The New Zealand Dollar has so many people piling onto it that the governemnt is getting worried. New Zealand Telecom has been very good to me and is now fairly valued. So, do I want to be where the crowd is outside the U.S. in beautiful country with environmentalists and peacenicks for governments? Well yes, I'd like to live there. But my money, it doesn't want to be in places like that. My money wants to be in a country where the rest of the world, including its own citizens, are freaking out.
So what's cheap? U.S. Financials.
Yesterday I sold New Zealand Telecom (NZT – $29.55) at $31.15 and bought Goldman Sachs (GS -$195.12) for $202.10.
I also sold puts on the ETF representing the Financial Sector. I sold short the Jan 2009 Leaps 30 strike Puts at $1.45 (gives me a net price of $28.55 on that ETF. Last time the XLF was at that price was October 2005. And these financials have all increased their book values huge since then).
Personal Disclosure:
I own GS, and still have a position in NZT. I have no direct position in XLF, only the puts described above. I would own XLF right here at $33 but I'm looking for an opportunity to buy it a bit lower, which I think might come soon.
Warning to the Wise in a Panic:
Panics can be fun, but don't get too excited and be careful. Averaging down has killed more investors than Joe Stalin.