Grazing Rites

Monday: Dow drops 504 points. Tuesday: Regains 141 points. Today: dropped 449 points. So for the first 3 days of the week the net is down 812 points.

You probably won’t see that number as it would scare the crap out of people and things would only get worse. So why am I throwing it out there? Well for one I’m curious, secondly I like to know what’s going on, and thirdly one can’t help but think of Rule of Acquisition #167 “Even in the worst of times, someone turns a profit”.

In ideal terms that would mean it might be a good time to buy a stock at an all-time low, then wait for January and watch it skyrocket. Unfortunately I have neither the experience nor access to do so much less the disposable income and willingness to risk what I have.

In fact it’s exactly those things that have insulated me from the problem as I invest very conservatively. As Hanok said, “only a fool would risk losing what he has”, which is ironic because he was arguing with a Ferengi at the time! Whatever, as Walt Whitman said, “Do I contradict myself? Very well then I contradict myself; I am large, I contain multitudes.”

But I do think the ideal time to buy American currency may be on the horizon. I watched the currency market carefully today. From 9am to 11am the Canadian dollar fell slowly, then starting at 11am it took off and finished well above where it started the day (all times EST).

I left instructions with my financial advisor (my son calls her “nana”) that when the purchasing price of US currency hits 1.0357 Canadian or lower to start buying.

That’s right, if things go as I predict then I’m getting back into currency speculation. For one thing I need US money for my trip to Vegas in November but if we hit parity or better prior to November 4th I might just buy some purely for speculation’s sake because I believe three things…
1) Things are going to get worse before they get better, just look at who’s in the White House
2) Obama is going to win on November 4th
3) Once Obama wins, or perhaps not until he’s sworn in or shortly thereafter, many more people are going to seriously look at everything he’s said he’ll do and all of his plans and they, like I, will see that they’re smart, innovative, and likely to be highly effective. Investor confidence will be bolstered domestically and abroad and the American economy and dollar will begin a significant recovery
I believe in Obama enough to put some money on it. And if you buy when things are cheap and just wait for a return to normalcy or even better days and then sell well, that’s the basics of making a profit in any market.

Let’s take a look at some specific plans I have faith in.

Obama wants to make a commitment to new, green, renewable energy sources. A pillar of that plan is wind energy. He plans to put American steelworkers back to work for a decade creating an assload of windmills and all the while offer retraining in new more sustainable industries for those workers. That one plan alone could be enough to put the economy back on track – the steel industry pretty much held up the American economy once, it can do so again. Plus the retraining means that once the big production push is over those workers will still be competitive in a global economy and some will remain in the industry to maintain those windmills, build replacements, and if the technology is compelling enough perhaps have some serious exports to green-leaning nations like Canada.

Obama wants to give a $4,000 a year tuition credit to students who serve their communities – I believe this will result in higher productivity and a more motivated, educated, and experienced workforce.

Obama wants healthcare for pretty much everyone – a healthy worker is a productive worker and preventative affordable healthcare will save money in the long run as early care is generally much cheaper and more effective than emergency care once a disease or injury goes untreated.

There you have it, 3 strong pillars to create, support, and maintain a swift, strong, sustainable economic recovery.

Wants so wrong about wanting to make a few bucks off of it?

It won’t be my first adventure in currency speculation either. Back when Bill Clinton was facing impeachment the then incredibly strong and resilient American dollar was on a rare decline. I looked into the articles of impeachment and had paid close attention to Bill since his run for the White House began and I knew it wouldn’t stick. I also knew that once the verdict was in the American dollar would jump slightly. I was still in school at the time so clearly my means were modest but just by buying when confidence was low and then selling shortly after the acquittal I made something like $150 which I then used to take my friends to the fair, with the help of my employee discount. $150 just for moving money around for a month.

And here’s the safety as I see it. What if the impossible happens and McCain wins? As I (and many others) see it he’s waging a defensive war on the economy. What that means is he can’t really win on a weak dollar, so the recovery has to begin BEFORE the election in order for him to win and if that’s the case then you just sell in November instead of January or February and still make a profit.

It’s not fool-proof and I haven’t committed to anything yet beyond my Vegas walking around money ($500 - $700) but rest assured I’ll be thinking long and hard about it once that threshold of 1.0357 has been reached (enough to buy $700 American for less than $725 Canadian). And if we hit parity it’s nearly a foregone conclusion I’ll be buying some assuming I have funds available. If things go down as I hope perhaps I can earn enough to take the family on vacation or something, packages to Mexico in late January seem quite reasonable these days.

Oh, wait, aren’t we supposed to be in economic turmoil?

This entry was posted on September 17, 2008 at 3:57 pm and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.