Monday, February 4, 2013

Hong-Kong REITs and Japanese bonds

It's been a good couple months for me, mostly made in small-cap land.  The fiscal cliff deal ended up not increasing carried interest or taxes on dividend more than 5%, so I immediately exited all high-dividend shorts and flipped some long on Jan 2.

For now, I have a high committment swing long running in, a REIT w/ property in China.  With Hong Kong having to hold the peg at 7.75, HKDs have again been flooding into HK, which should contribute to the property bubble, and may spark a fresh bubble in H-shares.  Numerous H-share REITs w/ property in either HK or mainland China have had very clean breakouts. looks set to go.  I have a lot at this moment.

I also just entered a short in JGB Japanese 10-year gov't notes.  There have been doomsayers in these for years, but the deflationary circumstances have kept yield down.  I hate picking tops (bottoms in yields), but there's a decent chart setup here, and the prime minister's actions to spark more inflation have killed the yen, so perhaps JGBs will make a delayed move to follow.  Note that JGBs have already sold off in USD terms b/c the yen has been killed, but I'm looking for the yields to rise at this point too.  I still have my stop loss set relatively tight on this in case I'm wrong.