Europe’s QE, as announced, is going to be 60 billion Euros per month for 18 months – that’s over $1 trillion US and about 10% of GDP in Europe – i.e., this is a significant level of money printing. Based on the US experience we can expect that lots of this fiat money will end up in the equity markets. Allocating some money to European stocks is worth considering. ETFs like FEZ (Euro STOXX 50) and IEV (iShares Europe) give us an easy way to gain exposure to the European markets.
Copper’s history goes back to at least 8000 B.C. when it was first used for coins. Around 5500 B.C. copper tools helped humans emerge from the Stone Age. In today’s society copper is used in building construction, power generation and transmission, transportation, plumbing, heating and cooling systems, electronics and telecommunications. The car you drive has between 45 and 100 pounds of copper depending on its size and whether it is a hybrid or not.
In the August 10 letter we talked about adjusting our trading rules as our market bias changes. When our perception of the market turns more bearish we can tighten the stops on our existing bullish positions, take partial profits, lower our profit targets or exit the markets all together. Discretionary traders may make these adjustments using intuition while rules-based traders will have pre-determined guidelines to follow.