which has caused some reaction in various capital markets. According to a graphic on CNBC Asia, one of the missiles has a range of 3500-4500 km and could reach parts of Alaska.
Typically in the face of this type of scare US dollars rally, US treasuries rally, defense stocks do well, gold goes up and the Swiss franc might also draw some flow even if not from the US dollar.
While this is unlikely to have a lasting impact on markets it may make sense to study the reactions of different stock markets, assets classes, currencies, sectors and so on.
After 9/11 we were told to expect more attacks. I don't feel the need to devote space to how much danger the US may or may not be in at this point but certain things will go up in the face of a crisi
Today is a weird day, no question about it. Ken Lay dies, North Korea is center stage, Texas tea is back above $75, the post from this morning was muted out by the ADP report and I was hoping to watch the World Cup match that starts soon.
It doesn't feel like there is a lot fear being expressed but the VIX is up 10%.
Adam Warner doesn't seem too concerned but does not dismiss it completely either.
The market has felt
heavy for a while and today does not help. I have been urging caution and advocating a relatively defense posture for a while now, without an extreme cash position. For now most accounts are still 75%-80% invested in equities, keep in mind the market is only down a little so far and may never go down a lot.
The trades on my radar have been on my radar for a while without any action taken yet are
Trouble 'round The Dinner Table? at 2006-07-09 19:47:55
Here is an amusing note, my older brother Larry has thrown his hat into the blogosphere in the last few days. The site is called
Millionaire-Now.
He has come out of the gate fast and furious with some good content covering CEFs, metals, portfolio composition and real estate. Larry has been in the business off and on for quite a while, knows a fair bit and it comes across in the writing. He also draws on opinion and expertise from a lot of other folks for the posts he has put up so far.
Perhaps we can have some sibling rivalry. Mom likes his site better, dad mine. Larry runs faster but I can bench press more weight. Ha ha ha.
Maybe, Maybe Not at 2006-07-09 19:47:55
A reader left the following question/comment;
If we are looking to play defense against a falling market does the casual link works like this:
rising oil = inflation = rising rates = faltering stock market
If the above holds then I would think a defensive position should be in oil companies with proven reserves.
As part of a defensive strategy sure but yesterday oil was up, the market was down and so were a lot of energy stocks. This corrected some toward the end of the day but the sector may not work perfectly in the role of defense.
Looking at just one day is not exactly right of course. If oil goes higher or just stays where it is it creates some measure of headwind for the economy, perhaps not deathblow,
