Tuesday

Agriculture

TheInflationist Buys Agriculture ETC

Markets continue to tumble as company earnings fall below forecasts precipitated by Walmart’s profit downgrade earlier last week - analysts are now busy slashing projected forecasts across the board and downgrading their recommendations. We closed our eyes and jumped in, reassuring ourselves (against one of our rules of NEVER try to catch a falling knife) that “When others are greedy, be very fearful, but when others are fearful, be greedy”. Our technical indicators suggest that this is just a pullback within a rebound - it is still a BUY with loss of demand and a slight increase in supply. However, we do feel that there could be more pain to come - we are almost but not quite there. So we will hold back on going long on the indices - but we will take a bite on the ETC Agriculture DJ-AIGCSM. TheInflationist longs 500 units (ie half of what we really want) at 5.840 using Igmarkets CFDs (ie 500 USD for every 1.000). Same reason, we are bullish on Agriculture and going long on the index is one of the safest ways of investing. Having said that, when AIG was on the brink of collapse a few months back, we were exposed to potential risks (owing the full amount of the contracts if AIG went under). If it goes lower we will double up our position. We are also looking at other opportunities at the moment - especially currencies and bond discrepancies.

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