Markets and EU analysis: The hardest trade right now?

Saving is a fine thing. Especially when your parents have done it for you. – Winston Churchill

The markets are trying to rally this morning, but all eyes are still on the Euro crisis, in which the discussion seems to now finally be turning towards a currency debate, rather than a sovereign debt/banking crisis debate. More control over a sovereign fiat currency is probably the end game for each of the member EU nations. That doesn’t mean the Euro is going away — but that it will likely become a currency that’s mostly used for inter-country trade and not for the daily use of money inside each nation. The destruction of the Euro will likely take much longer than any of the suddenly “Hey, the EU is going to collapse, so get short the Euro” predict.

Here’s something I was writing about the coming Euro crisis a couple years ago (italics are new):

Revolution Investing: Why you should be buying into this panic

I’m thinking we might be seeing a blow-off top in the “fiscal crisis concerns” market, and I think the key to making money here is keeping your cool and to get longer into weakness below DJIA 9850. Cover some shorts (we’re covering one short that’s been a big winner for us already in the portfolio today) and start scaling into some longs and even some calls in the best names that you’ve got in your portfolio.

Even after the recent sell-offs and newfound panic over the EU-crisis, the DJIA is up nearly 30% since that panic. I could be wrong, but I continue to think that we’ll likely see these markets up a bunch from these levels in a couple/three years when this current batch of newfound panic over the EU-crisis plays itself out.

Here’s a few other thoughts of mine from EU crises past that outline what at the time was some very contrarian thinking, but is now, as the crises have continued as I’d predicted, a lot more mainstream:

Let the Euro die and the bull market resume

What if the “worst-case scenario” is actually the best-case scenario?

I’ve got all your questions from yesterday downloaded to my computer and I’ll be answering them offline and then emailing them to my staff to get up on the site ASAP. The lack of broadband and spotty Internet connections out here in Alto, NM right now remind me of using AOL to log into my Ameritrade account to buy Network Solutions for my personal account from Borough Park, Brooklyn back in the late 1990s.

As you’ll hear me remind you often — don’t force any trades. The hardest trade to make is often the right one and right now, just sitting tight after having scaled into more long exposure recently, seems to be pretty hard to do for most traders. Patience for now.