Questions
with Craig Harris
Craig Harris
President:
Harris Capital
Management, Inc. CTA
March 1, 2004
It's been a
while since I've written anything for the public domain, and
I have had a lot of requests from the public to follow up on
my "Thoughts
for 2003." What
I've recently started to do with my clients is to look out towards
the end of 2004, and into 2005 and 2006 by formulating a list
of what I think are the important questions to ask.
I really believe
that people underestimate the value of knowing what the questions
are. I think knowing the correct questions to answer is the key
to forming a correct outlook. If you don't know what questions
you need to answer, then where are you? (lost).
I'm starting
this series with a list of questions, and periodically I'll be
tackling the answers one by one, with each answer linked in my archives.
So... with
all that said, let's going. Here is a list of what I think are
the important questions to ask now looking forward, in no particular
order.
1.) When are
interest rates going to begin to rise and what will the catalyst
be? Will the short end rise first due to FED tightening or will
the long end rise first as a reaction to the dollar slide or
perceived economic strength?
1.A) Sooner
or later, interest rates will rise. What will the likely result
of rising interest rates be?
2.) Who is
going to win the US election in November? Depending on the outcome,
how will that affect the economic and geopolitical environment
and investor psychology?
2.A) Hyperpower
or colossal mistake?
2.B) Specifically,
what significant differences could we as market participants
expect between Bush, Kerry and Nader?
3.) Is it going
to be as simple as Soros said a month or so ago...a liquidity
induced boom in 2004 followed by a bust in 2005? If not, what?
4.) If we do
have a "bust" in 2005, what will it look like? Are
we going to see that deflationary collapse everyone is so worried
about, or are we going to see more stagflation?
5.) Where are
we with the consumer debt load and is it sustainable?
6.) What's
in store with the Federal budget deficit?
7.) What impact
will terrorism have on the economy and the markets?
8.) What's
going to happen with the much talked about real estate bubble?
9.) Where are
we going with the current account deficit? What is going to cause
a sustainable equilibrium to develop and what will the impact
be?
9.A) What would
a "sustainable equilibrium" look like? ...and what
am I even talking about?
10.) Are there
any investments that could work out well given a variety of the
most likely scenarios? If so, what are they?
11.) The USD
is currently the world's reserve currency. Under what conditions
would that change and what would the impact of that status shift
be?
12.) When,
if ever, will longer term issues like "peak oil" and
global warming begin to affect the commodity markets?
12.A) Given
the ideas of peak oil and the current geopolitical climate, where
is the price of oil going and how will that effect the dollar,
the balance of trade and interest rates?
13.) When,
if ever, will the FED lose it's ability to cloak the large real
increases in the cost of living?
14.) When,
if ever will the FED lose the war it is fighting to suppress
the price of key inflation sensitive commodities?
14.A) In a
general sense, I have argued that the US is moving from a free
market economy to a financially engineered economy. If I am correct,
what will the evolution of this look like?
15.) Along
the same lines, will the doublespeak the FED has been engaging
in as a financial engineering tool ever cause a credibility problem
for the FED?
16.) What is
going to happen regarding the pre emptive doctrine and the US
foray into IRAQ?
16.A) Will
the oil ever begin to flow as Cheney had hoped prior to the invasion?
16.B) Will
the United States be able to recover it's role model status to
the rest of the world?
16.C) Is the
Neocon movement over as some have recently speculated?
17.) Of the
list of questions, which are the most critical... the most important
to your investing?
17.A) Which
of these questions have quality of life implications?
March 1, 2004
Craig Harris
President
Harris Capital Management, Inc. CTA
http://www.harriscapitalmanagement.com
bcharris@gate.net
Mr Harris offers
a free 30 day trial subscription to his daily market letter.
For a free trial please contact bcharris@gate.net.
The risk of
trading commodity futures contracts can be substantial. You should
therefore, carefully consider whether such trading is suitable
for you in light of your circumstances and financial resources.
If you choose to open an account with Harris Capital Management,
a Risk Disclosure will be sent to you. Please read it carefully
before you invest.
###
Harris Capital
Management, Inc. CTA is a futures broker and registered Commodity
Trading Advisor, meeting the needs of futures traders worldwide.
They provide a high level of personal service to discriminating
clients around the world, while offering commission rates comparable
to discount brokers. All clients are handled directly by Mr.
Harris.
Copyright ©1995-2004
Harris Capital Management Inc. All Rights Reserved.
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