kotika98

More ProShares Ultrashorts Tomfoolery

You should have read their prospectuses! They have a chart somewhere showing exactly how much the fund is expected to lag its -2x objective given a level of volatility. Another thing concerns the observation that it has optionality/time-decay properties. Indeed, the prospectus is clear that in order to set up the fund they are buying a daily resetting swap from an investment bank. That means they are buying a dynamical hedge for an option of strike at zero daily. IT IS AN EXPENSIVE PROPOSITION!

Thoughts on Mohamed El-Erian's 'When Markets Collide'

So, actually valuations on US stocks are more reasonable than most of those crazy emerging markets which can go up and down by 30-40% in any year. And the public debt is quite low, relative to the size of the US economy.

Thoughts on Mohamed El-Erian's 'When Markets Collide'

He has well earned his reputation, but clearly wrong on both US equities and bonds. Equities - because most american large companies are global corporations who DO benefit from world growth. And bonds because the US government is not heavily into debt - total debt to GDP is around 35% which is far far lower than every other industrialized country.

Debt_to_Nominal_GDP_Ch...
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