Our Investment Rationale follows from our views of the banking system and our concerns over monetary inflation and the exponential rise of federal debt.

We see the central bank having to keep interest rates low and having to provide more and more fiat money to keep the system from imploding. The dynamics resemble the later stages of a drug addiction, in which the addict needs higher and higher dosages in order to function.  In our view, we see the banking system now entering this phase.

We see this phase as our current investment environment – a phase that has a high degree of moral hazard, in which we might expect continuing inflation of the money supply, higher asset prices and high volatility.

 

To capitalize on this environment, or, if you prefer, to protect us from its effects, we employ trend-following, risk-control and diversification within our long-only commodity futures trading strategy.

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• We track all commodity groups including precious metals, industrials, energy, grains, softs  and meats.

• We do not try to analyze or understand particular markets, or to make specific predictions.

• We wait for an up-trend to develop before entering a position.

• Upon entry, we place a protective stop to limit the original entry risk.

• We employ the original entry stop to compute our initial position size.

• If the market turns down, we stop out and wait for another opportunity.

• If the market continues higher we gradually raise our stops and allow profits to run.

• We diversify to minimize risk exposure in any one market.

• We only trade highly liquid futures markets.

 

Please feel free to contact us for more information, or to share your views with us.