Missing_Link

Leveraged ETF Ban Spreading Like the Flu

On Jul 28 04:15 PM GadflyOnTheWall wrote:

> Gentlemen (and ladies, if there are any),
>
> Understand what is happening here. Those who understand the rewards
> and risks of the leveraged ETFs understand them for what they are:
> a bet on the direction of each market represented, and allows us
> to invest alongside the hedge fund managers, thus leveling the playing
> field.
>
> Having said that, I believe that the reason that the reason that
> these are being taken off the table is because Wall Street is getting
> ready to fleece the masses (eg. a correction in the markets) and
> thus they do not want to share the winnings (on the short side) with
> the little guys.
>
> Put options, anyone?

Well said!

And unfortunately, those who make the "ban leveraged ETFs" argument are playing right into Wall Street's hands.

Leveraged ETF Ban Spreading Like the Flu

On Jul 28 04:03 PM IHateFraud wrote:

> Just curious...Does your system say there is more risk in BUYING
> FAZ now or FAS over the "near term"...No details and I don't want
> your secrets. Just which one is primed to BUY and which one to avoid
> now. Since they're "inverses", your system should always include
> one and exclude the other, correct???

Yes, that's correct. Sometimes it shows one as a Buy, sometimes the other, and oftentimes neither one. Never both at the same time.

My system gave FAS a strong Buy signal this morning and I bought $180K worth at the open. It's done well despite the dip at the open. I won't know whether to sell or hold tomorrow morning until I check my scan again later tonight.

Leveraged ETF Ban Spreading Like the Flu

On Jul 28 03:45 PM IHateFraud wrote:
> A "good trading tool" does not have a built-in "decay", unless you
> short the shite out of it day after day after day, NEVER covering.

No, no, no, no, no. The decay is MINIMAL unless you hold it for well over a week.

On Jul 28 03:45 PM IHateFraud wrote:
>
> I think we can all agree that FAZ and FAS each have a built-in decay,
> correct? I mean, -63% and -88% for 2009 when they're SOLD as inverses
> pretty much DEFINES them both as SUCKER BETS...

Dude, when are you going to get it into your head that you're not supposed to hold these for that length of time?

Of COURSE they're sucker bets if you hold them an entire year. We've already gone over this many times. It's irrelevant to traders who know that you're not supposed to hold them for anywhere near that length of time.

Their performance over an entire year proves NOTHING about the ETFs themselves.

If you say they should come with a warning, FINE.

If I have to sign a waiver before Ameritrade lets me use them, FINE.

But the idea of banning them outright is outrageous.

On Jul 28 03:45 PM IHateFraud wrote:
> Now, do you really believe that a good trading tool to purchase is
> one with a built-in decay?

If the decay is essentially irrelevant over the time frame during which my trade occurs -- 1 to 5 days -- then YES, they're excellent trading tools, and I embrace FAS and FAZ wholeheartedly.

And especially when there's NO OTHER WAY I can get those kind of returns ... and Wall Street always can, no matter what ... then they're as dear to me as my right and left eyes, and I'd prefer to keep them in their sockets, please.

Leveraged ETF Ban Spreading Like the Flu

On Jul 28 03:28 PM IHateFraud wrote:

> Of course you're incorrectly assuming you are right on trend 100%
> of the time. Say you're better than avg...Maybe right 60% of the
> time. So you "accept" 2.7X instead of 3.0X when you're correct and
> you suffer about -3.5% instead of -3.0% when you're wrong.
>
> Have you been trading for long? I mean, you know, with REAL MONEY?

Yes, I've been trading for quite some time.

Before I knew what I was doing, I lost $100K in a single day with a poorly-timed bet on SDS, TZA, and BGZ.

Instead of blaming the ETFs, I blamed myself, admitted that I had no clue how to use them properly, and worked hard to learn how to time these trades properly, and over the last month I've made back that entire $100K and quite a bit more.

My system is highly tuned to ensure that my risk/reward ratio favors high rewards and avoids times when the ETFs have the potential for the worst losses. Though my win/lose percentage, both historically and in practice, is only between 60-70%, my system is tuned to keep me in leveraged ETFs only at times when my potential gains are much greater than my potential losses.

So I am only trading leveraged ETFs when their upside is MUCH larger than their downside. Because of the way I use the indicators, they would not typically decline nearly as much when I lose as they would rise when my system makes the right call, because my system is heavily biased away from times when the ETFs have serious downside risks.

So the 2.7% vs. -3.5% doesn't really apply for me, because my system rarely gets only 2.7% gains and rarely takes losses as high as -3.5%.

Again, I urge you to think twice about exactly who you're hurting when you go tilting at these windmills. They may not be quite the ogres you believe them to be.

Leveraged ETF Ban Spreading Like the Flu

By the way, "IHateFraud," if you really hate fraud so much, I'd urge you to stop and consider for a moment that the REAL fraud is what the Bespoke chumps are trying to do here -- keep good trading tools out of the hands of ordinary investors, so that only the hedge fund managers on Wall Street will have access to them.

Leveraged ETFs require a warning, not a ban.

Preventing their use outside of Wall Street can only create an uneven playing field and further undermine the distrust between ordinary investors and powerful financial institutions.

Leveraged ETF Ban Spreading Like the Flu

As for how to time leveraged ETFs properly, I use a proprietary algorithm for that, but you can start by checking out the technical indicators at www.freestockcharts.com/ or check out StockFinder at www.stockfinder.com/

Leveraged ETF Ban Spreading Like the Flu

Hey "IHateFraud," here's your homework assignment: read this.

seekingalpha.com/artic...

Leveraged ETF Ban Spreading Like the Flu

On Jul 28 03:04 PM IHateFraud wrote:
> Do the research...Count how many DAYS FAZ and FAS each ACHIEVED either
> > or = 3X movement of RIFIN when correct and suffered > or = 3X LOSSES
> when incorrect...Then your eyes will be MAGICALLY OPENED. They are
> designed to DEFRAUD...

Nonsense!

You, I'm afraid, are the one who has not done his homework.

I don't care if the Direxion funds don't get 3x leverage. If I can get only 2.7x leverage, how else would I get those returns in that same amount of time? Seriously, what else could I do?

Why are you so insistent that individual investors should NOT have access to tools that Wall Street will have access to no matter what?

All you're doing is making my life miserable. Go cut off someone else's oxygen supply, please, not mine.

Leveraged ETF Ban Spreading Like the Flu

* sorry, hit "Submit" accidentally before finishing my previous post

... Sure, it's not EXACTLY the 3% it claims it attempts to achieve, but it's a hell of a lot better than if I'd just bought SPY or some other non-leveraged ETF during that time.

Leveraged ETF Ban Spreading Like the Flu

On Jul 28 03:04 PM IHateFraud wrote:
> So how can any MORON claim they "know how to correctly use" FAZ and
> FAS when you ALWAYS get less than you should when you're right and
> you PAY MORE than you should when you're wrong??? You're just as
> BIG A MORON to fall for that lie as anyone who buys one of these
> and holds it thinking it will come back...

Are you nuts?

Look, I never hold these ETFs for more than 4-5 days. Sometimes only 1-3 days.

I buy BGU at the right time, and if large-caps go up 1%, I make close to 3% in the 3-5 days I hold it.

I buy TNA at the right time, and if small-caps go up 1%, I make close to 3% on those in the 3-5 days I hold it.

What's so hard to understand about that?

Where's the "fraud" you keep screaming about?

Sure, it's not EXACTLY


> Do the research...Count how many DAYS FAZ and FAS each ACHIEVED either
> > or = 3X movement of RIFIN when correct and suffered > or = 3X LOSSES
> when incorrect...Then your eyes will be MAGICALLY OPENED. They are
> designed to DEFRAUD...

Leveraged ETF Ban Spreading Like the Flu

On Jul 28 02:37 PM IHateFraud wrote:

> The POINT IS:
>
> THERE SHOULD BE NO "DECAY" in a trading vehicle...

This is the basis of your argument, and it is fundamentally flawed.

I agree that an *investment* vehicle should not "decay."

However, short-term *trading* vehicles do often inevitably decay if they involve the use of leverage, and the greater the leverage, the greater the decay. So long as traders can get minimal exposure to decay on a day-to-day basis, then these ETFs are excellent short-term traders' tools ... which is all they were ever intended to be.

If you don't like 'em, don't use 'em. It's as simple as that. But if you think you're going to keep ME from using them, you've got another think coming.

Leveraged ETF Ban Spreading Like the Flu

On Jul 28 02:37 PM IHateFraud wrote:
> The POINT IS:
>
> THERE SHOULD BE NO "DECAY" in a trading vehicle...And if it CONTINUES
> DAY AFTER DAY, WEEK AFTER WEEK, MONTH AFTER MONTH, then it is SIMPLE
> FRAUD!


NO!!!! The point is, YOU'RE A FLAMING IDIOT!

If you don't know how to use them properly, then you're a MORON!

Also, stop using ALL CAPS!

It makes it read like you're SHOUTING!

And makes people think you're STUPID!


>
On Jul 28 02:37 PM IHateFraud wrote:
> THESE ARE FRAUD VEHICLES and nothing more than another way for Wall
> St to RIP-OFF Main St. It's like a car dealer saying, "Buy this
> car because when we designed it our GOAL was to achieve 40mpg some
> days when you drive it." So you BUY it and find that not only do
> you NEVER get 40mpg on ANY day you drive it, but there's a design
> flaw that LEAKS GAS from the tank even when it's PARKED and the BEST
> MPG you've ever gotten on any day is 10mpg!

You couldn't be more wrong.

Look: Wall Street is going to use tools like this no matter what, and many of them will use them successfully, just like I've (finally) learned to do with leveraged ETFs.

If we ban leveraged ETFs, WE NO LONGER HAVE A LEVEL PLAYING FIELD!

It means the evil bastards on Wall Street can now access tools that individual investors can't touch.

Do we really want that? Do we really want Wall Street using

I have no problem with you not using leveraged ETFs. If you don't trust them, fine! But don't ban them; I NEED THEM!

But by what right would you prevent me from using tools that I know how to use properly? That just puts me at a disadvantage against the Goldman Sachs of the world. They've taken enough of my money already; leveraged ETFs are one of the few tools I have left to fight them.

Leveraged ETF Ban Spreading Like the Flu

Amen! Same thing here. Lost $100K on leveraged ETFs.

I have no one to blame for it but myself, and BPYHO, I salute you for your responsible attitude.

I wish the Bespoke clowns had anywhere near your level of insight and understanding.


On Jul 28 12:12 PM BPYHO wrote:

> As a person who has lost about 4k from these I have to say - it's
> my own damn fault. I didnt pay attention to the warnings back in
> March when I first started buying them. However, now that I know
> the correct way to use them, I love them and would be VERY disappointed
> if some idiot in Washington tried to limit their availibility...

Leveraged ETF Ban Spreading Like the Flu

Bespoke, you incompetent morons, why in the hell are you cheerleading those who want to ban leveraged ETFs? Leveraged ETFS are BRILLIANT for those who know how to use them properly.

Of COURSE you're not supposed to hold them for more than a few days! That hardly means they require legal protections.

Months-long graphs like the ones you show here only prove that you're intentionally trying to mislead people about their performance, and trying to cheerlead lawmakers into believing that leveraged ETFs need to be made unavailable to ordinary investors like myself, and that only Wall Street types like yourselves have the knowledge required to use them properly.

What absolute garbage!

You can have my leveraged ETFs when you pry them from my cold, dead TD Ameritrade account.

The Best All-World ETF: ACWI vs. VT

> Disclosure: Our money management affiliate, Capital Cities Asset
> Management, was the first to buy 100 shares of ACWI on the day of
> its launch, and we still hold those shares today.

Wait, what?!?

You held on to your ACWI shares through the July '08 slide and the October '08 downturn?

A money manager who doesn't know how to set stop limits ... FAIL.