Loch Ness Monster Sighted

I have made no secret of my scorn of the news as a guide in guessing what will happen in the markets. But is my cynicism misguided? With days to go before the Scottish referendum and the first signs that the vote for a separation might be going the way of independence seekers the headlines scream that the pound is collapsing in value.

Indeed the pound has fallen by an eyewatering four and a half percent against the dollar in the past three months. But consider the following table

Percentage currency movements against the US Dollar
	3 month	6 month
GBPound	-4.50	-3.50
Euro	-5.25	-6.50
Yen	-3.50	-2.75
Ausie Dollar	-0.75	2.75
Canadian Dollar	-0.75	-1.50
NZDollar	-2.50	-2.50

I would argue that far from spotting the Loch Ness monster we are seeing something altogether more frightening. The currencies below the gap, in that table, are know as commodity currencies while those above the gap are not. The commodity currencies are holding their own against the USDollar, just. The movement of the pound, far from showing exceptional movement plods on in the midst of its peers. All those non-commodity currencies are showing a serious weakness. I interpret the figures as a frightening flight of money to the US. Frightening because US bonds are seen as THE safe haven in times of trouble. The US Stock markets may be in the region of all time highs. But with smart money running for cover should we be following it now? Based on what we are seeing in the currency markets perhaps we should be getting our running shoes on.. My portfolio I'd like to think not because I am doing so well and, at last, am outperforming my benchmark, the FTSE 100 when measured by my portfolio overall. My US/China shares have been the big contributors in the past few days. Have  look at the table below. Even if you subtract the losses already taken on a few weak shares, I am still up almost 7.5% in about a month and a half. Unfortunately I have to set early year losses against this and when those are included I am still down 3.5% on my US/China portfolio since April. But it would be sad if the progress I am making to wipe out those losses comes to a grinding halt. 24-Jul MNK 15.5% 24-Jul act 12.4% 29-Jul BIDU 5.1% 29-Jul BITA 69.2% 29-Jul NTES 8.5% 29-Jul NOAH 0.4% 29-Jul FENG 0.8% 29-Jul YY 26.8% 29-Jul VNET -1.6% 29-Jul VIPS 4.0% 29-Jul XRS 31.2% 29-Jul WBAI -4.1% 11-Aug STV -14.2% 11-Aug KNDI -12.9% 11-Aug HOLI 4.1% 28-Aug ATHM 2.6% 28-Aug VIMC 38.9% 28-Aug CSIQ 14.2% 28-Aug TEDU 19.2% Average 9.1% San Francisco Murals Here are a couple more of my photos of murals in San Fransisco. (see yesterday's post).