When I fly west to LA I often head up to the cockpit to chat with the pilots. We track the US Mexican border, just a hundred or so miles into Mexico and the shadows on the terrain are so pretty. I could be sitting there having a scotch, smoking a cigar and give the pilot a bearhug (no not 'that' kind of bearhug .. like old friends) and we'd all have a good laugh up there. You'd get 20 years for trying that on an America West flight. Quite a dichotomy.
On this recent flight I sat there for a while looking at all the gauges as "George" the autopilot flew and the crew chowed on chicken cordon blue.. I asked the senior pilot; if he was flying with just the front window (dead reckoning) and "one gauge" of his choice.. what would it be? The pilot thought about it for a second and then said: "The EGT".
Exhaust gas temperature is a gauge that reveals several data points at the same time. It can be used to indicate how fast you're going because it tells you how hot your exhaust is.. EGT is low? You're going slower.. EGT is high.. you're going faster. It also tells you the potential condition of those engines in a crisis situation etc etc.
The temperature can't be gamed.
I was thinking about the temperature of our markets this morning .. you've got sub-prime and Alt-A -- even prime loans having real problems in the US, yet the stock market is fine with it. Stocks are strong in Asia 'and' the US .. The dollar is lower but stable against other currencies. Bond jockeys are confidently predicting a long bull run with rates dropping later this year. Oil is holding in the low 60's .. but Gold is way up at $680 an ounce.. The metals have been moved somewhat by hedge-funds in recent years, but they are harder to game because they pay no interest. Buy an ounce of Gold and that's what you've got. It gets no greater or smaller because it pays nothing. That keeps BIG investor money out for the most part. Mainly the gold-bugs are in this. I am thinking about buying more gold because everything looks gamed to me. The USA has been running the printing presses in overdrive to pay for two wars, other currencies (Euro, C$, Yen) have competitively reflated along-side so they can keep exporting to the US.
Real Estate is problematic because its number one characteristic is that it's immobile. You can't move your house in FL to Paris or China .. you have to sell each house and physically relocate. I do not like Real Estate (aside from your principal residence) for that reason and I used to be a licensed realtor with half a dozen properties in his portfolio.
Gold is the greater market's EGT, so I am going to try to take a bigger stake in that on the dips.. Domains and Gold.. what a weird combo.