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IF GOLDMAN SACHS RULES THE WORLD, WE'RE ALL STUFFED30.09.2011

When Alessio Rastani said on the BBC that Goldman Sachs rules the world (not governments) and he went to bed each night dreaming that there would be another finacial crisis, it got me thinking....

What advice would Under the Radar Report give in this situation?

You would head for high yielding stocks, which it just happens we are recommending in our next issue, out Thursday. You would also buy gold producers, which we also talk about in our Gold special in the next edition.

For one thing, we wouldn't advise to short, (or sell without owning and then borrowing the stock) the little Aussie Small Caps we cover (nor even those we don't)...far too dangerous.

You would short something though...possibly the futures of the major indexes like the FTSE or the S&P 500, or even the ASX futures; you could short BHP Billiton or Rio Tinto.

My friend at NAB Wealth Management says that his group offers a basket of goods in it's "Flight to Quality Trade" - these are basically US Treasuries (or Government Bonds), US Bills, Gold, and VIX futures - which measures volatility (don't ask me how).

It depends what type of recession it is too - whether its inflation; staglation (rising prices and rising unemployment), deflatoin etc etc

In bad times, sin stocks do well, like tobacco, alcohol, gaming. You could also put money into corporate recovery companies; companies that purchase receivables books; loan shark type companies - those that do payday loans - this is being monitored and regulated by Bill Shorten though.

If you have any ideas, please tell me - the more the better - I need to write on this stuff for The Australian.

Have a great weekend and you can see me on Television at about 8.15 on Monday morning on the ABC Breakfast News show with Virginia Trioli.

 

Richard

About the Author

Caroline Mark

Caroline is the publisher of Under the Radar Report. She has a diverse background, from producing financial publications, to fundraising and marketing.

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