Game on

OK, devoted readers. I'm back!

I've been pretty down over the past little while and didn't have anything to say... Until now!

Lately, I've been a'buyin (and a'sellin) futures. I've learned that commodities & futures are where it's at, baby. In a nutshell, I'm convinced that we're in a commodity cycle, we've been in one for a while, and we'll continue to be in one for a while. Some call it a "super cycle" - I could care less about what "they" say though. Basically with India and China exploding at the same time energy is peaking, everyone is going to be going after stuff - not stock.

On top of that, every single signal about the US economy points toward inflation and/or bad things. This includes the Fed's hiding of the M3 money supply, Bernanke's willingness to lower rates at a moment's notice, the Fed explicitly saying "liquidity is fine" for Bear Stearns 4 days before its collapse, or the insane debt culture most recently epitomized by this ludicrous "stimulus rebate" that's coming up here in a few months.

I could go on, but I won't - So here's the game plan:

I'm giving up on trying to figure a way out of this mess, and I'm going to focus on investing with the hope that we have a few years. I'll lay out each of my buys and sells of futures, and some blah blah blah about why I did whatever - or whatever I feel like.

So here's where I'm at so far:

DATE Quantity Price Item
Jan 30 Long - 1 91.24 Crude Oil - Dec 2016 (CLZ16)
Jan 31 Long - 1 7.889 Natural Gas - Jun 2013 (NGM13)
Feb 15 Long - 1 8.919 Natural Gas - Dec 2013 (NGZ13)
Feb 15 Long - 1 93.10 Crude Oil - Dec 2016 (CLZ16)
Feb 21 Long - 1 8.950 Natural Gas - Dec 2013 (NGZ13)
Mar 04 Short -1 1325.20 S&P 500 - Sep 2009 (SPU9)
Mar 10 Long - 1 98.25 Crude Oil - Dec 2015 (CLZ15)
Mar 12 Long - 1 101.00 Crude Oil - Dec 2015 (CLZ15)
Mar 14 Long - 1 1.5275 Euro - Jun 2009 (ECM9)


And here's what I'm thinking right now:
- I'd really like to hedge better against global inflation. Oil is good, but gold would be great. It's way up though, and I already have a bunch of gold in ETFs and mutual funds. Even so, I could get out of the ETFs and what-not and have a lot less cash tied up in gold, but still quite leveraged. Thus, I'm on the fence. But I'll be all over it if gold falls to 900 or so.
- Would like to buy some regular commodities as well. But I don't know jack about them, so I think I'll hold off until I feel a little smarter. Pork bellies and cattle (both feed and lean) seem like obvious buys. but what do i know.
- One thing I do know is that the US dollar ain't going up anytime soon. So I might as well get another Euro, or short the dollar, or something. It turns out that shorting the dollar is a the same as buying a basket of currencies, of which a little over half is the Euro. So the difference isn't that big of a difference.
- I'm thinking that the vast majority of players in this futures market are just short-term traders trying to make a quick buck, not long-term investors. In addition, I believe that longer term futures (such as the 2013 and 2015 ones I've bought) are relatively new. That is, normally, they only make futures a year or less out. Between these two, it seems like these longer-term futures are something of a new asset class, something that the academics haven't considered yet. don't know about all that, but oil is sure as hell going to cost a lot more in 5-10 years than it does now, that's for sure. And I'm willing to bet on it :)