Playing with fire around the Xmas tree.

Posted on Dec 21, 2008 by in Letters

Occasionally we feel like busting out of our three piece grey flannel suit and doing something wild.  Sometimes we catch the tree on fire.  Sometimes we burn the house down.  For our Christmas folly this year we looked at the chart in the bonds and said, hmm, that looks like the Case-Shiller chart of real estate and the tulip bulb chart, which of course it does look like.  

TLH

This may be a James Rogers trade.  (He remarked that while he was famous for catching the tops of markets and shorting them that no one ever talked about the five or six losing trades he made being early.)  It may be early.

But if you’re going to short something there are two times to do it:  on extreme strength and on weakness.

So we bought some TBT and PST which are short bond ETFs.

PST.  These are extremely speculative trades.  We do not advise that our readers take on such risk.  There will be money to be made in short bonds and we will publish our analysis when the time is right for the non-gamblers.  We record the transaction in order to observe our policy of complete disclosure and transparency.

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