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Portfolio123 » List all forums » Forum: General Comments » Thread: Is the US economy about to implode? |
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Johnny99
Member
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Sovereign (Federal) debt is at $13 trillion or 90% GDP. Federal + State + Corporate debt + Personal debt in the USA is at $55 trillion Ben Bernanke has recently effectively doubled the money supply with quantitative easing Gold is soaring... http://www.youtube.com/watch?v=eZA0qNsf4m0 People are predicting Peak Oil in 2014 http://green.autoblog.com/2010/03/18/kuwaiti-study-conventional-oil-to-peak-in-2014/ Ofcourse I've been thinking about other countries situations aswell and Europe certainly isn't fairing much better. Of all the countries I've been looking at Australia strikes me as the only country whose financial policies even begin to approach being sensible. They have low debt and they are a large net exporter of raw materials, which are likely to become scarcer in the future. The fact that p123 only has US stocks listed, makes me very nervous to be honest. Is there any possibility of applying this same software tool to the Australian stock market? |
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Isaac
Advanced Member
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You may be right, the US economy could implode, or it might muddle along for along time. So, do you invest based upon your fears and beliefs, or do you invest/trade based upon what the data shows you to be happening. I've been around long enough to know that the former stance is really just a game of luck that most people lose. Even if you decide to never go long US equities, there is plenty to invest in. On this site you can limit your search to ADRs of foreign companies listed in the USA, or ETFs exUSA, or ETFs that are inverse to US equities, or search for overextended US equities and sell them short. All of these techniques will fit into your belief system. The important thing is to test your ideas and see how they perform. And to develop techniques to allow you to shift your stance as the circumstances shift. I agree that Australia has very good prospects, however EWA- the Australia ETF is down about 30% from its recent peak just 6 weeks ago. To have held Australia during this time would have been very unproductive. Over the same time the US dollar ETF UUP is up about 10%. Who would have "believed" that would have been the case. So I say do the best follow the what the trend is telling you, rather than what you believe should happen. I do think that Australia, Brazil, Canada, energy stocks (ex BP), Ag stocks, commodity stocks, and tech stocks have great future prospects and intend to keep a close pulse check on these sectors. But I will try hard to not just buy them for their story, rather I will patiently wait for the charts to look favorable. Best of luck. |
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Johnny99
Member
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I agree, I am currently trading a p123 strategy and I too try not to trade on the basis of fear. Going short on US equities might not help and could infact be disatrous, for example during the Germany pre WWII period, although Germany stocks as denominated in US dollars went down by 60% as denominated in marks they went up by millions of percent since the marks value went down to practically zero. In otherwords if you shorted German stocks before WWII under the assumption the German economy was in trouble, you'd have been correct in that the German economy was indeed in trouble, but that would not have saved you from going deeply into debt as the value of cash went down faster than the value of German Companies. The same could happen in the U.S. A slightly annoying thing about ADRs is they take a fraction of your dividend. On the issue of Australian stocks, I'd rather not trade blind, I'd much rather have a software tool like p123 where strategies could be back tested on the Australian Stock market and then implemented in real time. Do you know of such a tool? Could we add this as a function to portfolio 123? |
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