Although it did bounce. A little.
From The Macro Tourist, September 8:
Trading is difficult. If anyone tells you differently, they are either new (and haven’t been hurt yet), or just plain stupid. You are competing in the greatest game out there, against some of the smartest people on the planet.
Even when you do your analysis and get the call right, it is no guarantee you will make money. The Market Gods have a way of making sure that being right is way easier than stuffing dough in your pocket.
The perfect example of this is my call from early in summer regarding China. In May, Moody’s downgraded China, and everyone got their knickers in a knot predicting the collapse of the world’s largest economy. The guru type hedge fund media outlets were filled with grim forecasts of a spiraling 2008 type crisis. These hedge fund managers sure sounded smart, and they all definitely have a lot more money than me, so I was a little timid when I wrote a piece called China Downgrade- Buy the news?.
The gist of my argument was that China would stimulate to make sure their economy was humming along when the hugely important 19th National Congress of the Communist Party was held this Autumn. Proving that a stopped clock is right twice a day, I managed to get this one right.
The trouble was, I didn’t buy the right stuff. I should have loaded up on copper and the other China centric commodities.
Have a look at the copper chart.
China was downgraded, and then copper ran like it stole something.
Same deal with iron ore....
... There is no doubt China put the gas pedal down this summer, and it affected capital markets throughout the world.
None more so than the Chinese Yuan. Although most hedgies were all betting on a massive decline, the Yuan has been strengthening like Lance Armstrong after visiting his bio-chemist....MUCH MORE
