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Eric Peterson

Eric Peterson
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  • UVXY: How One Can Profit From This VIX ETF [View article]
    If you can track the VIX with your "tool", and it doesn't lose value over time while the VIX stays flat, then you will be a billionaire. Congratulations.

    Because all you have to do is be long your "tool" and be short an ETF such as VXX. Guaranteed free money. Let us know when you make your first billion!
    Dec 20, 2012. 11:47 AM | 4 Likes Like |Link to Comment
  • 2 Startling Delusions About the Current Bull Market [View article]
    I don't think Lou is promoting any particular position right now. I don't think he says anywhere in the article that people should buy right now.

    He is merely arguing against two common misconceptions: 1) People think the market hasn't done well the past 3 years, and 2) People think that it's too late to get into a bull market if it's been going for a few years already.
    Oct 29, 2012. 08:17 AM | 4 Likes Like |Link to Comment
  • Gold Prices Could Double...or More than Double [View article]
    As for the title "Gold Prices Could Double...or More than Double" ... yes, or gold might not even keep up with inflation ... as it has not done over the past decades. You could buy more bread or milk with an ounce of gold 30 years ago than you can now.
    Dec 30, 2008. 07:49 PM | 4 Likes Like |Link to Comment
  • UVXY: How One Can Profit From This VIX ETF [View article]
    Your first two tables are correct. They show one reason that UVXY loses money over the long-term. This is true for all of the 2x and 3x leveraged ETFs, not only those based on the VIX. But I don't believe that's called "contango" as you say in the introduction to the tables.

    Contango is when futures contracts are higher-priced in later months. For example, the December contract is higher than the November contract. This is true for VIX futures, and UVXY is forced every month to roll over its futures contracts from lower-priced months to higher-priced months. So UVXY loses value over the long-term because of futures contango. But that's not what is illustrated in your first two tables. They show another reason. I don't know if that has a name. I would call it "never buy a leveraged ETF and hold it for more than a few days"!

    Even VXX, which is not leveraged, and does not lose money because of the process shown in your tables, does lose money long-term due to the contango in the futures market. It also has done several reverse stock splits.
    Nov 8, 2012. 08:46 PM | 3 Likes Like |Link to Comment
  • What Is In The Silver? [View article]
    Very interesting article and I like your approach, analyzing the correlations. But I think one year is much too short. I think the analysis should at least contain the 2008 crisis, so a 5-year correlation would be much more interesting.

    Phrases that you are testing, such as "safe haven" and "inflation protection" certainly are not used by investors with a 1-year trading horizon. Thus the need for a longer time period for the study.
    Feb 8, 2012. 07:55 AM | 3 Likes Like |Link to Comment
  • Don't Miss the Coming Gold Bull [View article]
    Everybody and their grandmother is shouting about how gold is going to double or triple. Do markets usually do what everyone expects?

    I'm short gold for the short term (one or two months) until I see a few people saying that gold will not double.
    Dec 31, 2008. 10:22 AM | 3 Likes Like |Link to Comment
  • Gold's 12-Year Run May Finally Be Over [View article]
    If all these banks are predicting the gold bull market is over, then I'm buying! Since when has a consensus opinion of banks and brokerages been correct?
    Dec 11, 2012. 06:18 PM | 2 Likes Like |Link to Comment
  • Modern Portfolio Theory 2.0 - The Most Diversified Portfolio [View article]
    tbates757: The past 10 years have had a wide range of events. Stocks had a major rally 2002-2007 and then a horrendous correction of more than 50%. It's hard to imagine something in the next 10 years that is more drastic.

    Real estate also had a nice period and then a horrendous drop. Again, hard to imagine the future holds anything more dramatic.

    The only problem with the last 10 years might be the large number of bond funds in the mix (4 out of 9 funds used in this portfolio), because interest rates have been steadily dropping. That could change, and rising rates haven't been included in this backtest.

    Also gold has been in a major rally the past 10 years, so of course any portfolio that includes gold has done better than a portfolio that doesn't include it. It's possible gold won't keep rallying, and its inclusion will hurt portfolio performance.

    But the main answer to your question is nobody can predict the future and it's not possible to forward-test, only back-test!
    Dec 1, 2012. 06:09 AM | 2 Likes Like |Link to Comment
  • Gold Prices Experience A 'V' Shaped Bounce [View article]
    I don't see this big drop on my futures chart for December Gold. Nothing below 1745 on Monday, and the futures trade for 23 hours and 15 minutes every day. Seems like some fluke in the spot market chart, not a real drop in prices.

    Even looking at your chart, it says "Last Price 1749.40" which doesn't match the last point on the green line. Data bust from your quote vendor.
    Nov 29, 2012. 12:24 PM | 2 Likes Like |Link to Comment
  • The U.S. Dollar, Obama And The Gold Standard [View article]
    Well, if you planned to live off of your social security when you retired, and don't have any savings, you have only yourself to blame.
    Nov 26, 2012. 02:13 AM | 2 Likes Like |Link to Comment
  • VIX And VXX Fall As The Markets Fall: Confused? [View article]
    NickyCee has 70% of all his investments long VIX, an investment that loses 4% every month due to roll. I guess now we know who funded all the profits made by holders of XIV!
    Nov 10, 2012. 08:46 PM | 2 Likes Like |Link to Comment
  • S&P 500 Most Heavily Shorted Stocks [View article]
    Bespoke: How about an analysis of how the top 25 shorted stocks perform?

    For example, what is the average return on these 25 stocks during the 3 months or 6 months after the data is released, compared with the SP500? Are there any ETFs or mutual funds that keep a portfolio of the most shorted stocks, adjusting holdings each month when the new data is released?

    The data by itself is not particularly useful unless there is a study on how these stocks perform.
    Oct 28, 2012. 02:33 PM | 2 Likes Like |Link to Comment
  • S&P 500: 2012 Vs. 1987 [View article]
    THE major difference between October 1987 and now:

    30-year T-Bonds were paying over 10% interest! Now they are paying under 3%. So back in 1987 you could sit out of the stock market and make a very decent return on your money. There was lots of motivation to dump all your stocks at any sign of weakness. Thus the crash.

    Now you can't get much sitting out of stocks, especially in CDs or money markets, which pay nothing.
    Oct 27, 2012. 07:50 PM | 2 Likes Like |Link to Comment
  • LTRO: Savior Or Distraction? [View article]
    Seems a little strange to define in detail the very basic terms 'bank run' and 'lender of last resort', but not to define LTRO. I still don't know what those letters stand for after reading the whole article. I guess I can go google it, but shouldn't have to if the whole article is about LTRO.
    Feb 29, 2012. 05:12 PM | 2 Likes Like |Link to Comment
  • Be Aware Of Santa Claus Rally, New Year/Year End Indicators [View article]
    All of these indicators are a form of "cheating", because they include the up period into the prediction. For example, "ïf January is up, the whole year will be up" is kind of like saying if a football team is up 14-0, it is likely to win the game. Which doesn't say a lot. The only true test of January's predictive power is how the market does in the remaining 11 months, not how it does for the whole year. Same for the first 5 days of January predicting January. It should be used only to predict the remaining days, not the whole month. You can't buy the market at the beginning of January after seeing how it did the first 5 days!

    Would be nice to see if these old cliches really have predictive power in the proper way, not using part of the period to predict the whole period, but to only predict the future.
    Dec 25, 2011. 11:17 AM | 2 Likes Like |Link to Comment
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