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The Daily Reckoning Weekend Edition Saturday, April 10, 2010 Taipei, Taiwan --------------------------------------------------------- Trade of the New Decade: A sneak peak at your fellow readers' ideas, How to temporarily impress tech savvy teens in Taiwan, Plus, all the past week's reckonings neatly archived for your intellectual inhalation... Joel Bowman, reporting from Taipei, Taiwan... Faithful Daily Reckoning readers (and even some unfaithful ones) will undoubtedly be familiar with a concept known in these pages as the "Trade of the Decade." In today's Weekend Edition, we're going to take a look at a few of your ideas.  But first, for the really unfaithful (or relatively new) readers, here's a quick recap... Around the turn of the millennium, our Reckoner-in-Chief, Bill Bonner, offered a simple pair trade. Bill's idea was (roughly) to identify one asset class to buy and one to sell over the next ten years. The result: Buy gold on dips, sell stocks on rallies. At the time Bill issued his idea, gold was considered somewhat of an "untouchable" asset among mainstream investors. Stocks, as you might well remember, were all the rage and "buy and hold" was the banner under which equity enthusiasts marched. In hindsight, it seems easy enough to take the contrarian bet. But isn't everything easier with the benefit of time travel?  As history would have it, the trade was a commendable success. Gold more than quadrupled over the decade while stocks...well...not so much. Even before allowing for inflation and myriad fees, the decade was a veritable cipher for stocks. In addition to proving a favorable trade, the concept also provided a useful backdrop against which many of the decade's editorial themes were based, i.e., debts, deficits and, of course, the decline of the once almighty greenback. And so, at the beginning of this year, Bill decided to issue a Trade of the New Decade: Sell US Treasury debt/Buy Japanese stocks. "Crazy, right?" wrote Bill in the very same column. Maybe not? We'll see.  While readers were reckoning on Bill's trade, our senior editor and long time Daily Reckoning contributor, Eric Fry, issued his own Trade of the New Decade: "Sell everything...except uranium." We'll see how this pair of pair trades plays out over the years to come - with a few thousand issues of commentary and entertainment in between. In the meantime, we are curious to hear what our readers have to say on the matter.  With that in mind, we recently asked readers to submit their own Trades of the Decade. The rules, as Eric outlined, are pretty straightforward:  1. Identify just one specific asset, commodity, stock market sector, currency, mutual fund, ETF etc. to buy and hold for the next 10 years. Please provide a symbol, if possible. But please do not provide the name or symbol of an individual company. (We are seeking to identify attractive asset classes, not specific companies.) 2. Identify just one specific asset, commodity, stock market sector, currency, mutual fund, ETF etc. to sell short for the next 10 years. We'll be presenting a selection of readers' responses in upcoming issues but, for now, here are a few to get your creative juices flowing... First up, here's reader Mr. Presch.  "Buy and Hold: Palladium in physical form (forget the paper). I have been an advocate of Pd for over a decade... "Why Pd? Obvious reasons on the supply side are: limited current supply, difficult to get out of the ground at a high rate, limited in- ground reserves, lousy locations where it is mined. "On the demand side: humanity simply needs it much more than Au (at least according to today's knowledge of limited uses for gold) and it looks mighty fine too. "In my opinion there is little reason to have Pd priced vastly lower than Pt and as a group both should win out over the next 10 years, with Pd having the potential to gain twice as much as Pt." And for the short, Mr. Presch? "Any stock that invests in mile-high sky scrapers, luxury golf courses and palm shaped islands in deserts (or other remote locations on this planet) that ought to be fit only for camels and extremely hardy individuals. My point is simply this: humanity cannot afford wasting limited resources on absolutely pointless ventures that spend millions/billions in whatever currency you choose and benefit only a select few individuals. Any company that wants to cash in on that dying trend will in my view loose out, which means that the stock holders will loose." Perhaps unsurprisingly, given the crowd, tangible assets were pretty popular amongst readers. Most paper currencies, as you might imagine, were out. Continuing with that theme, another reader, Glen, writes... "BUY: natural gas. It's been beaten way down but will surge back over the long haul because the world will start to transition away from oil. Coal is too dirty, and alternatives are lacking (solar, geothermal, biomass, wind, etc. are useful only within a narrow range of activities)." And what doesn't Glen like? "SELL: any fiat currency, but if I had to pick one, I'd say the euro. The EU has gotten itself into a pickle. They welcomed members they shouldn't have, and they will pay the price. There is just too much variation among member states for all to live under one currency. And with the hard times ahead (not before a crackup boom, though!), people will at first flee the weaker currencies to the dollar, but even old greenback is doomed, so I say short 'em all, but the euro especially. I think this will likely take the entire next decade to play out, but when it does, fiat currencies will be in shambles." Next up, a "long suffering" reader by the name of Ferdinand shares his thoughts: "Sell US Treasury Debt (sell the US dollar) and buy gold. I still think buying gold is the Trade of the Decade because the world is being flooded with fiat paper from every nation. All of this paper money is basically worthless. Gold (and silver to a lesser extent) is the only real money.  "The US is bankrupt ($12 trillion + debt and $106 trillion + unfunded liabilities) and all the while adding tons more obligations. The only choice for the US is default or hyperinflation or a combination of both. This makes the sell side of the equation a no brainer. If the above happens, all the rest of the paper currencies will eventually be worthless also leaving only gold as real money. Thus the buy side of the equation."  And lastly today (this is just a preview, after all) we bring you some thoughts form Don, in Portland.  "Go long emerging markets, especially Brazil and India. Be careful not to load up too much on Russia and China." And? "Short the Euro. If it doesn't last long enough to make the butt end of the trade of the decade, then let's short those ridiculous plastic water bottles everyone seems to have these days." Thanks to everyone who has written in so far. We'll be publishing a larger selection of your responses in upcoming editions so, if you'd like to send us some thoughts of your own, please do so at this address: joel@dailyreckoning.com And now on to your regular reading... ALSO THIS WEEK in The Daily Reckoning... Huge RNAi Breakthroughs! By Patrick Cox Marco Island, Florida  Once again, huge scientific news has disrupted my plans. Last week, I put off giving you additional news on the quest for an Alzheimer's disease cure as well as some fascinating and related data on the health benefits of coffee. The reason, as you know, was that two companies in our portfolio announced truly historic breakthroughs in stem cell science. The Great Correction...Still Pending By Bill Bonner Baltimore, Maryland  For more than a year, the "recovery" bounce in the stock market has refused to give up. The indexes have recovered more than 50% of what was lost. Technically, they look pretty good. What's more, the S&P sells at more than 21 times normalized earnings, according to Robert Shiller's latest tally. It seems like nothing can stop stocks now. Brace for Turbulence By Dan Amoss Jacobus, Pennsylvania  I had the good fortune to attend a speech by Russell Napier last week. Napier is a stock market historian. But he's not just an ivory-tower academic; he operates on the front lines of the investment management business as an analyst for the brokerage firm CLSA. Napier's been in the trenches of the global financial markets for several decades. Brace for Turbulence, Part II By Dan Amoss Jacobus, Pennsylvania History shows that when the governments grow desperate to finance deficits, they get creative. During WWII, the US government needed investors to buy an unprecedented amount of Treasury bonds. Commercial banks loaded up on Treasuries, which limited the amount of credit that could be granted to the private sector. It may have been the patriotic thing to do, but the real returns from war bonds were very poor. Napier said, "That's the type of society [the US and the UK] had to run to sustain our government debt. And I'm suggesting to you that these are exactly the sorts of things we have to look out for in our future." A Space Oddity By Bill Bonner Baltimore, Maryland Since 1946, at least in the US, the skies got a little bluer every day. Consumer spending increased nearly every year. At first, consumers spent what they earned. And then came the wonder years...when they spent more and more money they hadn't earned yet.  The Weekly Endnote: Your editor was mistakenly labeled "kinda cool" during the week by some Taiwanese teens who live in his building. In an attempt to demystify the riddle of what the tall, nocturnal Aussie does for a job, we showed them the new Daily Reckoning iPhone App.  It took about three minutes before they realized it wasn't a computer game...thereby downgrading immediately any temporary "coolness" factor. Still, we reckon they were secretly impressed... Check it out: If you're an iPhone, iPod Touch, or iPad owner, you can click here for instructions on how to download it, or just get it direct from the iTunes store. In addition to being able to carry a little reckoning around in your back pocket, you can also access our sister e-letters, including The 5-Minute Forecast, Penny Sleuth and Whiskey & Gunpowder. And it takes all of about 30 seconds to download (less if you've got tech savvy kids). Not too shabby, huh? Until next time... Cheers, Joel Bowman Managing Editor, The Daily Reckoning P.S. Right as we were about to go to "press" with this issue, Addison sent us this urgent message: "Our friends at EverBank are about to take the wraps off their latest MarketSafe CD. This one is geared toward precious metals - investing in one-third gold, one-third silver and one-third platinum. Like all the MarketSafe CDs, this is principal protected - its value cannot fall below your initial investment - while the upside is all yours. "Agora Financial readers can get first crack at this CD when it becomes available a few days from now. Just take 30 seconds to sign up here and an EverBank representative will call you back to get you started." Full disclosure: Agora Financial is in a commercial relationship with EverBank and may receive compensation if you open an account. But as with all our services, we wouldn't offer them to you if we didn't think they were a good deal for you. ----------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com   The Daily Reckoning - Special Reports: Gold: The Truth About Gold Fiat Currency: Using the Past to See into the Future "THE GREAT AMERICAN RECOVERY RP-OFF" Brace yourself for what's about to go down as the BIGGEST FINANCIAL SWINDLE in world history.