Comments on Fund My Mutual Fund: Risk is High

Mark, I've still yet to toss up my cookies and go ...

2008-05-17T11:54:00.000-04:00

Mark, I've still yet to toss up my cookies and go 'all in' long.. but I absolutely refuse to sell down what little 15% commodities exposure I have left.

I totally agree with you about chickens > pork > cows. I spent quite a while trying to find some way to get some chicken exposure, but the effort was fruitless.

Did you ever find a way to get rice exposure? I did find an Ag ETF that had some, but its weighting was around 10%, with a broad mix of other things.

I'm also thinking of MON again, as all this hording, export taxes, etc could really lead to opening up the products that MON offers. Add to that, the cycle back to corn shortages. Valuation is a little not great, on a relative basis to other ags, but that could quickly change.

if you click on the label for iPath Livestock you ...

2008-05-16T14:45:00.000-04:00

if you click on the label for iPath Livestock you see my identical explanation as Coxe, in fact. Plus I told my parents to stock up on meat (freeze it) about 2-3 months ago ;)

Remember all the jokes about its going to cost a mortgage to BBQ on Labor Day?

How is that opposite? I am long COW. That explain...

2008-05-16T14:44:00.000-04:00

How is that opposite? I am long COW. That explains my position :) I just don't think it's going to happen tomorrow if people think its going to rise 20% next week or next month.

"Today" I believe you still have a glut of meat combined with people pulling back from more expensive products (aka meat)

"Tomorrow" I expect consumers to have still pulled back as they get poorer per capita but meat to rise substantially on basic supply/demand. And worsening as corn gets more expensive later in the year.

I am not sure how that is opposite.

Your big brother (Coxe) has the opposite view of m...

2008-05-16T14:26:00.000-04:00

Your big brother (Coxe) has the opposite view of meats. He expects much higher meat prices across the board. Short term ranchers have been slaughtering livestock because feeding them is too expensive. That will have obvious consequences later. Meat is the one commodity that has NOT been going parabolic yet, and has some catching up to do.

I am long cattle futures for Dec'08

Cut a little COW since it made a nice run here to ...

2008-05-16T12:26:00.000-04:00

Cut a little COW since it made a nice run here to mid 44s
I'll probably put it back in around 43 if it gets there or 42s

This wont really be apparent until later in the year or early 09 I believe.

There are a lot of cows in this country ;) remember that. Plus as people get poorer the demand for meats will also cut. People are probably already moving to chicken. I'd actually like to have a chicken etf. It sounds like chicken and hogs will actually go up first, and then beef later in the year. But this is a not a "fast money" play. It is sort like DBA last year - look at a 2007 chart. It sat for a while and then took off and made a huge run. Dont know if COW will have the same level of run, but it should have a significant move later into the calendar. Could sit here in a small range though for a few months.

Most of our corn goes into feeding livestock, not people. 2008 will be the year of corn. Wet ground and weather is still an issue and you can't plant corn late so by end of May we will know what the actual corn crop will be. It is not looking good thus far.

Mark,Are you doing anything with COW or still sitt...

2008-05-16T12:16:00.000-04:00

Mark,

Are you doing anything with COW or still sitting on that 2.6% position? My question is...why is/will it taking/take so long for meat prices to catch up with the other ag stuff? Corn/grain and the other meat "inputs" have been going up for some time now, surely these increases should have started reflecting in the end-market price of meat by now??? I saw your previous post but still didn't quite grasp the reasons for the major lag effect.

Andrey,I hold it as a hedge against my longs but I...

2008-05-16T11:40:00.000-04:00

Andrey,

I hold it as a hedge against my longs but I am getting my head handed to me on this position. I own it in personal account and here, and since I am a sucker for punishment I bought more today. But it hurts. A lot. :) One day it will reverse, and hard and be very profitable with the right timing. But so far I'm swimming with the fishes on this one.

Mark, what do you think about SMN? (at least as a ...

2008-05-16T11:38:00.000-04:00

Mark, what do you think about SMN? (at least as a hedge to ag/steel positions) Did it find its bottom at 27+?

Hey Guy,Your name sounded familiar so I believe I'...

2008-05-16T11:36:00.000-04:00

Hey Guy,

Your name sounded familiar so I believe I've read your stuff over at RealMoney - been a subscribe there since late 90s. Name looked familiar. Nice to "meet you". It is funny how the world is circular in many ways - all paths sort of cross at some point.

Old fashioned, innovative research huh? Well that puts you out of sorts with most of Wall Street research which is just a way to say nice things to get investment banking business ;) As you know I'm sure.

I'll add your link - thanks!

MarkI totally agree with you...it is a matter of t...

2008-05-16T11:30:00.000-04:00

Mark

I totally agree with you...it is a matter of timing; in my world - where I try to quantify market factors - there is rarely accuracy.

The website is www.thetechnicaltake.com.

I am old school...no blog. I just try to produce good old fashion, innovative research.

what is your website, I'll add it to my blog roll....

2008-05-16T10:53:00.000-04:00

what is your website, I'll add it to my blog roll.

Guy, the problem is timing. Unfortunately being c...

2008-05-16T10:52:00.000-04:00

Guy, the problem is timing. Unfortunately being cautious the past few weeks leads to major underperformance. So we can be correct conceptually but wrong in terms of performance. So I've riden the "wave" the past few weeks, drinking Kool Aid along the way. But at this point it's beginning to reach the point of inane, so I'm going to change the tone a bit and allow myself to miss out on some of the moves from here, in return for more protection.

The markets always move in ways that frustrate the most people. I believe many people have been cautious and doubting the rally the past month, which in an intellectual level makes sense. Unfortunately this market is not full of intellectuals ;) I am beginning to see a lot of people I read/skim throw in the towel and go long. So as more do that, I believe the market will turn around and punish them. The level of frustration by that cohort is very high since they missed this move.

Mark:I agree in general with this post, and this i...

2008-05-16T10:42:00.000-04:00

Mark:

I agree in general with this post, and this is something I have been saying for weeks: this rally is more due to unwinding of bearish sentiment; the rally has been on poor breadth; the rally was likely to end at or above the 200 d MA for the major indices. With inflation rising and sentiment now more bullish, these will be major headwinds.

For the record: 1) a "dumb money" indicator is close to bullish in the extreme; 2) a "smart money" indicator is bearish; 3) an indicator constructed from the trends in crude oil, gold, and yields on the 10 year is at an extreme reading indicating high inflationary pressures---this is a major headwind.

Now all these indicators and my analysis are meant to imply major headwinds for equities. But it would not surprise me to see markets higher in the short term. Why? Because that is how it works. Rarely does this stuff work right on cue. Usually the markets will question one's conviction while prices move adverse to one's position or belief.

What to do? In the absence of any improvement in breadth, I have been suggesting to my readership to sell into these daily rallies as it looks like the headwinds are starting to blow hard.