Hi there

This is Felix writing. Welcome to my monthly "Felix Investment Pick" publication for May of 2008. It is April 21st, 2008 as I am writing this article.

Few days ago, a friend of mine visited me. Because this article is going out to my list of tens of thousands of forex traders, I do not want to use the guy's real name, so let's just call him Joe. The reason Joe visited me was because he was gravely concerned about the deprecation of US dollar, and he wanted to get my advice on what he should do with his already beat up by depreciation savings.

Joe and I have common friend that visited me around September of 2007 with the same concern. As far as I remember, Joe's friend had savings of around $15,000 USD, and he wanted to know what he could do to preserve it. At that time I just told him to go to Gold coins, silver bullion, gold bullion, silver coins and PCGS Certified Coins at www.golddealer.com | America's Coin Dealer, and buy some gold coins. He did that, and as far as I remember his cost was around $730 per ounce or so. Long story short, back in the middle of March gold peaked at over $1030. Even though gold has come down a bit in April and is now trading at around $915 per ounce, the guy still has 25% more money than he would've if he kept his savings in US dollars. So Joe came to me, wanting to know my opinion on whether he should buy gold or whether he should buy something else.

Now, you have to understand something. Joe works at a regular brick & mortar job. He knows very little about investing. He knows nothing about forex. His savings are much less than $50,000. He has regular checking account in popular US bank. So I tried to put myself in Joe's shoes, and by being in his shoes, I understood that I need to tell Joe to buy something that he wouldn't have to think about or worry about for at least 6 months.

I asked my partner Rob Grespi whether he had any suggestions for Joe. Rob said that if he were Joe, he would call his Swiss banker and tell them to buy gold and settle it in Swiss Francs. The only problem is that Joe does not have a Swiss or European bank account, and US banks are not designed for investing, and their currency conversion rates are basically pure robbery.

Then Rob Grespi suggested that Joe goes to www.everbank.com and looks into some investment options they offer. EverBank is US bank that caters to small investors, and probably the most reputable FDIC insured bank in the US that allows American customers to buy Certificates of Deposits (CDs) in international currencies.

So I decided to go to everbank.com and looked into the investment packages they offer. I must say that I was very impressed by this bank, which has been operating since 1961. Obviously, they are many notches down from a major Swiss Bank, but the problem with Swiss Banks is that unless you are ready to transact in multiples of $250,000 per investment, you might as well not even stick your nose there.

I found in everbank.com a 6-month mixed-currency CD, which I personally would buy if I had very little money like Joe and if I had no time to look at the market for 6 months. Minimum investment for the CD is only $20,000, and I think the currencies that the bank picked for this particular package have good potential for the next 6 months. Let me tell you which CD it is, and the reasons why I am suggesting that Joe puts his US dollars into it for the time being.

The CD that I am talking about is called New World Energy Index CD. Here is the link for it: EverBank | Foreign Currency - WorldCurrency New World Energy Index CD. It’s basically a CD that combines AUD/CAD/NOK, 33.33% each. AUD is Australian Dollar, CAD is Canadian Dollar, and NOK is Norwegian Krone. Let me now briefly explain why I think combination of these currencies makes a great investment for somebody who does not have the time or expertise to be in the market on weekly basis.

Before I proceed with discussing these individual currencies, let me first tell you my longer term investing philosophy.

Step 1. Find a river with strong current

Step 2. Make sure there are no foreseeable obstacles to the current

Step 3. Start swimming along the current

Step 4. While swimming keep looking forward and around

Step 5. As soon as you find river with stronger current, switch immediately

Australian Dollar

Let's talk about the Australian Dollar first. Australian Dollar has been very steadily going up in value against US dollar over the last few years. Since 2006, it has gained 35% against US dollar, and I see many reasons why it will continue to strengthen for the next 6 months and possibly much longer.
In the last few months we have seen "parity" phenomenon happening with several different currencies. Canadian dollar reached parity with US Dollar. Swiss Frank reached parity with US Dollar. Great British Pound reached equal 2:1 ratio with US dollar. Gold reached $1000 per ounce. USD/JPY hit 100. Current big topic among speculative traders is parity between US Dollar and Australian Dollar. Right now the rate is 0.94, and I think speculative traders can easily push it to 1:1 ratio in the next 6 months, and perhaps even higher.

In addition to that, Australia has second highest interest rate among major currencies at 7.25%, and obviously it makes it an attractive currency for many investors to keep their money in. That's 5% higher than US interest rate of 2.25%. Not only that, but Australian economy is still doing very well and inflation is rather high, based on which most economists speculate that Australia is not likely to cut their interest rate in 2008 at all.

Let's also not forget that Australia is among the top 3 producers of gold in the world, along with China and South Africa, and as gold prices keep creeping up, it supports gold mining industry in Australia and more companies are inspired to do more gold explorations, which supports local economy. And of course just based on the fact that Australian dollar has had very close positive correlation with gold, chances are that correlation will continue, and as gold rises in price, Australian dollar may do the same.

It also helps that Australia has a very well diversified economy with strong services based sector, like many other Western economies, but in addition to that, they also have strong agricultural sector and strong mining sector, which allows them not only feed many sectors of their own country but also it allows them to export food, metals, and energy-producing commodities and since prices for both food and other commodities are steadily going up globally, it sure supports Australian economy and therefore makes investors more confident to buy up Australian dollars and continue creating its climb up. Oh yes, very few people know this, but Australia has one of the largest deposits of Uranium in the world. Currently France gets most of its electricity from nuclear power. Russia has hired French experts to build quite a few nuclear power plants, and China is building nuclear power plants. I think that uranium will soon become as important or more important than oil.

Canadian Dollar

Let's now talk about the Canadian dollar. This currency definitely has very strong current going against the US dollar. Since 2002, it gained over 60% against the US dollar. Last year alone, it gained 25%, and I believe there are reasons to believe that Canadian dollar will continue gaining strength against the US dollar for the following reasons.
Well, first of all, for many decades Canadian economy has heavily depended on US economy, so as US economy started performing badly, investors were afraid to invest into Canadian dollar, because they thought that US economy would drag down Canadian economy as well, but 2007 and 2008 has proved that paradigm wrong. As US economy was rapidly slowing down with GDP and employment readings at historic lows, Canadian GDP and employment were soaring. As US was discussing cutting interest rates in order to give heat to cooling economy, Canada was discussing raising interest rates in order to cool down heating economy. So as we are entering US recession and possibly even depression, Canadian economy is doing well, and possibly for the first time in the history of these two countries, investors are seeing that globalization has made Canadian economy very independent from US economy, and has taken many fears from investing into Canadian stocks and therefore Canadian dollar.

As world population is growing and Asian countries are becoming more and more civilized and more and more rich, the demand for energy products is soaring and therefore the prices are soaring too. You probably already know that the most "popular" energy product over the last century has been oil. Canada happens to have 2nd biggest oil deposits in the world, after Saudi Arabia. But in addition to that, Canada also has vast natural gas resources and vast uranium resources. As world is becoming more stable, it's becoming more and more difficult for US to conquer other countries and rape them of their natural resources for pennies on a dollar, which by the way is the only reason US still has twice cheaper gasoline than Europe, and since the US is major global consumer for energy products, I can see in very near future US being forced to buy a lot of their energy products for fair market prices, and Canada will probably become #1 provider, which will tremendously boost Canadian economy and continue creating much demand for Canadian dollars as more global investors invest into their economy.

Norwegian Krone

Let's now talk about the Norwegian Krone. In the beginning of 2002, you could buy $1 US dollar for 9 Norwegian Krones. In the beginning of 2007, you could buy $1 US dollar for 6 Norwegian Krones. Today, you can buy $1 US dollar for 5 Norwegian Krones. This means that since 2002, the value of Norwegian Krone (NOK) has almost doubled, and just in the last year, NOK has appreciated by over 20% against US dollar. I believe the trend will continue for at least 6 months and probably much longer. Let's talk about it.

Over the last few years, Norway has proved to have one of the best economic models in the world. From 2001 to 2006, Norway was considered the best country in the world to live in, based on Human Development Index. In 2007, Iceland took 1st place, and Norway got 2nd place. Human Development Index is basically an index that measures life expectancy, GDP per capita, education, literacy, health, and general standard of living of people in any particular country. Based on that, we know that Norwegians got their **** together so to speak. Let's face it, people are what make countries great, and historically countries that have the best human resources have always done well economically.

But in addition to very strong human capital, Norway has oil and gas. Many people know that Russia exports a lot of oil and gas. Many people know that Saudi Arabia exports a lot of oil, but very few people know that Norway has the 3rd place in the world by exports of oil and gas. Many people have heard of gas and oil from North Sea from which UK has exclusively been living off of. Some people may have heard that North Sea oil output has been dropping every year, but still, Norway currently owns around 54% of all remaining oil in the North Sea, and around 45% of all remaining gas in the North Sea.

In addition to all of this, Norway puts a lot of emphasis on savings and being well capitalized, which gives a sense of stability to potential investors. In fact, as of today, Norway has 1st place in terms of the largest per capita capital reserve of any nation. Currently Norway's savings exceed the amount of Norway's GDP, and the country has assets that equal to approximately $70,000 US Dollars for every Norwegian resident. US, on the other hand, is 65th in the world by per capita reserve. In fact instead of capital reserve, US has approximately -$32,000 of debt for every US resident.

That's all I have to say for this month . I hope you found this article useful. I believe that diversification of your cash between Australian Dollars, Canadian Dollars, and Norwegian Krones is a great move in capital preservation. Having a CD of these three currencies would certainly make me sleep better at night than having US dollars.

But hey, what do I know, I am just a guy, perhaps you'll be better off listening to your local banker that earns $35,000 per year and has no savings. Perhaps you should follow his advice and buy US government bonds or put it into US CD, that will earn you 2% annual interest, and maybe your dollars will even outperform Mongolian tugriks.

Dear Rekan Trader semua,

Bagi rekan-rekan  yang  sebelumnya melakukan Deposit dengan E-Gold dan sekarang kesulitan Withdrawal dengan E-Gold karena adanya masalah , maka silakan untuk melakukan withdrawal dengan Liberty Reserve.

Untuk selanjutnya silakan Deposit dan Withdrawal dengan e-currency selain E-Gold mengingat saat ini sedang ada trouble .

Salam,

Aldhy SP

Kita ketahui pasca maintenance dari pihak Liteforex pada hari Sabtu 30 Maret 2008, kita mengalami kesulitan saat melakukan  Deposit dan Withdrawal.

Namun akhirnya semua kembali normal hari ini, order withdraw saya yang saya order tadi malam pukul 8 telah di proses seperti biasa pada pukul 3 sore hari ini. Berikut adalah buktinya :

Sedangkan untuk DEPOSIT dengan E-GOLD sedang bermasalah dan akan selesai pada Selasa 8 April. Akan saya update sekiranya sudah normal.

Hello Guys,

Apa kabar nih   Sukses selalu tentunya.

Hampir 2 bulan lebih saya tidak menulis di jurnal saya ini.  Selain sibuk dengan offline job juga sibuk cari referensi mengenai Neural Network (NN). Kita ketahui bahwa juara Automated Trading Championship 2008 di sabet oleh EA berbasis Neural Network. Tidak tangung-tanggung posisi 1 dan posisi 2 sama-sama menggunakan Neural Network. Jadi Neural Network dengan system cerdasnya terbukti dapat membantu system technical melakukan forecasting di Forex Market dengan lebih baik. Karena itulah tidak salah jika kita sebagai EA developer sudah seharusnya mulai melirik NN untuk menyempurnakan system yang sudah dimiliki.

Harapan saya, dalam waktu satu bulan ini sudah dapat terselesaikan EA terbaru saya yaitu 910-M30 Ver. 2.0 yang di sempurnakan dengan NN. Semoga hasilnya baik dan dapat kita nikmati bersama 

Sukses selalu

Aldhy SP