ikkyu

106 Comments

    • Currency ETFs: Consider the Commissions [view article]
      Greeting Ray,

      Fair enough my friend.... different strokes and all. Funds like DBV and JEM may be useful, if expensive.

      If there is a bundle to be made, carry trading is likely the best way to do it IMHO.

      Best wishes and thanks for your opinion.

      john       Aug 28 06:58 AM
    • Currency ETFs: Consider the Commissions [view article]
      Greetings,

      I agree with the original poster on these costs being absurd. Any medium to long term forex strategy is going to be better accomplished with a forex broker. ETF's are a primitive way to get such exposure.

      I am not sure where Ray is getting his quotes from. I show a spread of around .007% for EUR/USD and .039% for USD/MXN. That is more like 5.6x than 100x, my friend.

      For a one year holding period costs are 57x cheaper using the broker OANDA for EUR/USD than the ETF FXE. That is not counting the bid/ask spread on the ETF or commissions, which could jack this up considerably. You have no further costs after that (outside of interest on a negative carry) no matter if you hold for years. So there is virtually no comparison cost wise.

      See spreads and carry interest for Oanda here:
      www.xrof.com/index.htm...

      These ETFs are a scam. This is the cheapest market to trade in the world! Hell, SPY has what like .17% expense ratio?

      Also you didn't mention the tax advantages. If you document yourself as a professional trader, you get 60/40 (LT/ST capital gains) like for futures trading.

      Here is another article similar to yours:

      www.thefinancialwhiz.c.../

      I like Ray, he seems cool and quite thoughtful, but ETFs are blunt, expensive ways to trade currencies not matter how long your holding period.

      Best wishes,

      john       Aug 27 11:17 PM
    • ETF Update: Pharma ETFs, Commodity ETFs, Carry Trade [view article]
      Greetings,

      You have repeated Hougan's error. DBV is leveraged 2:1. The prospectus probably should be read by "professionals.&q...

      Cheers from Osaka,
      John       Aug 25 11:20 AM
    • DBV: Unlevered Carry Trade ETF for the Masses [view article]
      My friend, you might read the prospectus. It is levered 2:1, but I agree its a nice fund.

      Cheers,
      john

      Aug 19 07:18 PM
    • Currencies: Dead Cats and Yapping Dogs [view article]
      Greeting Ray,

      Thanks for the ongoing articles about FX carry. It is amazing to see how little info there is out there for such an awesome strategy. You are about the only mainstream writer that details it.

      Also, thanks for alerting us to JEM, not sure how i missed that.

      I think that you will find JEM and DBV have strong correlation in a rising to high volatility market, so i am afraid that i don't share your diversity views with respect to regions and countries. Just compare USD/TRY and NZD/JPY over the last couple years to see what i mean. Many people look at fx carry as a trade with a risk premium because the reversals are so violent. I see FX carry collectively as being either ON or OFF.

      I also do not believe the principle moneymaking of FX carry lies in collecting interest, but then i only employ pairs with a spread >3%.

      Nonetheless, i share your enthusiasm. And look forward to more thoughts.

      Cheers from Osaka,
      john       Aug 19 10:05 AM
    • Foreign Currency Trading: Can Investors Profit From Trends? [view article]
      Mr. Swedroe,

      Thanks for your response. If markets have a risk premium then they have an inherent uptrend. And that is what buy-and-holders are exploiting. Interestingly, risk premium is generally the explanation for why carry trading is persistent.

      Cheers from osaka,
      john       Aug 10 03:12 AM
    • Bond Ladders vs. Layering with Bond Funds [view article]
      Greetings Mr. Shaw,

      You are as gentlemanly, as you are informative. Boy, ETFs come out so fast it is hard to stay abreast. I hope it sees some volume too.

      Do you have any recommendations about good bond brokers outside of Treasury Direct, say for Zero coupon bonds and corporates? There is an article on here by Larry Swedroe about the hidden mark-up on bonds in the secondary market that was a real eye-opener:
      seekingalpha.com/artic...

      Thanks. Cheers from Osaka,
      john       Aug 10 03:07 AM
    • Bond Ladders vs. Layering with Bond Funds [view article]
      Nice article, as always. I think there is a Ryan index laddered 1-30 treasury ETF, ticker PLW. This may simplify things considerably.

      cheers,
      john       Aug 08 10:29 PM
    • A Simple Momentum System for Beating the Market [view article]
      Puddi said: "Most such systems will make some money some of the time. If any system exists that makes good money all of the time, its inventor isn’t going to be writing a book about it."

      No trading system purports to make money all of the time. In fact, you can have less than 50% winning trades and can still make money. I suggest you read up on some basic trading theory.

      Rudi said: "You didn't reveal any scientific proof because you can't."

      Ah, dude first chill and then look at his peer-reviewed published academic paper! This is one of the most documented, pervasive effects in finance and you guys act like Mr. Faber is some kinda snake-oil salesman!!

      Mebane, maybe these comments are an indicator as to why the momentum effect keeps on working....

      Cheers from Osaka,
      john       Aug 08 12:29 AM
    • Yen Cross Basics [view article]
      An easier rule might be: any carry trade with more than a 3% interest rate differential is going to have fat tails; if you can't handle this, stay out. There is an escalator up and an elevator down. Entering after, say a six month volatility spike, will increase your safety getting into the carry.

      Cheers from Osaka,
      john       Jul 28 06:33 AM
    • Why Congress Blames Index Speculators [view article]
      Great analysis, Mr Zigler. That is one of the simplest and most compelling on the subject (out a huge pool of articles).

      Cheers,
      john

       Jul 23 09:04 PM
    • Overselling the Case for Indexing [view article]
      Even as an indexer, i welcome your skepticism. Isnt it hard to have a market if people aren't over and underperforming the benchmark? Why has indexing become so cult? The Vanguard Diehards forum reads like an AA meeting.

      cheers,
      john       Jul 15 08:51 AM
    • Does the VIX Need To Spike In a Climactic Low? [view article]
      Greetings,
      I am intrigued by your analysis. I might add that options trading itself has probably changed in the last 22 years, which would have some bearing. Also, volatility on carry trades, 20 year bonds, emerging markets, efa and so forth might suggest that fear isn't quite "close enough". Granted many weak hands have been shaken out, but this is a hard trade being either long or short volatility (as you said).

      Cheers from osaka,
      john       Jul 07 09:03 AM
    • Strategies for Currency Investors [view article]
      nice post. I would recommend carry trading as the default strategy and maybe go from there if you are ambitious. Also OANDA is the best retail broker in my opinion. The have no minimum size trading lot, which has huge ramifications for P/L. You can make a one dollar trade if you wish. Oanda is a favorite for carry traders.

      For instance, you could mirror the DBV strategy with no fund-fees just the spread. (also DBV is 2X fund).
      cheers from osaka,
      john

       Jun 16 04:15 AM
    • Investing in Non-U.S. Stock Markets [view article]
      Greetings. I always enjoy your posts.

      The world map appears to have an incorrect key. It seems the emerging and developed non-U.S. markets are switched.

      Cheers from Osaka,
      john       Apr 28 09:45 AM
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