February 15, 2011 – Orlando Strategy Luncheon Review



1) Orlando Strategy Luncheon Review. Now is the greatest time ever to buy a Caterpillar D9 heavy bulldozer. That was my conclusion after visiting Ritchie's Auctioneers, half way between Orlando and Tampa, Florida, which offers hundreds of these giant machines, along with enough steam rollers, backhoes, road graders, and dump trucks to build a small country from scratch. They were being sold off at distressed prices, pennies on the dollar, for little more than scrap metal value. Such is the bitter fruit of the worst downturn in new home construction since the Great Depression.

Driving through the forests and swamps of Florida, one finds a land dotted with giant dinosaurs, pirate ships, wizards, and assorted oversized fruit. It's like being on an LSD trip without going through the trouble of buying and ingesting the banned psychedelic substance. The wreckage of the crash cover the state like a highly contagious plague, with boarded up homes, condos, small businesses, and tourist traps around almost every corner.

After driving through hours of strip malls and dilapidated retirement communities with weed filled golf courses and kudzu choked waterways, one wonders why anyone retires here. I have never seen so many out of state license plates. But the Southern hospitality makes it all worth it, where 'Y'all' comes across as genuine and sincere, not clichéd or stereotyped. The locals are noticeably friendlier the second you get off the plane. When they say have a nice day, they really mean it. In New York it means they intend to mug you.

Diary readers and Macro Millionaires alike flocked to Orlando's exclusive University Club en masse to the best attended strategy luncheon yet. Mark from Australia won the prize for the greatest distance traveled to the event, easily beating out the runner up from Uruguay. Spend your Zimbabwean dollars wisely, Mark.

The extended discussion revolved around the issues that we are all grappling with today in the international financial markets. Followers of this letter are now faced with a dilemma everyone wishes they had. Everything they own with great fundamentals, like commodities, energy, food, precious metals, technology, rails, and short Treasury bond plays, are up 50% or more in the past five months. But what to do with new money? (Nothing). Will there be a QE3? (No.) Are muni bonds a buy here? (Yes.) Will there be more tax cuts (No). How high will oil go? (A lot). How high will interest rates go (Even more). Is it time to buy a house yet? (Rent, don't buy). Will Obama get reelected in 2012? (Yes). Will the Tampa Bay Buccaneers win the Super Bowl next year? (Not a chance).

One gentleman told me he had tracked 200 of my recommendations over the last year and had only found two losers, premature shorts on the yen and Treasury bonds which I stopped out of quickly. All I know is that the harder I work, the luckier I get.