Wednesday, October 10, 2012

A chart of one of the world's strongest Currencies The Aussie -Post started August 12, and is updated frequently

                     current - this chart automatically updates daily
10/12/2012 - began swing trading BHP and RIO (in one day and out the other) Started a 20% position in AAPL (Apple) - upped to 50% - after sneak post on what they will offer on 10/23
Earnings are in less than 2 weeks and an introduction of a smaller iPad 2 days before - will increase the position to 100%  
Leading up to earnings (Apple usually falls back on good earnings - and then resumes) I'll sell prior to the release.

N/B There are technical signals throughout the market calling for a pullback... in an ordinary market the market would "adjust" downward.  AAPL can pull up the entire market...
Lots of negative talk on INTC... I'll protect my position by buying puts or selling calls into next Tuesday's earnings. Intel is selling at a price with an equivalent Dividend of 4+%... The markets are holding till the elections - 
10/10/2012 - Additional Securities in the Mix - I have taken a position in FFGCX a Fidelity Fund - Fidelity Global Commodity Stock Fund (BHP and RIO are amond their largest holdings) and Fidelity Contra Fund - FCNTX - one of the larger holdings is Warren Buffett's Berkshire Hathaway "A" Shares. Both holdings together represent about 25% of My trading accounts. I am also at 20% cash up from 0% cash at 10/01/2012.  The above holdings are a slight diversification from my original Australian positions - concentrated. 

Update: October 9 - phasing in RIO and BHP and Adding to INTC
Update: October 4 - out once again, although BHP and RIO are not reacting to the drop in the Australian Dollar or the news that Steel is hitting a bottom $, the future being less than good until maybe 2014 (China economy resumes upward... some say) - I have decided to take a break as my holding the two largest Mining companies in the world - is not reacting to my gut feeling- that these companies should be going downward in prices.

Update: September 27am - re-entered my Australian positions  - at a lower cost basis.. looks to me like a good move - atleast today....

Closed my positions on Sept 18 - re-enter after lower to support and gap closing

Austin, My grandson, and I are fully invested in Australia, for the past few months. We are not diversified, except we both have Intel as our "base" US Stock - Austin also has Amgen for his future. Our holdings in Australia are the two largest mining companies in the world.  Rio Tinto and BHP Billiton - The first economy to move forward will be China - and they hunger for Basic Materials - Iron and Copper their biggest providers - RIO and BHP.  While we are holding we are getting 3% dividends, including Intel's 3% Dividend. If these stocks go up it will be a combination of  Their Growth, The Growth of the Aussie and the Dividend rate. The interim financial statements of these companies are showing, in this slow economy, cash flow and profit in excess of 2X their dividends paid out.  Investing in US Markets is a lost cause - Congress through Lobbying efforts of Big Money will not budge to control Big Money - are we as corrupt as China - of course!

Update September 4

When this post was made (August) the Aussie to the Dollar was 105 it is now in the 102 - 103 range. Although it has adjusted slightly downward to the dollar - they have to stay competitive on the world markets for goods and services. My beliefs are still strong here both in the $Aussie and the two mining companies

Update September 12
The $Aussie has reversed course and is rising again - today in the 104 - 105 range.  The Major players in the world are all working on Qualitative Easing (QE3 in US) which will lower the value of the $US - therefore increasing the value of other currencies not in a QE frame of mind - one of which is Australia.  ergo, $Aussie will rise... Australia does not want their $A to go up much more as it increases the costs of their products in other countries.  It should be noted Australia did not go through a Recession as we, and other countries, did recently. Australia is thinking smart now - untouched by Political bomb shells. 
Australia is now upping their production of LNG - natural gas.  It will have more effect than before, on the economy and will eventually be a prime mover in their economy along with Mining.

 From Dr. Duru (famous T/A writer) - Seeking Alpha on July 20

To the extent the strong Australian dollar is a result of a carry trade, the currency could sink fast at any time. In the meantime, you do benefit because companies like BHP are more valuable with profits in Aussie dollars. But if the RBA (Reserve Bank Of Australia) is correct, this strong currency will soon start hurting Aussie business as their goods get relatively too expensive for struggling economies. The trouble I have with this line is that I don't know where else China would go commodities shopping to replace Aussie supply. 
You were fortunate in parking where you did for the summer! Just make sure you brace yourself soon. If the Fed rolls out QE3, you are golden.

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