Thursday, September 02nd, 2010

Obama’s got it right

Posted on: Dec 2nd, 2009 | By Andrew Snyder | Filed under Notes From the Investment Underground

Baltimore — (TFN): With a sick, pregnant wife, it is tough to get a good night’s sleep. Between the coughing, the sneezing, the nose blowing and the five-times-a-night bathroom visits, there’s not a lot of time for rapid eye movement.

That’s okay. It gives me plenty of time to stare at the ceiling and think.

Last night, on the heels of Obama’s speech, I had a lot on my mind. While talking about the military struggles in Afghanistan, the 11-month president looked very “Bushish.” Whether you find that a good quality or not, is up to you.

But Obama’s mention of the nation’s resolve, or lack thereof, struck me. He mentioned the fact that after 9/11 the country was fully united. Yet today, we could not be further apart.

It’s the first time Obama and I have agreed in a long time. (Maybe I’m getting what my wife has.)

Unless this country can get together and put partisan maneuvering aside, we’ll never move forward.  That includes economically.

Resolve is a word rarely used by investors, but it’s one that should be in our vernacular. Without it, we have no long-term strategy and, to borrow an overly popular term, we have no exit strategy.

Sure, when I first got into this industry, politics played a large role in Wall Street’s day-to-day maneuvers. But it was nothing like today, a market where Washington can create red or black with the stroke of a pen.

Investors don’t need a degree in finance. They need to spend four years studying political science. That’s not good.

I don’t agree with Obama too often, but when he calls for increased resolve, I’ll follow. But all I represent is one vote. For real action, all of us need to stand behind the notion of fixing this country and strengthening our once-fierce might.

At any point, but more critically than ever, the direction of the Dow is far more important than the direction of Obama’s approval rating. Until we get Congress to vote for what’s good for the country instead of what’s good for the party, my view of the economy is bearish.

And it’s getting worse every day.

There is no denying we all want to get rich. There’s no lack of ambition or will in that department. But until this country finds the resolve to work together and put political differences aside, our economy is going nowhere.

*** We have aptly proved the value of shorting the American economy over at TFN Strategic Trader.

Earlier today, we sold three more positions for yet another cluster of double-digit gains. Out of the three options plays, two were put contracts that soared as the value of natural gas plummeted and another was call contracts that surged as the world turned its back on America’s economy and fled to Asian growth opportunities.

In all, we locked in gains of 33%, 55% and 50%. Even better another set of put contracts is currently worth gains of 300%.

It’s all thanks to the natural gas markets.

I recommended some selling today because tomorrow is likely to be a pivotal day for the industry. November is typically the first moth to see a drawdown in the nation’s gas stockpile. So far, we haven’t seen it.

Even with storage capacity at 99.9%, the nation’s gas producers continued to put more into storage facilities than the nation’s users could pull out.

But tomorrow, that is likely to change. If the week’s inventory report shows a drawdown, a skittish market is likely to send gas prices higher, at least temporarily. With options, that means we’ll be exposed to the detrimental effects of time decay.

So we sold today with the hopes of “resetting” our entry prices even lower in the near future.

You can either get in on the action here, or you can read about our gains in the next couple of weeks. Your choice.

*** Finally, it’s a good day for corporate executives and a horrid day for organized labor. Down at the local Harley Davidson plant, the union voted to ratify its latest seven-year contract with a 1,587-to-193 vote.

The new contract will most likely force Harley to call off the dogs and cancel its plans to move the plant to Kentucky, but it also cuts nearly 1,000 jobs and forces the union to take serious concessions.

Now workers will actually have to show up and work.

Even when the pendulum is swinging towards socialism, there are signs of capitalism at work. Doesn’t it make you feel good?

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About the Author

Andrew Snyder is Editor of Taipan's Strategic Trader blog and regular contributor to Taipan's Tipping Point Alert. Andy's first year in the world of finance and investing involved learning the intricate details of the financial industry as an advisor. He specialized in handling the vast portfolios of very wealthy clients, where he excelled at making them even wealthier. Since then Andy has received his Master's Degree in Business Administration, has had an award-winning book published and has been featured in numerous publications. With his background in research, his hedge fund-style education and knowledge of the market, Andy is acclaimed for his no-nonsense style of writing and his sharp, deep-thinking market research analysis. His goal is to use his knack for Wall Street research and analysis to lead his readers to breaking short-term investment opportunities.

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