Investor Eric

ETF Update: Credit Default ETFs, High Put/Call Options Ratios, Backtesting, Short Gold ETN

Of all of these the only one that looks like a possible position would be WIP. You are basically playing for inflation in countries around the world as well as the currency. The biggest aspect to a US investor would be the currency effect as there is a nice diversity in other countries. England & France makes up 40%, so it is weighted towards solid countries, as well as a nice Brazilian chunk. Check the portfolio makeup on the ETF's main page.

Of course as with many of these new ETFs small volume is the norm and it will take awhile to track properly. But with the Fed cutting rates like it were confetti and an online bank only giving you 3-3.5% and dropping, basically diluting our currency, hedging into foreign bonds is a good hedge against volatile US markets.

My only question about it is when inflation hits the US, does the value of the underlying bonds represent a good safe haven or will it make the bonds worth less.

NAR Optimists Drubbed by their Own Dismal Data

This points to the elephant in the room in the discussion of housing.

Analysts all want to declare a bottom, NAR obviously too, even "value-based" wall st. investors want to believe. But disconnected from all their hopes and wishes is the fact that home prices depend on region. Arkansas and Iowa might have $200,000 houses, but NY and San Fran metro areas certainly do not. The talk of foreclosures being contained to "subprime" is just a talking point. Eventually even the metro markets are going to have to correct downward, and it will be in areas of mortgages other than subprime, and that is when the ral pain could be felt. Fixed rate loans will be solid and eventually will be the gold-standard for mortgages and loans.

But the big if in all this is the home equity loans that have pervaded our society and made homes into ATMs rather than just homes. If you live in a home it is not an investment. Period.

This perception that equity in home is meant to be built only to cash out on it a few years down the road is a silly and dangerous way to live and surprise, surprise America is knee-deep in this. Originally it was a creative way to pay for a child's college, but now it is mostly for keeping up with the Joneses.

Meanwhile we have a zero-savings rate(highest amount of debt in our history) while companies like China which hold bundles of our currency have a 40% savings rate.

This is a confluence of events that could cause real damage to the housing market, to buyer/seller perception, etc. Rental prices will skyrocket for awhile as less and less units are available until home prices come down some more and many of these exotic mortgages are refinanced into fixed rate mortgages. Then we might see a true bottom, but with banks tightening lending standards(actually a good thing longterm) and foreclosures rising, the market is not going to recover anytime soon.

Need Netflix Worry Over Apple's Movie Rentals?

In the future (read: 3-5 years) I think you will see the convergence of PC and TV more widespread and because of that Apple is setting itself up perfectly for that. For the short term Netflix is not in deep trouble because most people would rather have the actual DVD so they can watch it when they want, whereas the 24-hour window to watch a movie is just not a viable model. People want to watch their movies when they want, so that won't be enticing to pay $3-5 for a movie and only be able to watch it within that time.

One thing Netflix needs to work on is their "watch now" feature because from personal experience I have tried to get it to work 3 separate times since they've introduced it. And every time I get buffering problems, yet I have Verizon Fios, a fast computer, great video card, etc. No matter what I do there is ALWAYS a lag that makes me shut it off before I can finish watching it. And even bigger is the inability to make it true fullscreen as well as the poor video quality, it's like trying to watch a full movie on youtube...not fun. Apple's trailers are a testament to the quality they bring to the table and Netflix really needs to step up to the plate and improve the quality otherwise they will be on the losing regardless of their past successes.

Alt Energy ETFs: Lean, Green and Clean

PBD looks like an interesting ETF to check into more, I like that no one stock is more than 5.00% of the overall holding and that is First Solar(FSLR). It seems that the ETF is more heavily solar-based which is a plus in my book, wind has some good opportunities, but advances in solar seem like a much more feasible energy-solution short-term.

As much as nuclear has shaken it's "three-mile/NIMBY" bias lately and with the pebble-bed advancements it looks attractive as an investment, the reality is that it will be almost a decade before any of those reactors could come online and be a feasible alternative.

Nuclear is a possible great investment for someone on a long(20-30 years) investment timeline especially to be in on the groundfloor. But as we all know most people are too impatient for positive returns to invest heavily longterm.

But for PBW and PUW the rising oil prices will only make the underlying companies more attractive to investors and hopefully bring in more government subsidies into R&D.

Jump Aboard WisdomTree's Emerging Markets SmallCap Train

I have been keeping an eye on DGS since it was announced on CNBC not too long ago. The backwards projections are interesting to say the least and the dividends(and compounding dividends for longs) really sweeten the deal here. I think some of the more popular emerging ETFs are almost too exposed to China now without taking into account some of the more pure emerging markets like South Africa, Turkey, Chile, Malaysia. I am a bit skeptical on the heavy weighting towards Taiwan due to the geo-political environment in relation to China. But the otherwise balanced diversity in nations and sectors for this ETF more than makes up for that.