Paulo

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    • Sun Mar 16th 19:56 PM | Rating: 0 0
      Commented on:
      Move Gradually in Bottom Searching
      If you think the bottom is here or the bottom is near and you are ahead on your hedge (say, one or more ultrashsorts) why not just put a stop loss at a level at which you would still be taking profits meanwhile doing the 50 now, 50 later, and final 50 later routine.
      If you think systemic disaster is lurking around the next corner, keep your hedges on (which, as a contrarian, you surely must have).
      View article »
    • Wed Mar 12th 23:55 PM | Rating: 0 0
      Commented on:
      The College-Educated Are Getting Richer
      What is your benchmark for screwed up?
      View article »
    • Tue Mar 11th 11:29 AM | Rating: 0 0
      Commented on:
      Central Banks, in Panic Mode, Announce Large Auction
      The central banks pulled out the defibrillator. Let's see what happens next.
      View article »
    • Mon Mar 10th 13:57 PM | Rating: 0 0
      Commented on:
      Ultra-Aggressive ETFs: Short-Term Bet Against the Bears
      The markets now seem to be testing the 52 week lows and this might be a very risky time to go ultralong. Worldwide, it looks no better.

      Sure enough, if this is a bear market, there will be a nice sucker's rally before it is over.
      View article »
    • Sat Mar 8th 20:54 PM | Rating: 0 0
      Commented on:
      Preparing to Hedge with UltraShort ETFs
      Okay, a great wall of silence.

      Let me rephrase my question, are there scenarios in which an ultrashort can look like, walk like, and quack like a Ponzi scheme??

      A Ph.D. or an M.B.A. (especially an M.B.A.) is not required to respond to this question.
      View article »
    • Fri Mar 7th 11:24 AM | Rating: 0 0
      Commented on:
      Canadian Banks Continue to Take a Beating
      Royal Bank of Scotland is RBS on NYSE
      View article »
    • Thu Mar 6th 18:35 PM | Rating: 0 0
      Commented on:
      Preparing to Hedge with UltraShort ETFs
      Being a bit of a contrarian (but not always a bear) I am now worried by the stampede to SDS on the part of retail investors, hedge funds, and even institutional investors.
      What I am worried about now is counterparty risk. I am starting to have doubts that massive numbers of lottery winners showing up on the third day of a crash like the one in 1987 (which I lived through but will stay on topic) will find a cashier at the wicket.
      None of these ultrashorts have a track record of successfully paying off all the winners in something like a 1987 event.
      Any good research out there on this??
      View article »
    • Thu Mar 6th 11:50 AM | Rating: 0 0
      Commented on:
      Look Around - The Credit Crunch Has Arrived
      So keep your hedges on, eh!!
      View article »
    • Fri Feb 29th 20:45 PM | Rating: 0 0
      Commented on:
      Creating a Hedge with ProShares Ultrashort QID
      So, if there is a really big sucker's rally, you sell and buy again!!
      View article »
    • Fri Feb 29th 13:41 PM | Rating: 0 0
      Commented on:
      Creating a Hedge with ProShares Ultrashort QID
      Hi Malkiel -- I have already sold more than half my SDS and there is a stop loss on the rest. I need the remainder as a genuine hedge and I will settle for just getting my money back if the stock loss activates. The market is declining as I write. I need the hedge, thank you.
      View article »
    • Fri Feb 29th 10:44 AM | Rating: 0 0
      Commented on:
      Creating a Hedge with ProShares Ultrashort QID
      Yep, things do not look good from where the private investor sits -- declining stock markets, declining house prices, declining interest rates, declining dollar and increasing inflation.
      I have also used an ultrashort to hedge (not that one) and have done so for more than six months. You have to keep a constant eye on it and you will get some surprises. I also have a stop loss on it just in case things go wrong with that hedge beyond my risk tolerance level.
      You might consider splitting the hedge investment between two ultrashorts, if this would provide better protection (with the idea in mind that it might also provide, given the intercorrelation of stock markets), to the international dimension of your portfolio.
      View article »
    • Tue Feb 26th 17:52 PM | Rating: 0 0
      Commented on:
      New International Dividend ETF from State Street
      There was an article on DWX that provided almost exactly the same information. I commented pointing to the currency diversification issue for U.S. investors. Specifically, 52% of DWX is allocated to three countries: Britain (24.91%), Canada (18,29%), Australia (8.79%). Okay, I'm Canadian, so no one is going to listen to me. Let me just direct you to a recently published article entitled 'Global Currency Hedging' published online by Working Knowledge of the Harvard Business School. Let me quote from the executive summary, and you can take it from there: "the euro, the Swiss franc, and a long-short position in the U.S. dollar and the Canadian dollar are negatively correlated with world equity markets. By contrast, other currencies such as the Australian dollar, the Canadian dollar, the Japanese yen, and the British pound are either uncorrelated or positively correlated with world stock markets". This has been true over the period 1975-2005, but whether going long the U.S. dollar and short the Canadian dollar might not work as well this time round.
      Anyway, from a Canadian perspective, I would buy DWX if they throw out Canada, Australia, and Britain. That is more what I want (and pleeze, not 25% Japan!!!).
      View article »
    • Fri Feb 22nd 21:05 PM | Rating: 0 0
      Commented on:
      New SPDR International Dividend ETF Offers Lower Costs, Higher Returns
      This is a brand new ETF and profound analysis based on experience cannot be expected of anyone, and it will not come from the issuers.
      Now, 52% of this ETF is the U.K.(24.91%), Canada (18.29%), and Australia (8.79%). And 22.5% is financials and 21% consumer discretionary (but 38.3 energy and materials).
      The Canadian and Australian currencies tend to go up or down more or less at the same time and if the pound sterling decides to decline at the same time, the objective of fully diversifying currency risk might be compromised.
      So the currency issues might, given certain alignments of the currency stars, signficantly impact performance.
      Also, if there is a severe recession or prolonged slowdown in the U.S., the stock markets in the U.K., Canada, and Australia will not decouple and, believe it or not, the U.S. dollar could actually rise significantly against these currencies (which is not what you want to happen if you buy this ETF) until the U.S. economy went into recovery and good times rolled again.
      The volume is not there yet on this new ETF, but it deserves better than that.
      View article »
    • Mon Feb 18th 17:46 PM | Rating: 0 0
      Commented on:
      ProShares UltraShort China ETF: Caveat Emptor!
      I purchased 400 shares of Proshares Ultrashort SDS on August 9, 2007 at $55 and they have, of course, bounced all over the place within a range (if you include intraday) of approximately between $50 and $65. Given the volatility and the risk, the payoff has not been worth it at all. When the going gets tough, you have to watch what is going on intraday like a hawk.
      Anyway, I am down to 150 shares having sold the remainder between $62 and $64. But again, not really worth the effort and the risk.
      However, I hung on to the 150 to hedge a purchase of 200 KBE close to the current trading bottom and on some days, to my horror, both KBE and SDS go up!!
      You can also rationalize buying the S&P at a time which seems reasonably good to you using SDS to partially hedge.
      But no, I would hesitate to do this again and a non-leveraged short position for hedging purposes seems a saner way to do things.

      View article »
    • Tue Jan 15th 15:54 PM | Rating: 0 0
      Commented on:
      Estimating the Risk in Citigroup Stock and Bonds
      Well, I just put my money where my mouth is -- just bought KBE (fully hedged by SDS which I already owned)
      View article »
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