As i understand the majority of hedges will be closed in the 80 to 90 cent range but we'll need the aud dollar to get around the early 90 cent range for all of them to be closed.
One thing i will say though is the sp at current levels will more than likely factor in the next 6-12 months being that the majority of the writedowns have already taken place in 2008/9 financial year.We should start to see the sp hover over the 10cent mark and then maybe staying in the teens for a while as the daytraders play the new game of pass the parcel but this time at a higher level.
I think by the middle of next year we should see investor sentiment swing towards optimism as Fed Chairman Bernanke continues to artificially boost the economy with more stimulus thus creating another artificial bubble economy.
As the dow rallies so will our dollar and some investors overseas are starting to switch over to stocks and buying up aud dollars.For the next 6-12 months some of the indicators im watching in the U.S is on company earnings, unemployment levels/Non-Farm Employment Change, gdp, Core Retail Sales m/m,Core Durable Goods Orders m/m and ISM Manufacturing PMI.I will be hoping that the all ords stays above 4000 by year end and if so next year could be the early signs of another "bull market" thus slowly moving into the broader economy as certain indicators by year end should give us a glimpse of what to expect in the coming years.
Imho i think the dow has always been in a bubble since they were off the gold standard and believe we're are moving into a period of high inflation(increase in the money supply) maybe even hyper inflation which in turn loses purchasing power for people who hold u.s dollars as policymakers stretch to finance expensive rescue plans.
As some might argue that gold would be the best asset to own in this condition as the U.S continues to debase its currency.I'd rather be holding bricks and mortar that appreciate over time as i know write downs are just part of the cycle and cer will soon start the journey up.
I remain committed to cer and believe as a long term holder that value is created over longer periods of time and eventually price will catch up to value.
So to the long term holders just stay focused and not worry to much about the day to day movements in sp.Soon enough cer will be back on their feet and this will be all a dream.
cheers....
CER Price at posting:
9.8¢ Sentiment: LT Buy Disclosure: Held
