Wednesday, May 16, 2012

As Price Falls..

- What We Don't Know -
The Greece impasse and pending exit from the Euro have contributed to the macro-uncertainty - and this uncertainty is certainly putting in a large dent into my equity related exposures.

- What we know -
Some U.S economics - confidence is rising in both spending and housing, low inflation rates, stimulatory govt (and this is election year - expect some sort of QE3 next month), and ISMs staying above 50 and establishing a positive trend.

- What will resolve -
At some point Greece will form govt. and we will see a rally - however if the Greece govt falls out of the euro - we would expect continued weakness in risk prices.
However, the longer term prospects are still bullish for the rest of the year, and I would not be heavily short this move downwards.

As for gold and silver - I think the recovery in this asset classes could potential be violent if QE3 is introduced; should be positioning over the next few weeks.

The IPO for FB is coming up - and priced at about 18bn - ZYNGA is a good proxy for this play as it has been sold off hard in recent weeks - I expect at the bare minimum a push higher post FB 20% to the upside.