Well, well, well, there is nothing really to do but sigh. Crimeans votes to join Russia. They seem to be glad to back in Russia’s arms. After all, they say, they are ethnic Russians. Crimea was part of Russia and only given to Ukraine back in the 1950s.If there is anybody not happy about this, it’s the US. And they are thought to be “intruders” in this issue since they are geographically so far off. But not to forget that the US considers itself a world superpower and defender of democracy. They are threatening to use sanctions against Russia, and so it follows that the financial markets — and I keep repeating that they are interrelated — is on a wild ride for a while now. Last week saw the gains, and these are record gains for US stocks for 2014 – erased in a matter of days.
Fortunately, and I say this feeling very lucky — I am out of my stock for more than 1 week now. I have an exit that I use that really worked for me this time. It’s a psychological exit — since my 3 kids had exams last week and I wanted to focus on their exams, I planned to only kept one small trade, which is to gain at the downside (put option strategy). I also have a time exit because I am realigning my trading positions. I wanted to be out by mid-March, because it is end of the quarter anyway and market moving usually sideways. Realigning means I am putting less in one stock / asset class where I used to put a lot and also taking up new ones.
Anyway, back to Crimea, this is a potential bomb — because there’s economic sanctions being talked about. Russia is the number one supplier of oil and gas to Germany, the number 1 economy in the EU. Many are speculating that this time around, these sanctions (like what was done to Iran) are not going to bite. More the other way around because with higher gas / oil prices or lack of supply, it’s going to burden households, (less money for other “goodies” — and we don’t want that! ) Oil and Gold are however benefitting from this, so resource sector is good to look at right now. * Mar 18 update – both oil and gold are down, following the Crimea vote with “risk premium” reduced. I think this is going Putin’s way …. keep watching.
In any case, don’t get in on the resource sector without your own Risk-Reward scenarios planned out. Russia could still get a bit of a whack from the other powers EU / US. We have seen the market fall last week due to this, and with the Crimea vote, it would be hard to imagine that the financial markets will “reward” this. But who knows, don’t like uncertainty, and are not necessarily political. (Putin vs Obama — this is going to be interesting!) The US and EU might not like the Russians, but Crimeans – they like the Russians.
I’m entering a trade to buy — but not yet — the price is still 50c from the Support and I’m still looking to lower my risk with confirmation from the market. And we tackle these concepts at the Low-Risk, High-Reward Stock Investing Workshop workshop happening :
— March 22, 2014 SMX, SM Aura Manila, Philippines
— April 21 Sydney, Australia
— April 22 Singapore
http://money.cnn.com/2014/03/15/news/economy/russia-crimea-economy/index.html?iid=HP_LN&hpt=hp_t1
http://money.cnn.com/2014/03/04/news/economy/europe-russia-ukraine/index.html?iid=EL
http://www.bloomberg.com/news/2014-03-16/wti-crude-gains-a-third-day-after-crimea-vote-brent-increases.html
http://www.bloomberg.com/news/2014-03-16/china-plans-over-163-billion-shantytown-investment-cctv-says.html
http://www.bloomberg.com/news/2014-03-16/putin-no-mad-man-to-russians-as-power-play-trumps-economic-risk.html
