Here's How To REALLY Profit From Greece's Implosion

This story from MarketWatch’s London bureau intrigued Outlaw.

First, they introduce the subject and convince you that Greece will, indeed, default within the next year or so: “You don’t exactly need a crystal ball to know what the biggest event in the financial markets of the next 12 months is going to be: Greece defaulting on its debts.

This week Standard & Poor’s cut its rating on the country to CCC, the lowest of any nation in the world. Only last week we learned that Greek industrial production was down 11% year-on-year. Unemployment has risen 40% over the past year, and now stands above 16% nationally. A year on from the European Union and International Monetary Fund ‘rescue,’ Greece is slipping into 1930s-style depression.”

But how to profit?! “Forget all you’ve read about it being a catastrophe for the markets when it happens, however. Only things that nobody really forecast make prices move in any dramatic fashion. A Greek default is about as unexpected as Rafael Nadal making the finals at Wimbledon this year.”

Only a Brit would compare the dire economic collapse of a nation to Wimbledon.

OK, but seriously, here are the reporter’s interesting suggestions for how to blissfully profit from Greece’s misery:

1. He suggests buying German bunds, and selling anything you have in the DAX index. Reason: “The new deutsche mark that will emerge from the wreckage will be one of the strongest currencies in the world.” Agreed; the euro will soon fall apart.

2. Sell the Swiss franc — for the same reason. Investors will have the deutsche mark again; the Swiss won’t hold the ‘monopoly’ on a strong European currency any more.

3. Sell the Belgium index. (Ha, as if I would ever buy anything in the Belgium index to begin with… I’m a US investor, not a European equities collector.)

4. Buy European travel companies, and also sell U.S. bank stocks (I disagree, but OK). He also suggests buying the U.S. dollar.

I obviously don’t agree with all of his strategies, but it’s still an intriguing piece — and I’m sure at least one or two of these approaches will make investors good money, assuming Greece isn’t saved.

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