I have a day at home, merely peeked at last week's action, and just have a few minutes ...

At the Hurghada airport last night I tallied the outbound flights.  The big winner was Russia with almost half the flights, FWIW.

Pop quiz: Guess the price of gas in Egypt:

a) $.15 per liter   b) $.50 per liter   c) $1.50 per liter   d) $3.00 per liter

I see that our long global growth / short US financials & retail was a winner again last week.  So, I did well.  But, what's one week?

I read El-Erian's book and then studied it.  Everyone now knows his ideas on asset allocation in our changing world; no reason to rehash them here.   On some things he has a clear opinion, on others a less clear opinion.  He thinks the US Dollar is in a long-term downtrend and doesn't pull any punches saying it.  On the US markets, he doesn't know if the continuation will be a "V", a "U", a "W", or (like Japan?) a "L". There's an entire chapter on risk management that may be the most important in the book. 

One big takeaway for me was how he is willing to act with conviction.  For example, while managing the EM bond desk, he made a call that Argentina would default.  Many other porfolio / fund managers reasoned that since the EM bond index was something like 18% Argentina, a reduction to, say, 14% might make sense.  El-Erian thought that 0% made sense.  This kind of "act with conviction" thinking may apply now.

I see that the Dow really managed some big-time technical damage.  There's a chart HERE.  It looks 10,750 represents very strong support.  The S&P, on the other hand, is finally retesting the Jan / Mar lows.  Ugh.

So, who expects the Jan / Mar lows to break and what are you doing about it?  Who is upping shorts now?  Who is taking profits on shorts?  On Monday evening I'll have a chance to make adjustments, if any, and try to post something intelligent.  "Lying low" with cash, a continued long-short strategy ... that's all I'm doing.

The pop quiz correct answer is "a".  The average monthly salary in Egypt is about 60 €.  I tip heavily when the service is good.

More next week, I hope.