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October 10, 2005

Balanced Fund of Funds #2, Mon., Oct. 10, 2005, 10:05 AM

TSX closed, so I did not/could not buy XGD (Canadian goldminer shares index)

Bought IYH 60.54 (iShares Dow Jones U.S. Healthcare)
Sold EWH 13.03 (iShares Mcsi Hong Kong ETF)

Paired trade

Perspective: broadly bearish

Mr. Joe in Beijing (Zhou Xiaochuan, Governor, People's Bank of China, and Chairman, PBC Monetary Policy Committee) holds the keys to Hong Kong, and I don't think he's going to allow inflation to steal his prime beef Special Administrative Region.

U.S. healthcare is a story of sustainable cash flow during a period of economic problems. That's another way of saying, you stick with a ringing cash register whenever consumers are nervous. Economic and financial worries always drive people to being either over-medicated or boozed up. Choose your poison.

You'll note that I'm long Healthcare and Consumer Staples, which are defensive plays, and short Hong Kong and U.S. Telco's, both of which went into this bear cycle in super-aggressive mode.

Even Donald Trump has been more cautious this time around. You'll note that he's doing major projects in Las Vegas and Dubai on somebody else's dime!

I had thought I might go long XLE here, with the assumption that $61-62 crude oil might hold (and it may), but if oil drops to $55/barrel, there will be another ratcheting down of energy industry share prices similar to what happened last week. I think IYH is the safer bet.

Posted by Posted by Bill Cara on October 10, 2005 10:07:50 AM | Category: Portfolio - Balanced Fund of Funds