Risk of - theme is now in place, and we have tried to look at the most likely path for balance of 2009.
We remain firmly in the camp of: 2009 will be ok investment year: We expect S&P to be 10-15% positive going into 2010. This should not be understood as if we are in the "everything is fine" camp, rather we respect two major imputs:
- The move from safe haven investment yielding below 1.00% for retail investors will lead to higher participation in stock market + still too many fund managers behind their allocation model ==> For every 5% down there will be new net buyers.
- The poltical need for a good 2009. Obama almost gave up on public financed healthcare this weekend - his domestic agenda increasingly under pressure and the Republicans feels stronger. Political input remains biggest risk day by day.
CHART 1: Our main scenario (Disclaimer: We do not for one second believe we know the moves ahead, but any good investor must have EXPECTED profile as benchmark to trade against or with)
Short S&P, EURUSD, USDJPY, long FI... Long DBA
Took profit: Short Denmark & Crude (wrongly for now)