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Alex Roslin's Financial Stories

Welcome to my blog. I'm an award-winning investigative journalist who has worked for Canada's premier investigative TV program, CBC-TV's the fifth estate, The Times of London, Futures & Options Trader and Technical Analysis of Stocks & Commodities. I've won a prestigious Canadian Association of Journalists investigative reporting award and am a seven-time finalist for CAJ and National Magazine Awards. Here are some of my finance stories.

Zen and the Art of Portfolio ManagementDecember 23 2008

As the markets tumble and all about you are losing their heads, you need not lose yours

Alex Roslin

Saturday, December 20, 2008

The Montreal Gazette

Is it finally over? The Market Horror Picture Show is lurching to a close. What fresh horrors will 2009 bring? And how can we be ready?

You know it's been tough when even the brightest minds in the investing world are running for the hills.

"What a sick beast this is," complained trader Stephen Vita in a post on his Alchemy of Trading website a few months ago. "This market is exasperating, and I'm frankly more than a little sick of the whole thing."

Even the world's richest man has gotten stomped. Warren Buffett's Berkshire Hathaway crashed an astonishing 50 percent from its high of last year to their lows of this fall's selloff, before recovering a little in the last few weeks.

But if the planet's best investor is on the run, what hope is there for us average schmoes? How can we possibly survive 2009, a year we're being told could be even worse?

Advice, as usual, is all over the place. "Hold tight, things will eventually turn around," say some. Or: "Sell now! Or you could lose everything."

Still o

Cutting Losses 101December 23 2008

Here are some simple risk-control rules commonly used by professional traders:

Decide when to sell before you buy: Buying is often easier than selling. When do you cash in if your stock goes up? When do you sell if it craters? Most everybody has an ouch point—even a buy-and-hold investor. Is it after losing 60 percent of your assets? Ninety percent?

The pros tend to avoid this conundrum by picking their selling point before they buy. It’s their way of admitting they don’t know what’s going to happen in the market.

A simple way is to look at a chart. Take the S&P/TSX composite index. It bottomed at 7647 in late November and has since gained 1,000 points. Not bad. If I were to buy it today, I might place my sell point (often called a “stop”) below a recent major low (like 7647) or the 20-day moving average.

Traders often set stops a little below such levels because they don’t like to get stopped out by regular market noise; they want to sell only because of a serious breakdown.

I use the same rule to figure out when to sell a winning stock. For example, I might place my stop one or two percent below a stock’s 20-day moving average and adjust upward as the price rises. That’s called a trailing stop.

The exact stop level can be adjusted based on the timeframe of the investor. A long-term purchase could use a stop 10 percent below a major multi-month low or the 50-day moving average; a very sh

Economic Crisis May Shift Society's DirectionNovember 27 2008

By Alex Roslin

Publish Date: November 27, 2008

The Georgia Straight

[read it online here]

In April 1928, Canadians had the world’s fastest-growing economy. We were enjoying a love affair with the automobile. Our homes were being electrified. A new invention—consumer credit—had unleashed a shopping revolution, pushing working people heavily into debt to buy washing machines, radios, and vacuum cleaners.

“No longer,” declared Andrew Mellon, the U.S. secretary of the treasury, “[is there] any fear on the part of the banks or the business community that some sudden and temporary business crisis may develop and precipitate a financial panic such as visited the country in former years.”

Eighteen months later, Mellon was scrambling to deal with the crash of 1929. The Depression left almost one in three Canadian workers unemployed and lopped 40 percent off the gross domestic product.

Unrest gave rise to new parties like the Co-operative Commonwealth Federation, the Social Credit Party of Canada, and a powerful Communist movement. The turbulence culminated in battles between police and workers at Vancouver’s Ballantyne Pier and in Regina in 1935, which helped bring down the staunchly anti-Communist government of Prime Minister R. B. “Iron Heel” Bennett.

Meanwhile, in Europe, economic disloca

The Big GrindSeptember 9 2008

Alex Roslin

Financial Post Magazine

Published: Tuesday, September 09, 2008

[read the story at the FP Mag site]

HERE'S A PREDICTION: Whether or not the world's financial markets and the global economy start to rebound this fall, someone out there will try to make a few bucks selling T-shirts emblazoned with the slogan "2008: I survived the Summer from Hell." No doubt, the shirts will be popular gag gifts on trading floors across the country. A chuckle, after all, is a good way to blow off stress. And investors have been feeling plenty of that in recent months, as turbulent markets have see-sawed or just plain sunk, and gains have disappeared in perilous downward grinds.

Indeed, in the earthy argot of aggressive traders, many market professionals have reached the "puke point" - the point at which feelings of panic and disgust keep you awake at night. And who can blame them? The conditions that exist today are a toxic mix of credit-market chaos, rising inflation fears and a meltdown in the U.S. housing sector that's knocked consumers for a loop. It's a triple whammy, and no one can figure out how to call it. Not even legendary investing guru Warren Buffett. After hitting an all-time high of $150,000 just before Christmas, shares in his holding company, Berkshire Hathaway Inc., were down 20% throughout the summer, even below the 15

Commodities Cautiously OptimisticJuly 15 2008

by Alex Roslin
Kitco.com
Tuesday, July 15, 2008

While stocks continue to suffer their bloodbath, precious metals bulls have cleaned up in recent weeks. Gold and silver have marched back close to their March highs, while copper briefly poked to a new high in July. Is this the launch pad for a new run-up in bullion prices? Will gold stay above $1,000 this time?

Trader positioning as reported in the weekly Commitments of Traders reports is a little mixed at this point, but my read is that it has been suggesting more U.S. dollar weakness, which would translate into higher commodity prices. Here are some highlights from the recent data, as reported by the U.S. Commodity Futures Trading Commission:

• The "smart money" commercial traders in U.S. dollar index futures sat at a bearish extreme in their positioning during all four weeks of June. They were more net short than any time since Oct. 2006 as a percentage of the total open interest. Recall that this was just as the greenback broke down from a half-year trading range between 83 and 87 and started the plunge to unprecedented lows. (On Monday the index was below 72.) In fact, the commercial traders haven’t been this negatory since May 2004 in relative terms (in comparison to their historic positioning). In mid-June, they wer