tag:blogger.com,1999:blog-816559531110064247.post7776993741453444952..comments2024-03-08T01:03:44.522-08:00Comments on Humble Student of the Markets: Thinking bearishly, tradingly bullishlyCam Hui, CFAhttp://www.blogger.com/profile/09672203690656029787noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-816559531110064247.post-10009225009018049642011-03-01T16:47:02.907-08:002011-03-01T16:47:02.907-08:00Walt - The Inflation-Deflation Timer Model was abl...Walt - The Inflation-Deflation Timer Model was able to move into the default-free asset, i.e. US Treasuries, during the last two instances of financial crises (Lehman and Russia) before it all came tumbling down. In addition, it rotated back into risky assets as the crisis passed.<br /><br />Wimpy Investor - Last year, all commodity prices were rising while Treasury yields were falling and therefore I put on the override. In this case, the entire commodity complex is grinding upwards (but underperforming the headline gold & oil prices) while yields fall. Given the current action in commodity prices (softs down, energy and metals up) I would be inclined to watch the commodity complex and not override the Model, which I don't like to do. If they stay level, we will be at a neutral reading within a month or so.Cam Hui, CFAhttps://www.blogger.com/profile/09672203690656029787noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-57869401542538382942011-03-01T12:00:21.243-08:002011-03-01T12:00:21.243-08:00If I recall correctly, sometime in 2010, when Gold...If I recall correctly, sometime in 2010, when Gold was going up while US Treasury was also going up (lower yields), you had to over-ride the Inflation Timer Model ... I think instead of "Inflation" Reading ($CRB trending up), the "manual over-ride" made it "Neutral" Reading.<br /><br />Do you think the market action since around Feb 15, 2011 (Gold Up and Treasury Yield Down) justifies another manual override, from "Inflation" to "Neutral"?<br /><br />I'm wondering if the hedge fund world is back to "Tail Risk Hedging" -- buying both hyper-inflation (using Gold) and double-dip/deflation (using US Treasuries). What other indicators would you track to confirm that this is the beginning of another cycle similar to April-October 2010.<br /><br />Just trying to confirm or dismiss my new thesis:<br />http://diaryofawimpyinvestor.blogspot.com/2011/02/back-to-tail-risk-hedging.html<br /><br />Thanks!WimpyInvestorhttps://www.blogger.com/profile/18148362644880449393noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-8862029157986292402011-03-01T07:59:13.643-08:002011-03-01T07:59:13.643-08:00But will you be able to get out the door before ev...But will you be able to get out the door before everyone else is trying to?walthttps://www.blogger.com/profile/12582199269389313153noreply@blogger.com