Investment Flash: Is the U.S. Dollar
Going To Fall Off The Cliff?
By
Paul Lamont
April
25, 2007
Financial markets trade on future
expectations. At turning points, the majority of investors position themselves on
the wrong side of the trade. Simply put, on each side of the trade it’s either
money or numbers. We position ourselves with money and against numbers. For
example, days after Hurricane Katrina had hit the U.S., the belief that crude oil
could only go higher was widespread. In fact, on Sept 7th, 2005 96% of advisors and analysts surveyed by
CONSENSUS, Inc. were bullish on oil (chart below). Or simply put, big numbers
were betting against big money. And what happened? The crude price subsequently
fell 20%. Big money won.
With pessimistic sentiment at a similar widespread extreme
(92%) towards the U.S. dollar, it is highly probably that a turn is near. With
a large percentage of investors positioned for a continued fall in the U.S.
dollar, what is the wise way to be positioned?
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Copyright ©2007 Lamont
Trading Advisors, Inc. Paul J. Lamont is President of Lamont Trading
Advisors, Inc., a registered investment advisor in the State of