My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I am a commodity trading advisor/co manager of a commodity pool who adheres to the philosophy of trend following.
Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets us apart from other Commodity trading advisors and commodity pools is that we are not only concerned about the return on investment but how much risk you will have to tolerate to achieve your goals.
Jeremy Grantham Views on the Economy
This was a great read that was on Scribd…
Jeremy Grantham, co-founder of GMO LLC, has penned his most recent investor letter. As Seeking Alpha blogger Edward Harrison deftly puts it: “[the letter] is a cutting, snarling, and sarcastic rejection of the prevailing V-shaped recovery bull market view. But Grantham is far from ultra-bearish, giving a more nuanced and realistic assessment for the medium and longer-term.”
Here are some major points from the market commentary section:
Barring any massively stupid human mistakes, we are in for seven lean years.
Corporate (ex-financials) profit margins will get slimmer.
Today’s markets — as of Oct. 19 — are 25% overpriced, and on a seven-year horizon they would move Grantham’s normal forecast of 5.7% real growth down by more than 3% a year.
Developed markets will grow at about 2.25% for the next “chunk of time.” Emerging countries, meanwhile, will grow at twice that rate. Grantham also refers to an “emerging emerging bubble” — or more, the emergence of an emerging market bubble, which Grantham suggests investors ride. “Riding a bubble up is a guilty pleasure totally denied to value managers who typically pay a high price to the God of Investment Discipline for being so painfully early.”
China might stumble in the next three years, which will present itself as an “important and unpleasant surprise of the fundamental economic variety.”
Particularly entertaining, however, is Grantham’s opening to the letter, which riffs on President Obama receiving the Nobel Peace Prize:
You know I can’t tell you how surprised, even embarrassed I was to get the Nobel Prize in chemistry. Yes, I had passed the dreaded chemistry A-level for 18-year-olds back in England in 1958. But did they realize it was my third attempt? And, yes, I will take this honor as encouragement to do some serious thinking on the topic. I will also invest the award to help save the planet. Perhaps that was really the Nobel Committee’s sneaky motive, since there are regrettably no green awards yet. Still, all in all, it didn’t seem deserved. And then it occurred to me. Isn’t that the point these days: that rewards do not at all reflect our just desserts? Let’s review some of the more obvious examples.
Grantham goes on to award prizes to Ben Bernanke for “missing the unmissable”; “Misguided, sometimes idiotic mortgage borrowers”; “Over-spenders and undersavers”;
“Banks too big to fail”; and “over-bonused financial types,” among others.
To continue reading the article..
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Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com
Futures trading involves risk. People can and do lose money
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Everyone is worried about jobs going overseas, but I think should they should be more optimistic. America is great for generating new jobs and dealing with change. My grandfather said railroads once lost a lot of business when electric companies switched from burning coal to nuclear power. Railroads also needed less workers when trains stopped using cabooses. Yet while some railroad jobs may have disappeared, new jobs like webpage designers and video store clerks have appeared. Horse buggy manufacturers became car manufacturers and typewriter companies now make computers. Many industries that were supposed to disappear like movie theatres due to VCR’s and accounting because of computers have never been stronger.
While manufacturing jobs may go overseas to cheaper locations, the United States still manufactures more than any other country.
http://investing.curiouscatblog.net/2009/10/13/data-on-the-largest-manufacturing-countries-in-2008/
Even if more jobs go abroad, the USA will always have factories. I highly doubt that the United States will buy fighter jets from China. The price of labor may be cheaper in Asia now, but as oil and shipping prices rise, buying American products will not seem to be so expensive. Chinese products also have a reputation for poor quality and counterfeiting. BMW does not worry that Chinese car companies will steal their customers.
Many jobs cannot be outsourced, either. You are not likely to call a doctor, lawyer, mechanic, mover, driver, barber, electrician, locksmith, real estate agent, or plumber in China to fix a problem you have in the USA. Are all the farms, mines, stores, hotels, museums, restaurants, churches, security guards, banks, government workers, schools, and athletes in the US going to be shipped overseas, too?
Even if all the manufacturing jobs in the United States went to China, wouldn’t the Chinese need American skills? Americans are creative. Do you think China will be known as the new Disney and Hollywood? Will China become famous for apple pies, hamburgers, hot dogs, baseball, gun rights, democracy, free speech, and religious freedom?
While change is sometimes scary and being cautious is good, hysteria is not. Think for yourself and don’t be a Chicken Little.