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    Sunday, February 03, 2008


    2008 February – December Predictions

    1. NASDAQ will see another major fall off a higher peak. QQQQs see less than 40 (buy puts on QQQQ especially as it heads higher)
    2. Junk bond spreads widen substantially (buy puts on JNK)
    3. Japanese yen appreciates against a basket of currencies but especially against the Euro (and maybe GBP) (long JPYEUR)
    4. Sugar and cotton substantially outperform NASDAQ or S&P 500 (SUGA.L COTN.L)
    5. Gold and Silver end the year up from here (calls or futures contracts in GLD and SLV)
    6. The banking index falls even more from here and banks keep announcing new write downs every quarter (buy puts on BKX RKH)
    7. Prestige named banks and the major few monoline insurers are able to access capital and do not go bankrupt (buy calls on MBIA)
    8. Japanese small caps substantially outperform NASDAQ or S&P 500 especially in USD (JOF JSC)
    9. I continue to believe that my core holdings of Canadian Oil Sands, Northern Dynasty, Strathmore, Fission and Silver Standard will do very well over the next few years. I’d add on weakness, especially Northern Dynasty. I don’t know what will happen over the next year except that you should be prepared to take advantage of buying opportunities in these names.

    If you have to own larger cap or well known stocks then Archer Daniels Midland and Conagra are statistically cheap with good dividends (1% and 3.5%). They will benefit from the agriculture boom and will perform well over the next year. (Though not better than the core holdings over multiple years). BHP, Xtrata and Rio Tinto are other blue chip opportunities to add to on weakness that will perform well over the coming years.

    I would allocate about 5% of your portfolio to 1-7. As you can see they are all leveraged ideas which should help to balance out short term underperformance in your core holdings.
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    Disclaimer and Disclosure Analyses are prepared from sources and data believed to be reliable, but no representation is made as to their accuracy or completeness. I am not paid by covered companies. Strategies or ideas are presented for informational purposes and should not be used as a basis for any financial decisions.
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