Illusional Delusion

Why Does Cramer Have a Beef with Leveraged ETFs?

Agreed. I forgot the part about the longs holding the actual stocks based off of the index. I think anyone who wants to crusade against leveraged etfs probably should just start something along wall street. its the people who use the tool, not the tools, that are at the center of any problem. Any calls to ban the tools is silly and will only prompt other such vehicles to be created.

btw, just because it is leveraged doesn't mean people only make money from it. People lose twice from it too, so it is ultimately just like another stock, just with a different tag on it. Ban it, and I don't think any instrument in the market is worth investing anymore, simply because the system, ie. SEC, has absolutely integrity to the game it governs.

On Dec 24 09:32 AM aitvaras wrote:

> The problem with ETFs either to the upside or downside is that they
> are baskets of individual stocks. Whatever is in the basket goes
> up or down regardless of whether it is a good stock or a potential
> bankruptcy issue just because it is in the Basket. Most of them are
> very small in Market Cap so exagerated moves occur in individual
> issues.
>
> An indivdual Investor with a buy and hold mindset, who buys say FSLR
> totally abhors the ETF that holds it simply because his purchase
> is subject to the whims of day traders who could not afford to short
> FSLR but can use the lower priced ETF to accomplish the same thing.

>
>
> Since, it works both ways, I do not really see what the problem is
> Over time.
>
> IMHO