Recently, my daughters left for a mini vacation leaving me at peace with myself. Upon their return, everything I said or did became outdated. How can things I have been accustomed to doing in my fifty-plus years, all of a sudden be wrong?  I can’t even play my own playlist without being criticized about it. Yes, I love 70’s Rock as well as a mixture of all genres of music. I even enjoy the music of Englebert Humperdinck which brings back the memory of watching my parents dancing at weddings while I guzzled soda pop and then ended up falling asleep under a table. I would be carried out only when they were ready to leave, then miraculously I would wake up in my own bed. One thing is for sure, if I was at a wedding today and hid under a table, I would probably be kicked out or arrested. 

When we look at markets whereby some cataclysmic event occurs there are always sharks patrolling the waters. Ready and willing to take advantage and pounce on the opportunity. Here are a few instances where one man’s junk became another man’s gold.

• The Russian Ruble plummets to record lows when Ukraine hostilities arise, sanctions are imposed, with absolutely no effect and the Currency turns out to be the best performing investment of the year. Of course, only the American Private Bankers were allowed to trade it.
• Negative Oil Prices, With a new Administration and Green Revolution in the works, the notion that Oil would no longer be relevant caused the price to plummet. The Saudi Prince states that Oil will never hit $100/barrel again! Investors started unloading shares and keep in mind, that for every seller there is a buyer. Recently we saw Oil hit $120/ barrel and the price at the pump from $2/gallon or $0.49 cents a litre, jumps to $7/gallon or $2.50/litre. Some of the Oil stocks people discarded rose 10 times or more in value. Somebody is making money are you starting to see the light?

• Remember Quebec Separation from Canada? Talking about a Province wanting its’ cake and eating it too! They wanted to be separate but maintain the same monetary system, pension plan as well as territory. A mess to say the least but it did cause a massive devaluation in the currency. The all-time low for the Cad$ hit an inter-bank level of $0.69 cents or 1.45 level. Oh, how subliminal could that have been?  At one point, I heard of people so desperate to leave Quebec they were offered $0.50  or $2 cad$ to buy $1 USD at the border. That was then, not until the Sub-Prime Mortgage fiasco in 2007/2008 did we see the Cad$ hit $1.10/Cad actually worth more than the USD. Those with time and patience saw Cad$ drop to 0.76 cents or $1.31/USD a huge reversal and it happened twice within the year, back and forth. I will never forget the words, “This is what separates the Men from the Boys”. I realized then I was only a boy in a Man’s world.

My point is that where there is fire, there is opportunity. If we look at the present state of affairs, the talk is all about Inflation. With all the other distractions occurring around us, the Markets are focused on the Federal Reserve and their next move in interest rates. Meanwhile, the USD Index recently renewed its explosiveness above the 109.0 level. Consequently, the Euro has taken a beating, there is an issue with energy shortages causing real disruptions in their manufacturing base. The Americans wage war to protect what? Secrets while people are actually suffering. Regardless, in reality the Euro has been under extreme pressure, sliding tremendously vs the USD.  Is this an opportunity to buy Euro in the midst of turmoil? It could be because once the markets realize that the interest rate hikes are hurting the economy rather than helping it, the USD will be in for a massive reversal. Note, this is only my personal opinion but history always has a tendency of repeating itself. Time will always be a function of reality.

Lastly, the price of Oil rebounds to test the $95/barrel level. After Durable Goods Orders remained relatively unchanged at $273.5 Billion in July, Pending Home Sales fell 1% but the silver lining is that expectations were for a drop of <-4%> in July.  The Cad$ recaptures the 0.77 cent level as Precious Metals also are starting to recoup. Gold is around the $1750/oz level and Silver above the $19/oz level.  I admire the skill of certain managers that base their decisions on historical data and ranges by incorporating Forward Contracts to manage their payables and receivables.  History should always be used as a barometer for the future as long as variables remain consistent. Call me direct any time and let’s talk Turkey!

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