Macro Investor Volume 1, Number 7

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Macro Investor Vol 1, No 7. is now available at the website and in PDF.

Has a dog Buddha-nature?
This is the most serious question of all.
If you say yes or no,
You lose your own Buddha-nature.

The above riddle is the first in the Gateless Gate, a collection of zen koans published in Japan before the war and later popularised in English as one of the most infuriating philosophical questions of all time. The market is also, to many, infuriating in its self-contradictory nature. To some it’s bullish, to others it’s bearish; to one person it’s volatile, to another it’s flat lining; to him it’s a jumbled mess of human emotion, to her it’s three pounds of flax.

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We could go on, but back in the land of relativity and measurable things there are ways to unwrap the riddle from the enigma and find clarity in the markets and to do so you don’t need to spend seven years meditating on a mountain chanting the lotus sutra. If you adopt timeframes to your thinking it is possible to be both bullish and bearish and if you adapt risk management to your investment it is easy to go both long and short. After all, investing isn’t about being right, it’s about making money and the sooner you realise this the more money you will make.

This week we look at bearish strategies and bullish tactics, as well as:

  • macro and technical assessments of the widening gulf between economic prospects and market ebullience
  • stock analysis of Rio Tinto, Australian Agricultural Company, AMA Group and Computershare
  • long/short trade ideas on Australian housing and small banks
  • international property price comparisons for Australia versus the wider English-speaking world
  • a look at the best way to play government bonds
  • what it takes to trade forex
And here are the model porfolios to Friday:

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.