SOS Portfolio Results

As noted in last Oct 2009, I have set up a hypothesis portfolio on inflationist and deflationist, after 14 months, portfolio inflationist performed much better than deflationist.

Inflationist gain 14% and Deflationist loss 17%.

So the Inflationist Camp is the winner for the last 14 months. It seems that since the portfolios were created, continuous QE was one of the reasons commodities prices has gone up, the only thing that slows is the housing. It appears that there is ASSET deflation but there is also a PRICE inflation in consumables (necessity not the luxury goods).

MyView

I believe both arguements have their merits, however, the actions by the mass is non rational, hence it is not easy to predict the directions. Consumer moods changes. For example, more people prefer to let the mortgage default and hence, use the extra money to purchase other items. I will continue to monitor and update every quarter.