|
images/pit_2.jpg A View from the Pit has been written by Tom Reavis for his customers for almost 35 years. Articles are written about twice a month depending on activity in the market. These are strictly the views of Mr Reavis and are not intended as an offer to buy or sell commodity futures contracts.
A View from the Pit
In Publication since 1976
One of the reasons for the tremendous success of the Survival Plan has been the fact that the over whelming majority of our clients put 1/3 of their margin money in gold. It is held in the customers account in a Chicago Mercantile Exchange approved bank depository. The value of gold has increased from under $700 an ounce in 2007 to over $1900 an ounce in August of 2011. At Worldwide Futures Systems we feel that we will see continued debasement of paper currencies in the months and years to come. Sovereign nations will print more and more money to inflate their way out of entitlement programs that they can't pay for. Holding part of your investment money in "hard currency" makes sense.
No market goes in a straight line and holding long term positions occasionally means that there will be significant draw downs. September is an example as a sharp drop in gold prices cost the Survival Plan 7%.
Gold Chart
One of the things that we really like about the Survival Plan is the diversification. We went short a December Copper contract when a slow down in global economic activity decreased demand for copper, a metal heavily used in construction. In particular, Chinese demand for copper was significantly lower than expectations. The short position in copper was closed out for a gain of $9,412. This was the only trade for the Diversified Commodity Basket in September.
Copper Chart
The Currency Basket (CB) was faced with the challenge of picking up trends, amid constant governmental interventions intended to reverse such market trends. Notably, the Swiss Franc was pegged to the Euro. Going forward, the Swiss will not let the Franc appreciate to more than 1.2 of the value of the Euro. The CB had three Euro trades in the month of September (two short and one long), netting +$125. Unfortunately, with the interventions by the Swiss and Japanese governments, the program had a net loss of -$2,812.50.
The S&P e-mini trading program, Condor, took advantage of the wider daily ranges in the S&P market and captured a +624.74 return.
In composite, the Survival Plan saw a return of +0.24% for the month. Not good but considering that the S&P index lost -7.1% for the month, the Survival Plan did comparatively quite well.
An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources, and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. |
.jpg)
