Q: Is there any concern regarding Druckenmiller’s divesture of gold ? “Even as Druckenmiller’s Duquesne Family Office sold out of 18 equity positions in the third quarter, it divested its $324 million stake in an exchange-traded fund that tracks gold prices,”

And with taking full short postions recently, is there really much chance of reducing your short exposure?

J: He actually didn’t sell any. There’s been some miscommunication somewhere. He has call options on $300 million worth of underlying GLD according to his latest SEC filing. He also told someone I have talked with that his position has always been in the options so there’s really been no change in his position.

As for the shorts, I really don’t expect to change my positions at all unless the underlying dynamics change materially. We will just have to see how the markets behave going forward.

Q: Hi Jesse- I have been reading some interesting articles about silver and the industrial uses of silver. Pv panels is one example. Do you have any interest in silver stocks?

J: There are probably some good opportunities out there (the chart of SSRI has had my attention for weeks now) but I’ve had my hands full with the few gold miners I’ve found. PAAS is another one to possibly look at.

Q: Jesse, what will get you to say for now your thesis on kmi, soxs are not working out or the timing is bad? How much pain do you take on those? Why not trade out of them and buy back in when there is something positive? We need huge losses on the smh to get back to even on soxs and kmi looks like no bottom either. It is crazy how amzn, fb, goog are just soaring but aren’t we fighting the tape for now? What are your thoughts on the recent COT reports? They seem to be showing a bottom at extremes. The miners are acting better than gold which I think is a good sign. I would hope the Fed raises rates to get it over with. shouldn’t that help gold for at least it is out of the way?

J: Timing was certainly bad on SMH. It was way too crowded a short when I scaled in. With KMI it’s much harder to determine but it certainly wasn’t my best. In buying these things you have to be willing to take some short-term pain for long-term gain, though. That’s just the cost of being contrarian.

Q: I’d love to know what you think about investing in foreign or emerging markets via ETFs. Some of these markets look incredibly depressed, e.g., Brazil, Russia, Indonesia, Latin America in general, etc. ETFs like BRZU, RUSL, EIDO, or LBJ (respectively). To me they look like very attractive plays with a low risk/reward.

What do you think about these as investments for 2016? And is there anyone, e.g., Meb Faber?, whose opinion you trust on these matters, and whose writings might help me make a decision on this or that country/region?

J: I do like Meb’s work. His Global Value strategy is something I’d look into if I were you: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2129474

Star Capital provides global CAPE ratios and more here: http://www.starcapital.de/research/stockmarketvaluation

I don’t remember if he adds a trend-following component to the Global Value framework but I like the idea of buying the cheapest countries when they are in an uptrend. As of right now, however, I don’t see any that meet this criteria.

Hussman also recently did some interesting research on the correlation between our market and those in Europe you might find interesting: http://www.hussmanfunds.com/rsi/eurval.htm

Q: In your experience what causes sudden drops in the USD as evidenced by the otice of UUP yesterday? People taking large short positions? Is it typically a flash or is there follow through? Just wondering if the investors are large enough (assuming thst they have good research staffs) and their convictions are based on seriously anticipated future conditions… kind of like being on an island beach and seeing the water dissappear just before a sunami hits?

J: The long dollar trade is just way too crowded. When everyone is positioned the same way it just can’t work anymore.