Gold and Google

That's about all I own, along with cash and my oil calls until 2011. Google has risen from the dead around $275 back now over $620. Gold has obviously suffered lately as oil has risen $10 in the last 2 weeks and the continued "strong dollar" optimism is about as realistic as a jobless recovery.

2009 has been a strange year. Perhaps Black Swan author Taleb had it right in March when he said the unforeseen scenario would be for the market to go up. And perhaps Abbey Joseph Cohen, who hadn't been right about a call in 3 years, was granted the reversal switch by GS when she predicted S&P 1150 by the end of the year. Pretty close.

As for me, my belief that the markets would experience a second crash cost a wild ride back up. However, having destroyed the market last year, I was not chasing a retracement of my losses, but a way to enhance those gains.

Fortunately, I was right about 2 things. One, that when gold fell below $700 after buying in at around $860, I said buy more, a lot more. Gold eventually cracked $1,200. And, the stress tests. Buying OOM calls on stress-tested banks in retrospect, may have been an even easier call than the financial collapse of last year. Fifth-Third calls yielded a 2,000% rise in 2 weeks. The mistake I made, and hopefully the rest of you to a lesser degree, was not putting a lot more into this trade. This was not a 50/50 scenario. Geithner was never going to let these results look bad.

Heading into 2010 I advise caution. I have no conviction in this market, but a continued belief that we have done something systemically horrible by allowing banks to hoard printed cash and yieldless treasuries. I believe gold will still win out this year, and perhaps several other commodities as well. Hang tight, a lot can happen in a year as the last two have proven.

Happy New Year! I will be sure to fire up a bet against Manning when it counts signal depending on who their second round opponent is.