I’m still holding 100% cash but here are my top picks for 2012
1) Municipal Bonds
Defense is the name of the game going into the New Year. Issues in Europe continue to make holding low risk tax free Municipal Bonds an attractive play. I would play this by buying the ETF symbol MUB.
2) Shorting the Japanese Yen
The Japanese Yen has continued to appreciate throughout 2011. Investors seeking a safe refuge have been parking cash in the Japanese Yen as a low risk asset. This strong Yen is killing the export drivin Japanese economy. The BOJ (Bank of Japan) has intervened in the currency markets several times this year to stem the Yen’s strong gains. I would play this by buying the short Japanese Yen ETF symbol YCS. This is essentially betting that the Yen will depreciate over time. You have the Bank of Japan on your side willing to intervene in the market if the Yen continues to strengthen.
3) Long Term Buy: John B. Sanfilippo & Son common shares
This company is a fully intergrated Nut Company. They buy several types of nuts from farmers like Pecans and Walnuts than package and sell these nuts. The company is cheap. Sells for half the value of its tangible assets. Generates free cash flow meaning the company is profitable. Symbol: JBSS
4) Cold Hard Cash (U.S. Dollars)
I continue to believe we are in unprecedented times in terms of the stress in financial markets globally. This will bring opportunity. In order to take advantage of opportunity you need to have cash or capital to put to work. Holding large amounts of cash in the portfolio seems like a great way to capitalize on new opportunities.