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46 Comments

    • The VIX Is Less Than Perfect for Market Timing [view article]
      The VIX may be a great short term bottom indicator in an overall bull market, but when you're going thru a long drawn out market decline like we're in, most smart players arent buying puts 30-days out. They're shorting the Q's, SPY, XLF, etc. Something like 50% of the Q's and SPY shares are short and who knows what the XLF is. That's the hedge du jour now. Jul 29 09:11 AM
    • Financial Bottom, But Where's the VIX Fear? [view article]
      This may be a little off color, but does anyone know exactly how the heavily traded (shorted) ETF's such as the QQQQ, SPY and the XLF contribute to the downward trend? Since these 3 ETF's are typically in the top 5 volume leaders and they are being heavily utilized to short and hedge by institutional and individual investors alike, I'm wondering exactly how they work. i.e. I know the ultra short funds do NOT actually short the component stocks but use futures and short swaps. So when you short say, 500,000 shares of the XLF, does anybody know if the fund goes out and actually shorts the component stocks or are they also using futures and options? Since they're not doubling the direction of the components, I'm wondering if they even need to use derivatives. My guess is a few times during the trading day, the fund offsets the buys and sells of the fund and then goes out and buys or sells the component stocks (not shorting) to adjust. i.e. they don't care if someone is shorting or just selling their long position, they're just trying to keep balance within the fund since its easy to keep track of the 'value' of the fund on a real time basis, but it seems to be harder to keep track of the buys, sells and shorts. Does anybody know? Jul 23 09:24 AM
    • Just How High Will the VIX Spike? [view article]
      I don't think the VIX is going to be a good indicator this time around for 2 reasons. One, this bear market will be known more for its duration than one capitulation sell-off. Buying puts is more for immediate protection rather than long term protection so we may not see that superspike, only many 'mole hills'. Second, its so much easier now to hedge or short with ETF's and you get immediate protection rather than having to pay a premium for options. Look at the short interest in QQQQ, SPY, XLF and the proliferation of ultra-short ETF's. I calculated that 50% of the outstanding shares of the QQQQ are short. THAT's where the new indicators should focus for market sentiment. Jul 17 09:11 AM
    • June ETF Short Interest Surges [view article]
      According to ETFconnect.com, there are 476,300,000 shares of the SPY. If there are 197,400,000 shares short then that represents 41.4% of the outstanding shares. That is a huge percentage though the question is how that compares historically. Jun 28 03:03 PM
    • VIX Is Complacent, Despite New 2008 Dow Low [view article]
      Why buy put options when you can easily short the DIA, SPY or QQQQ? You get instant protection whereas options may not give you a 1 to 1 hedge for another couple hundred points down or so. Obviously, investors are choosing to short ETF's as a hedge. I would like to see a new index which takes into account the % long vs. short of the 3 major ETF's as noted above. I would imagine THAT indicie is off the chart. Jun 28 11:29 AM
    • FedEx, Royal Bank of Scotland, Tell the Real Economic Story [view article]
      Wow...well you guys will never be accused of being a Pollyanna!! Though I share your mostly negative views, I will say that much of the problems are linked into oil and energy costs. Frankly, if oil prices dropped to $100 or below, I think alot of these market pressures will subside. The only way that happens is if (when?) demand drops significantly. THAT is what I am waiting for. Jun 19 09:06 AM
    • Beware of the Allure of Ethanol Investing [view article]
      Ethanol gas may be cheaper and more environmentally friendly (at least say the pundits) but it is certainly not more efficient. Oregon starting using 10% ethanol gas earlier this year and EVERYONE is seeing 15% to 20% less miles per gallon. My brand new Mazda CX-7 which is suppose to get 18-24 MPG city/hwy is more like 16 MPG. The state of Oregon said you could expect about a 1%-3% degragation in fuel efficiency. This is obviously not happening so this may also be having an effect on the stock prices. Jun 15 10:20 AM
    • 2 Major Reasons Why Google Bears Were Wrong This Quarter [view article]
      He put his $ where his mouth is if he was long going into earnings. At least he provided disclosure which is more than what most Seeking Alpha articles provide. Apr 19 12:29 PM
    • A Tale of Two Coasts [view article]
      San Francisco is more of a comparison to NY than LA. In SF, prices have barely budged too. However, you look in other parts of the bay area, particularily the suburbs in the east bay, and its NOT good. LA being so spread out and suburban, its not a surprise home prices have come down and probably have further to go. California is still very over priced compared to say, an Oregon. This won't be over in until the last balloon is deflated, and that will be in SF. Apr 11 09:05 AM
    • Roubini Now Says House Prices to Fall 30% [view article]
      Any idea of how many of these loans were no money down? I don't understand how in this latest downturn in RE, why it is assumed that such a large % are going to walk away. Granted, if you're in a dire financial state, bought more home than you could afford and put no money down...walking away may your best option. However, people got to live somewhere...its not like you had to own tech stocks during the crash. Each situation is different but I got to figure most people are going to try to hold onto their home in the anticipation that what goes down could also come back up. Apr 07 09:43 AM
    • Credit Crisis Indicators Show Pain Beginning to Subside [view article]
      We'll take any good news!! The doom & gloom crowd has gotten way too big. Mar 28 11:37 AM
    • Keep an Eye on Madison/Claymore Covered Call CEF [view article]
      MCN's NAV performance has been pretty mediocre on a longer term basis. I would stick with the IQ Investment Advisor funds. My favorite is DPD which emulates the DJIA. Pays monthly which is an advantage since it won't drop too much when it goes ex-div. I also trade around BEP & BEO which can be big movers up & down and will terminate in 2010. QQQX has the most upside since it is tied to the QQQQ's and trades at the biggest discount. All of these are covered-call funds...some use indexes, others write calls on individual positions. EBI & ETW are my favorites in other fund families and both give you international exposure. There are others I follow but after alot of trial and error, I feel these have the best risk/reward. Like stocks though, you've got to pick your spots. Mar 28 11:24 AM
    • Thriftville and Squanderville: A True Story [view article]
      Whats the worry? Thriftville watches all of Squanderville's movies, eats all of Squanderville's fast food, and utlimately falls in love with Squanderville's way of life. Pretty soon, they become just like us and the world is a beautiful place!! Mar 25 08:53 AM
    • The Big Whoosh: Is This The Beginning? [view article]
      Hey Herb...here's a segment of another 'tip of the iceberg' article that appears today in Seeking Alpha. Only this is from someone who has a bit more optimism and I'm sure alot more success in their investing career.

      The Chance to Go Shopping

      "So what of the current market and the state of U.S. financial institutions? Clearly, they both suck. However, we've got JP Morgan Chase, B of A, Berkshire Hathaway, and maybe a few others who have the financial strength and business models to benefit from the rapid decline of Bear Stearns and the other inevitable meltdowns (Washington Mutual, anybody?). I think it is going to be shopping time for these firms, where they will selectively pick off people, business lines and entire firms at fire-sale prices. This is when good risk management and business judgment come in handy; parlay the crisis into an even stronger position at your less-prudent competitors' expense. Berkshire starting up a municipal bond insurer?

      It is just the tip of the iceberg."       Mar 16 12:06 PM
    • The Big Whoosh: Is This The Beginning? [view article]
      Bravo, curious cat!! Finally get to read something with a bit of optimism. I go around to alot of websites and read the posts and everyone...and I mean EVERYONE is doom and gloom. Sure, the credit crisis is a huge debacle and anyone or any company that is leveraged 15-20 times should expect to be treated harshly when their bets go wrong. And anyone so stupid to max out their credit cards or buy more home than they can afford with no $ down should also expect to lose their bets. I personally, don't know anyone in those catagories!! They are obviously out there but when you read the posters at these websites or Herb Greenberg, you would think they make up the majority of Americans!! If everyone were like Herb Greenberg, our ancestors would have never ventured from the caves they lived in and we'd still be huddled around fires looking over our shoulders. Greenberg is a loser and everytime he goes on TV, everyone on CNBC chuckles under their breath because he's the last one to realize how little respect he gets. Mar 16 11:38 AM
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