An update...

I have not posted for a month since I've been busy with work and relocation from Bellevue -> Redmond (btw, moving is a bitch!)

I have also been quiet with my trading, I am still overweight on Brazil with the remaining vested in China. A lot has happened since my last post a month ago. We saw oil at record highs and just today I filled up my Audi with at 4.50 a gallon (1. I was at Chevon and 2. I pumped 92 octane... don't ask why). I think it's time to make regular drives to Costco for my gasoline! Bernanke in a surprising move spoke about the dollar yesterday (I say surprising because he rarely talks about the dollar directly).

"We are attentive to implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of an erosion in longer term inflation expectations"

It pretty much says "We are done printing money, lets get the dollar backup!". Commodities swiftly reacted as most of the hard and soft commodities have traded significantly lower. This brings me to my next topic, OIL.

There's no doubt that we are in a OIL bubble. But this bubble isn't one without strong fundamental. Today , Oil corrected back to 122 amidst demand concerns. Has 4.00+ gas really effected the way you live so far? Yes I agree its painful but so far I have not changed my spending habits. Oil has corrected and the oil bears are out with every possible way to sell crude. Reasons I have heard why crude will crash

1) USD dollar rising
2) CFTC stepping in to crush speculators
3) Demand drying up as oil hits record highs

While the USO (ETF tracking Crude) was over bought a week ago, the correction in the past few made crude over sold (I am too lazy to put the chart). On the note of CFTC eliminating speculators, I peronsally feel the impact will be limited. During this correction. I have been adding to my stake more PetroBras.

PetroBras fudmentals continue to be improving with news tonight that Fitch upgrading it's credit rating to BBB-. This past month, PetroBras has also secured 80% of the oil rigs in preparation for which could possibly be one of the largest discoveries since 1973.

For those who are interested or has a vested interested

Current Exploration Concessions
Off Shore Rig Stats
Block Relinquishment Schedule

The above three links should give you a good idea as to where the next discovery will be. On a more bearish front, the costs to exploit the new discoveries could cost near 240 billion dollars
I also added UBB (UNIBANCO BRASILRS SA) and X (US Steel) to my portfolio.

One of my favorite guru investor Ken Heebner was voted America's hottest investor (article below). Lets hope he lives forever because I do own shares in CGMFX :)
http://money.cnn.com/2008/05/23/magazines/fortune/birger_americas_hottest_investor.fortune/

I love Brazil :)

The S&P tonight raised Brazil's investment grade for the first time. Brazil's sovereign debt is now at BBB- up from BB+. This ultimatley lows funding costs and makes Brazil even more an attractive place for BIG money to invest. Bottom line, this is HUGE for brazil and I think it's only the beginning.

All brazilian stocks were on fire today, I'd be buying on any weakness

Brazilian exposure in my portfiolo:

RIO, PBR, FLATX, CGMFX

Looking to buy:

UBB, ITU

Adding to Petrobras / China

PBR:

Bought another 50 shares of PBR adding to my entire holdings to ~200 shares. Gotta love these pullbacks!

CAF:
Bought another 100 shares of CAF

POT:
Waiting for pullback to 170 before buying

Microsoft, Potash, the Dollar, and Taiwan

Microsoft:

As a employee, my opinion is ofcourse biased but I dont think the results were that bad. If you compare revenue against deferred vista / office revenues from last year, yeah its a drop. Factor them out and you have a solid company trading (as of right now) with a forward PE of around 13. I was happy to see XBOX in the green for the quarter and service continues to pick up momentum. What makes me shed a tear how MSN continues to bleed money..

Potash:

For those lacking confidence recently on the company, you should read their latest 10Q. It states a 6 -7 paragraph which confidently says "those who own our stock, buy more. For those who don't, buy our stock you dumbass". :)

Dollar:
The dollar continues to rally as hopes that BEN will take a break from printing money. This might pressure commodities prices but I seriously doubt it (although I feel rough rice will make a HUGE correction soon rather than later). The safest place to park money is still in the Yuan in my opinion

Taiwan:

more improving signs that things are improving between Taiwan and China

From scmp.com

"A top envoy for Taiwan’s president-elect was expected to meet with local officials in Shanghai on Friday in the latest sign of improving relations.
Chiang Pin-kung was appointed by Ma Ying-jeou, whose new government takes office May 20, as chairman of the Straits Exchange Foundation, a quasi-governmental body that has held talks in the past with a mainland counterpart. China and Taiwan split amid civil war in 1949.

Expectations have risen for a resumption of dialogue between the foundation and China’s Association for Relations Across the Taiwan Straits after a decade-long break."

Can the Red Dragon breath fire again

I was delighted to see my Chinese stocks light up this morning (CHL, LFC). Shanghai rallied 4+% percent last night making a huge reversal from the open. I believe we have seen a short term bottom from a very painful correction (painful is an understatement, the shanghai index dropped some 50% from peak!). Is all this buying pure speculation that the government will step in and stop the hemorrhage ahead of the olympics? It could be ... but I bet we'll see more bargin hunting even if we were to see lower lows.

I remain bullish of Taiwan:

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSTP26206620080423
http://afp.google.com/article/ALeqM5gmTM58C0oFJXLpmnfHUw2ZIqkH1Q
http://www.iht.com/articles/ap/2008/04/22/business/AS-FIN-ECO-Taiwan-China-Investment.php


Looking to buy: CAF [Morgan Stanely A Shares China mutual fund]

Putting money in Taiwan

When Jim Rogers speaks, I listen and listen very carefully. Jim rogers recently has been bullish on Taiwan near the end of the Taiwan election when speculation that Ma Ying-jeou would win by a landside. With Ma taking over on April 20th, relationships between Tawian and the Red Dragon China are already improving. Vice-president-elect Vincent Siew met with President Hu Jintao of China on the sidelines of the Boao Forum. Ma called the meeting a success saying "Of the big icy mountain, only a small piece of ice is melted," This was considered the highest contact both countries had in more than six decades. China is also considering lifting visa restrictions for Hong Kong residents wanting to travel to Taiwan. Then were also rumors that China had removed missiles that were aimed at Taiwan. Tourism stocks have surged since the victory of Ma. I expect more economy prosperity for local businesses in Taiwan. It can only get better.

Disclosure: 700 shares of EWT (Taiwan ETF)

Could Petrobras be producing oil on a middle eastern scale?

Yesterday, the head of National Petroleum Agency Haroldo Lima made a statement regarding a potential oil find near Carioca field. He estimates that the area could potentially have reserves somewhere near the 33 billion barrels. If confirmed, the new deep-water sub-salt field off the coast of Sao Paulo state would be the largest find in the world in the past 30 years. The stock reacted, skyrocketing ~8%. Petrobras is my largest holding and I was happy to see any appreciation in this stock. This find if confirmed dwarfs the last time PetroBras discovered in Tupi. However, this news was widely known and many had widely speculated that huge amounts of oil in near the Caroica field existed. Is the market late to the game? Who knows. I do know that the managment at Petrobras is extremely conservative. When this is confirmed, it definitely puts Brazilians state owned Petrobras on the top 10 oil producing countries. Brazil to join OPEC ??? :)

IMF warns food prices might cause starvation

The IMF warned that food price inflation would cause starvation if trend continues From the article:

"Thousands, hundreds of thousands of people will be starving. Children will be suffering from
malnutrition, with consequences for all their lives," he told reporters.
He said the problem could lead to trade imbalances that may eventually affect developed nations, "so it is not only a humanitarian question".

With the falling dollar, and with the increasing usage of corn going to the production of (inefficient) Ethanol, I do not see this problem going away anytime soon. It will be extremely sad if we do face global starvation. Recent riots in Haiti and the Philippines demonstrates how serious this problem is becoming. How can we solve this problem? Relinquish our Ethanol plans which will free up 30% of the corn produced in the USA for food (an not expensive alternative fuel)
As traders and investors, it makes very much sense to place our long bets with the soft commodities.

Week in review

It hard lesson I learned this week: Don't chase performance. I was too hopped up being bullish this week that I over looked many key criteria when buying a stock. As of right now, I am heavy weighted in Energy and Chinese stocks. Even though it doesn't feel like a bottom with these Chinese stocks, I do think 5-10 or even 20 years from now, these investments (LFC, CHL) will reap huge rewards. I also took a position in DBA (Power Shares Agiculture) and Natural Gas (UNG) along with Brazilian miners RIO (CVRD) . I continue to think commodities (more so AG the metals) will continue to outperform. I also added Petrobras (largest in my portfolio) this week, I share the same opinion of the legend Ken Heebner that Petrobras could potentially produce oil on a middle eastern scale. In short, I am focusing on the long term now. I do think 23-36 months from now, these investments will reap rewards.

I will be cost averaging and building a bigger position in the Tawian ETF ETW. Taiwan will reap massive fiscal benefits as tensions between China and Taiwan improves. We are already seeing changes taking place. Last week, the Chinese government was said to have removed the missiles that were pointing to Taiwan. I believe Taiwan is a place to really keep an eye on this year.

Shifted Positions

One of my rules is never let a positions go below 10%. This is to reduce the potental loss of a position I might have. ACH and FMCN has fallen below 10% of my buying price so I had to bite the bullet and hit the SELL button.

I shifted that money into buying more PBR and UNG

Current holdings in the order of most weighted

PBR
CHL
UNG
RIO
RJA
LFC
MELI
VIP
EWT

Stepped in to buy more "stuff"

New Positions:

Long 100 shares of PBR
Long 100 shares of ACH
Long 100 shares of VIP
Long 100 shares of RIO

"We Can't Go Down" attitude

Today's horrible job numbers would have led me to believe we were going to plunge triple digits on the dow. But I am not surprised that the market is up ~30 points from yesterday's close. The market just doesn't want to go down. Buyers are stepping in on any weakness and they are not selling on strength. I am back on the long side for now and will be aggressively buying emerging markets..

Transactions today :

Open 100 shares of MELI
Open 100 shares of FMCN
Open 100 shares of LFC
Open 100 shares of CHL

Looking to buy:
ISRG, AAPL

Is the bottom in?

Like they say, when you pick bottoms you get SH*T but is the bottom in? Short term, I believe the BULLS are going to take charge. A lot of talking heads that were extremely bearish are turning bullish. And cramer says we should becareful which means we really consider start buying :)

Even though we are again in extremely overbought conditions, the dow did flash a double bottom...

Whats looking more interesting are the emerging markets, in particular CHINA. It seems like the correction in asia is finally over as the downtrend has been broken

Tomorrow, I will start to buy Chinese stocks again. In particular FMCN, BIDU, CHL.

The Bulls come out to party

I haven't been posting much, thats because I havent been doing much :.

I took some off the table with MSFT two days ago (douh!). It was a bit too early considering the rally. My motivation behind that is 1) our 401K is opening up 2) one should never invest their 401K savings into their employers 3) MSFT has done jack.

People seem to have forgotten or looked away from today's financials doom and gloom news (UBS, Deutsche Bank have to write down additional losses in subslime). Money is being rotated out of commodities and into the beaten up sectors like financials, and tech.

If we get another big rally with impressive volume like we had today, I will be forced to take put the chips back on the table.

Eyeing: BIDU,FMCN, LFC, CHL
Holding: PAL, EWT, RJA

Strength continues in Financials at the expensive of Commodities

It seems like alot of money is flowing out of commodities and into financials. I actually favor the correction in commodities, its very much needed. I see this trend continuing for a week or maybe two. Today I took a stab at the Tawian ETF - EWT. Ahead of the elections this weekend, my bet is that the more-china-friendly opposition party will win. But who knows.

But 400 shares EWT at 15.73

Financials Rally

The shocking news of Bear selling out for 2 bucks is still reverberating in my head and on wall street. Financials are rallying hard today, I do see a short term bottom in these stocks. I will be looking for another good entry point to short these suckers :)

Ripe's Big Ass Jerk Rib Eye Steak Recipe

Since this is my blog, I can write about anything I want and that includes non financial stuff like recipes :)

I saw this recipe on the Food Network (my favorite channel to Idle on). I haven't tried this but it sure looks damn goooood.

http://www.riperestaurant.com/articles/article/4398027/84567.htm



RECIPE FOR RIPE'S "BIG ASS" RIB EYE JERK STEAK

At the restaurant, we use the "Choice" grade cut-feel free to use
"Select" or "Prime" for this recipe.
1 16oz cut of boneless or bone-in Rib-Eye Steak.
Ingredients for jerk paste:
1tsp Nutmeg
2tsp White Pepper
¼ C Black Pepper
½ C Kosher salt
¾ C freshly ground Allspice
¾ C Brown Sugar
¾ C Orange Juice
1 whole Scotch Bonnet pepper
1 bunch Jamaican Thyme
8 whole Garlic cloves
¾ C chopped Scallions (green onions)
2 cups whole Ajicito pepper (flavorful but not hot)
METHOD:
Put ajicito peppers, scotch bonnet pepper, garlic cloves, thyme and scallions in food processor and pulse until it forms a paste. Then add the remaining ingredients except for the orange juice and blend. Slowly stream OJ into the processor. (Jerk paste keeps for approximately 1 week in the refrigerator). Smear paste over one side of steak and season the other side with salt and pepper. Marinate for 1 hour or up to 48 hours. Place steak on a hot grill and cook to desired doneness.
NOTE:
Ajicito peppers can be found in most Latin markets. It is also called "seasoning peppers" in Caribbean circles. It looks and smells just like a Scotch Bonnet pepper, but without the heat. It is used in the recipe to increase that scotch bonnet flavor, but can be omitted if it can't be easily sourced. Just add a bit more green onions and scotch bonnet (if you can handle the additional heat).
Jamaican thyme is a little more "earthy" than the regular stuff found in grocery stores, but can be substituted with the regular stuff if necessary.
After letting this rub sit for a couple of days, the heat mellows out significantly anyway, so make a large batch by doubling or tripling the recipe. You won't be disappointed, and it lasts for weeks in the fridge.

The Bear Sterns Bear Trap

I knew those puts volume leading to the collaspe of Bear Stearns today was the weather forecast telling me it's raining, rather heavily, on Bear today :). What I found interesting was not too long ago (in fact, 48 hours ago.. the CEO of Bear went on CNBC to reassure everything was A-OK). Fast forward 48 hours and Bear needs liquidity. I expect S&P and Moodys to come with a downgrade rather sooner than later. The Vix spiked to 32+ so I took my SKF position off the table. I sense capitulation in the financials today. Then there's Mr Ben the Bail Out man, who's running the printing presses today to save Bear.

Positions Closed: SKF +35% Gain

More Hedge Fund Hemorrhage..

Drake Managment who runs the Global Opportunites sent a letter to its shareholder detailing the plans for the future of its fund. Its considering either winding down the fund, invest in a new fund, or wait for the market to turn around. The guys over at Drake Managment no armatures, they churned out 41% in returns in 2005. This is how bad things are right now and in my opinion..its only going to get worst. The more I think about the 200 billion dollar Ben is jamming into the market, I wonder what FED will do when these M.B.S. are valued so low they lose significant amounts of money on them.... will they run hit the "print money" button causing more pain on the dollar? I continue to be caution of the dollar .. those currency ETFs will be a place I will park extra money.

As I watch CNBC's Fast Money tonight, most of the traders (except for one) were bearish on the Financials. The night before, all of them were bullish... talk about being fickle. Then there was this other gentlemen that says most of the buying done yesterday was "real buying" as opposed to short covering... hog wash!! ... Until I see 33+ on the vix, we ain't see the bottom yet..

A surprise move from the fed

I was surprised by the move the Fed took , being on the short side and all. Yesterday was the best market up days we've seen in 5 years. From my understanding, banks can trade in their mortgage backed securities that are mysteriously valued in exchange for treasuries. Will this be a good long term solution? Who knows but it's sure better than devaluing our dollar via rate cuts. Can we rally higher ? Very quite possible. But are we still in a bear market, you bet ya.

I didn't get a chance to take off some SKF so I'll continue to hold it. My main target is to find a sweet exit point for MSFT.

Oversold? Maybe..

Although the Vix didn't spike or gap up to 30+ , we were pretty damn close. More bad news from Lehman, BearStearns , Carlyle, BlackStone, pressured the market. Its the same old story. Althought we didnt see the capitualtion I would have liked to see, I feel the market will be set up for a short term oversold rally. Weak after hour earnings report from the homebuilders is pretty much expected so I don't expect the market to move downwards solely based on this piece of news. I will start covering (selling in this case) my SKF position as it has been quite profitably.

I am also looking at the commodities in general on bigger pullback.... in particular UNG and DBA...

Long term I am still bearish but short term I expect a bounce. Strength should be sold into and I will be looking for a good exit point in my MSFT position.

On the topic of Elliot Spitzer being investigated for being linked to a prostitution ring, I can bet you Dick Grasso is celebrating tonight :)

Ring Ring, Margin Call...

Stories have been told in the past credit crunch crisises that margin calls to Merril were so frequent, that they stopped picking up the phone for three to four hours. You'll get a margin call when the clearinghouse (lender) you owe money to requires raise and fork up more capital to better secure the debt you have. That debt could be "leveraged" against anything, in Thornburg / and Carlyle Captial's case, it could be in the form of mortgage backed securities which is only fortune tellers could only value. Word is that others (Anworth Mortgage Asset, MFA Mortgage Investments, Annaly Capital Management, and Capstead Mortgage) are next on the list to default. As expected, volatility exploded with the DOW down more than ~214 points. Reverse ETFS were the only thing on my screens that was green. Technically, we have taken out the Jan lows on the S&P.





If tomorrow's job numbers are bad, hold on to your seats because "Captain we are going down!". I hope to see a panic tomorrow, wash out the weak holders. If I feel panic is in the air, I will certainly a little bit of profits off the table with SKF (currently up 25%)

South Africa's government announcement of easing miners to work at 95% capacity took Platinum and Palladium stocks (PAL and SWC) down today. It is a matter of time until they these problems happen again. I continue to hold PAL

Thornburg faces chance of bankruptcy?

After hours news: Analyst says Thornburg faces chance of bankruptcy as its failure to meet a $28 million margin call from JPMorgan Chase has triggered a series of defaults on various lending agreements.

Reaction: What a big surprise.. uhhhh NOT!.. and did anyone notice the big Ambak bailout news that was and reported on CNBC's by charlie Garsprone two days ago ? In case you haven't heard, AMBAK's going to raise capital not via capital infusion but at the cost of existing shareholders by diluting its stock through raising $1.5 billion in public securities. I am shocked that the market didn't sell off today. Maybe the recovery in the commodities group held the market up. Now all I need is for Ambak and a few others to go bankrupt and that will give me a good reason to close out my short in Financials. I am still waiting for more blood to shed in the next two weeks as financials report their earnings..... I mean write downs....

Oil jumped on bigger drawdowns, I believe oil is breaking out and I wouldnt be surprise to see Oil Futures trade near $120 in the next two-three months...

As Ben continuously devalues my hard earn USD, I am thinking of buying foreign currency ETFs (FX [a]/[e]/[c] or [p]). The only reason being that I think GOLD is a bit toppy here for my taste

Holdings: See below... nothing new

Band-Aid Ben

This was shocking when I read the following in the Wall Street Journal today..

"Federal Reserve Chairman Ben Bernanke, raising the level of urgency in dealing with the nation's housing crisis, called on lenders to aid struggling homeowners by reducing their principal -- the sum of money they borrowed -- to lessen the likelihood of foreclosure, and endorsed a bigger role for the federal government in backing such mortgages."

Ben needs to stop putting band aids on an ill infected wound. Let the financial system clean it self out, let a few big banks go bankrupt. Historically, a "soft landing" remedy by the government has never worked.

This emotional market is great for trading. I heard what saved the market was that CNBC had reported another update on AMBAC that the bail out is making lots of progress. If only CNBC can us from a bear market hahah.. My prediction is that DOW 1100 will come within this month :)

Long Postions: PBR, POT, PAL,MSFT
Short Positions: SKF

Closed Position: Drys Put options [+70% gain]

Grain correction on the horizon?

This year's best performing ETFs have been all commodities related (DBA, USG, USO, GLD, SLV. Wheat and soy have been trading at parabolic levels and it sure smells like a bubble is near. I am no hero to call a top here, the demand and supply is SOLID and I still long POT and RJA but I am starting to get worry. But then again, I just have to look at how many times my local chinese restaurant have "redesigned" their menus along with increasing their price to see that this commodity boom is real.

Financials are again the soft spot as more bad news come from TMA. The market did handle this bit of news pretty well reversing all of todays gains. However I expect more blood to shed, I am sure the DOW will way to 1200 this month.

Long Positions: MSFT (waiting for a good exit point.. sigh), POT, RJA, PAL
Bearish Position: Drys [via put options] , SKF