Everyone loves a good funeral, no? The dollar, as you know it, is about to get its lights punched out, for good. The daily dips of 0.5% will soon be replaced with 2-3% drops, all thanks and praise to the Federal Reserve and Executive branch for such gifts of fiat.
To hedge your wallet, once again, you should be long basic material stocks. Names like BHP Billiton Limited (ADR) (BHP: 73.54 +0.77%) , (VALE: 26.92 +1.78%) , Southwestern Energy Company (SWN: 48.70 -1.54%) , Arena Resources, Inc. (ARD: 43.45 +1.45%) , Suncor Energy Inc. (USA) (SU: 37.91 -0.11%) , POSCO (ADR) (PKX: 115.95 +0.62%) , Allegheny Technologies Incorporated (ATI: 34.84 -8.29%) etc, can be bought in size. Howsoever, when I say “size,” I do not mean right away. Only idiots buy everything at once. Measure your buys over a period of time. There is no rush to own anything. The likelihood of you hitting a homerun is far less than you striking out.
With commodities running higher, it’s only a matter of time before the shippers respond in kind. Names like Genco Shipping & Trading Limited (GNK: 22.70 +0.22%) , TBS International Limited (TBSI: 9.54 -0.73%) , DryShips Inc. (DRYS: 7.13 -3.26%) and Diana Shipping Inc. (DSX: 15.02 +0.20%) can be owned as well.
Truth be told, I am not buying anything. Into this rally, I will lighten up, in order to build my cash position back up to 25%. Selling is a process too, by the way.
In short, as long as the dollar (UUP: 22.33 -0.58%) is weak, equities are free to run with the wind. If you are short stocks, you are in for a very arduous Halloween.
Top picks: Equinix, Inc. (EQIX: 97.71 -0.49%) , Sociedad Quimica y Minera (ADR) (SQM: 38.77 -0.51%) and Guess?, Inc. (GES: 38.17 -2.35%)
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