Hedge: Long LAYN Short CAT

LAYN is in the mining business, like CAT is, by selling machinery. It has a better balance sheet than CAT does (less leverage) and provides more, I believe, machinery to the gold mining industry. So I believe it's a great hedge; especially with the thought that it may be bought out by a behemoth like CAT. It is also a play on the rising price of precious metals.

10% SHORT

I think Caterpillar (CAT) can sell off 10%. The risk is its 52wk high. The market is bullish but some more than others, hence the word hedge. This is a great stock to short I believe.

Buy penny stock gold mining companies

I think Jim Sinclair is correct and that people will be hunting for big speculative plays. If gold is here to stay, then the year 2000 for high techs will be chump change as gold mining companies will be considered, in an early stage, as financial institutions were once. 1-10,000% should be the peak on them.

If that is an exagerration then please review the year 2000 bubble where high tech companies with virtually nothing jumped from$1 to $300 per share.

Lets see.

Of course, the dollar and financial confidence may crash and that is something I do not want. But a bull market in inflation plays appears to be the long term trend currently.

CDE should be a $200 stock.

SP500 on sale again

Buy the S&P500 on yesterday's panic day. There should be some type of rally. But if not, then get out with a 2-3% stop. Can it really drop again, that quickly?

10069 high to 9737 current price on the Dow is a 332 point sell off and remember that the last down day for the general market was an up day for the Dow, due to IBM's strong earnings performace.

Short Gambling?

LVS, MGM, and WYNN have had impressive runs. This is a long shot but one of them may go broke, so why not way out of the money puts?

$5-10 bets may be a 10 bagger (1000% gains).

What to do

The market is up so should one worry about a correction? Yes. But one can reduce the worry by buying stocks that are undervalued. As Mr. Dines, the newsletter writer, often comments: "Drink upstream from the herd"

As to today, let the market settle. There should a clear trend late today or tomorrow.

Of course, by then I will be going down the aisle and definitely not have the financial market in mind the rest of the week.

What to do today

Nothing.

1) Earnings season with a lot of headline dissapointments
2) Options expiration

Enjoy the weekend!