandy did not allow for much time for do any posts. Since 10/19, both the long and short trading portfolio investment have remained unchanged. As a reminder, the long and short public profiles can be found here and here, respectively. In addition, these portfolio represents recommendations that I have publicly stated. 

The long-trading portfolio finished the week at a value of $11.45 or gaining 0.8% since 10/19. This compares to a loss of 1.3% on the S&P 500 over the same time period. The blue line in the graph below represents the long trading portfolio while the green line is the S&P 500 and the brown line is the NASDAQ.



The portfolio is currently composed by long positions in coal stocks, the Proshares Short 20+ year Treasury Fund (ticker TBF), and the Advisor Shares Ranger Equity Bear ETF (ticker HDGE).

The short trading ended the week at $10.28, gaining 2.1% since 10/19 versus the 1.3% loss on the S&P 500 over the same time period. Portfolio positions include short positions in a number of mortgage REITS (in an attempt to simulate the Mortgage REIT ETF), Spider Gold ETF, the United States Oil Fund, the triple Q's, and the S&P Homebuilders ETF (Ticker XHB), the later of which I on may close with a small loss.





Similar to the above chart, both the green line and brown line represent the performance of the S&P 500 and NASDAQ, respectively, while the blue line is the short portfolio.