F. Bradeen

Tuesday Outlook: Commodities, Global Markets

David, Could these Dark Pools be where all the low/missing volume is occuring?

Updated Case-Shiller 100 Year Real Estate Chart

Now mind you, I have never been a fan of real estate, but anybody, including Schiller who I do respect, tells me housing prices went sideways from 1945 to 1995 has to be looking at the data in a funny fashion or smoking some funny stuff to say the least.

How to Use Leveraged ETFs to Your Advantage

You have more problems with your analysis than those listed above.

First, both SSO and SDS have had large distributions. Have you taken them into account for your percentage gains or losses over time.

Second, you only gave half of the position. A bear call spread on SDS would be, in effect, a bull call spread. Is that what you want? Be specific. What is your "Bear call spread" position using SDS call options.

The half position you gave seems to me not worth the risk. A gain of $2.25 with the risk of a $6.75 loss.

A Simple (and Impressive) New Three Factor Return Model

Great. Now make an ETF using it. Maybe I might, just might, invest in it.

Absurd Inverse and Leveraged ETF Product Whining (Updated)

I love these leveraged and inverse ETFs. They allow me to hedge my portfolio and actually decreaswe risk. E.G if one needs to have a short position to hedge a long that he likes, he can lever it with a double, even triple inverse fund with 1/2 to 1/3 the funds needed for a simple inverse fund and now can be done in a regular IRA account. I agree with you, they put us small guys on a level playing field with the "black box" hedge funds who have been doing this for years.

Goldman's Programmed Trading Is Back with a Vengeance

This is what our TARP (taxpayer dollars) is for!!??

Still Wary of Those Financial Weapons of Mass Destruction

It is interesting that Warren Buffett complains about CDS (as he is correct that they are weapons of mass distruction) but that doesn't prevent him from profiting by them via ownership In Goldman Sacks. One if the biggest dealers in CDS. That's two faced in my opinion.

Checking in on the Current State of Brazil's Economy

Nice Job. I would LOVE to see the same analysis for the United States. Especially the Capital Adequacy Ratios on the banks.

The Thing About Hedge Funds

Most of these hedge funds are black boxes. Why anybody in their right mind would invest in them is a mystery to me. And especially after the Bernie Madoff affair which was precided by the LTCM affair.

Debunking Wall Street's New Fairy Tale

That's right. Too big to fail means too big to exist.

The Reverse-Convert Scam

I know what happened in Oct. 1987 with naked put writing. One loses one's shirt in the operation. Much more than the money on deposit. This obviously should be outlawed.

Precious Metals Update: Spring 2009

No positions! Why not?

Don't Fight the Guys Who Have the Power to Print Money

Yes. I does bother me that the FED has pumped all this money into the banks with trading departments attached. Their trading departments then go out, using our money to pump up stock prices, profiting thereby.

And Yes, money must ultimately go someplace and it seems to be going into stocks and commodities at least for the moment. So your analysis may be right but only time will tell. I suspect there are a lot of land mines still to go off as the months pass. We do live in interesting times. Don't we?

Thoughts on Portfolio Construction and Diversification

What you said deserves a reply. Way back when I started investing I studied the extensive data supplied by Fisher and Lorrie. What I came away with was that if you did not pick the the top 5% of stocks, you ended up underperforming the market over any given year. Subsequent data showed that over longer term periods, your odds were even worse.

No, even with the losers included, a portfolio of ETFs will outperform 90 % of investors trying to beat the market by picking individual stocks.

Thoughts on Portfolio Construction and Diversification

First. Anybody who has to hold 35 to 45 different positions may as well go out and find 5 good ETFs instead. 35 to 45 positions and you are running a mutual fund.

The second problem as you stated when markets go down correlations approach 1.0 make diversification worthless. unless you hold cash or near cash instruments. You need some kind of "uncle" point to get you into cash postions when all hell breaks loose. Portfolio diversification is NOT going to do it for you.

Third, I always laugh at these programs that offer a diversified portfolio. What you do is input your "expected" future return and it pumps out a portfolio for you. However if I know what the future returns are going to be, I don't need the portfolio optimizer program. Even Markowitz, who invented portfolio optimization, puts 50% in stocks and 50% in bonds, which again could be done with 5 ETFs.

No portfolio optimization program can work in all markets and the trick is to know when to abandon it. anybody who was religiously using portfolio optimization last year saw 50% of their net worth wiped out.