Thank God - it is nearly over!

2010 will not be remembered fondly by many - especially those in the financial industry.

Although Stock Markets are ending the year on a high, there is little cheer to be found elsewhere. Bond yields are still way too low in many cases (with a few notable exceptions on the Corporate Bond side of things), deposit rates are effectively zero - and all this is happening as inflation is most definitely raising its ugly head once more.

I am deeply frustrated in that my model derivative portfolio is up 99.4% on the year - I would have sold my first-born into slavery to have got that 100% figure dammit! Interestingly, about 70% of the positions have been quite bearish. It is a testament to volatility that such success was achieved in a rising market.

The cash required to margin these positions was held primarily in Corporate Bonds and Bank "must pay" Preference Shares, with around 30% in cash at any time.

My only stock position of size to be held throughout the year was Indigovision (IND.L), which I still think is going to triple at least from here. In terms of trading, my biggest position was in BP which was bought heavily around 335-360p. as the market reacted to the iniquitous and unfair way in which Obama looked for any way of distracting his fellow morons from his failure. A nice quick 20% turn there.

If anyone wants details,  please feel free to ask.

Next year? Avoid the US $ and US investments like the plague. If the debt chickens come home to roost - and China. not the US government has the keys - then we could see a major problem. Not more than a possibility - and one that would possibly take European markets some of the way with it - but one to be VERY cautious over.  I fear we have a maximum of 200 points on FTSE to go, and with 500 points of "Noise" (see my thoughts on "Crevasse Investing" in an earlier blog) entirely possible, I will probably continue to play the main derivative element of my model portfolio from the short side.

More likely predictions are that by the early hours of the New Year I will see many Black Swans.
I will also most likely be seeing Pink Elephants, Green Hippos and Flying Pigs.

A Happy and Prosperous New Year to you all

Dum Spiro Spero (for the year ahead Dum Spiro Sperabo)