The Zen of investing

Hi All

This is my first blog. In the months ahead I will outline my strategy for investing and the reasons behind my trades. I hope you will join me in this journey for fun, learning, and profitability. If you are wondering how I got the name for IKKYU Investing I named it after a famous 15th century Japanese Zen Master called IKKYU SOJUN whom I greatly admire.

Background:

My training and career has been in computers and networks where I am a qualified computer systems engineer and have worked at the University of BC as a Network Administrator and Computer Systems Coordinator. My education also includes a Diploma in Business Administration. I have also been an entrepreneur having owned and operated a successful film and video production company. My current interests are investing along with Zen Buddhism.

I am no expert in investing, but have spent the past three years studying markets, trading, and various investment strategies that seasoned investors use. I started off three years ago with $64,000 from a pension which I used for investing purposes. Over the course of three years and even with the recession I had the pension over $120,000, but I made some stupid learner mistakes ie getting too cocky and thinking I knew the markets better than anyone--- hence I lost money. My reason for starting this blog is I hope to learn from other investors, and they from me, thereby, hopefully limiting our losses and increasing the worth of our investments.

My current strategy:

I would characterize myself as both a value and macro investor. I believe that the markets are primarily driven on a broad basis by what happens at the macroeconomic level. Sure you can make money in different industries and companies, but overall your risk is far less if you can see the broad economic picture. It also helps to take the long view and to calculate your losses before you make a trade. You will sleep better at night if you take the long view. I am not talking about the investment strategy of buy and hold, but of setting a time horizon on a specific commodity or company.

My current strategy and time horizon is based on the commodity "oil". There is no doubt in my mind that peak oil is a reality and that we are running out of this resource. If you look what has happened with oil over the past year and even with the great recession oil should have been at $25 to $30 dollars per barrel. That never happened. I forsee that once we get out of this recession and demand from developing countries and the industrialized West starts to accellerate you will see the price of oil rise rapidly (within two years) at $150 to $200 per barrel.

There is also another factor that affects the price of oil and that is the American dollar. There is an inverse relationship that when the American dollar declines the price per barrel of oil rises. If the world economy keeps on improving and if GDP keeps rising (even at a small rate) in the United States, you will see the American dollar declining and the price of oil continually rising. The only thing that will change this scenario is if there is a double dip recession or some other economic event (Soverign default) etc takes place and there is another retreat back to the illusion of safety in the American dollar.

There is also a high probability that Isreal will attack Iran which will spike the price of oil. And I see this as almost a certainty. Iran has strong ambitions to acquire nucleur capability so as to level the playing field in the middle east, and become a powerful voice in the Arab region. The Hawks in Isreal won't let this happen and the United States will be powerless to change the course of events. Read the current edition of Foreign Affairs.

Russia along with the uncertainty of supply from the middle east (Saudi Arabia, Iran, Iraq etc) is so volatile and unpredictatble, that it is easy to see that a stable and predictable resource such as the Canadian oil Sands is an attractive alternative for large Energy producers and suppliers (even with the high cost of extraction); the facts I have are that even at $50 dollars a barrel, oil sand producers such as Suncor Energy and Canadian Oil Sands Trust are making money.

I see companies such as Suncor Energy and Canadian Oil Sands Trust appreciating considerably in value over the next two years. This is not an unreasonable expectation.

My Investments:
I am currently 95% in cash with a small investment in Suncor Energy and UTS Energy. The way I see it the markets are way overbought, and the threat of nation defaults such as Greece, Portugal and Spain is too great to leave your money in equities. A major correction seems inevitable.

Mark Jamison