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Revisiting My Managed Futures Article that wasn't published many years ago

But it did get a retry cuz i've been saying the same thing going on 4 years now as LKofScotland, LKofEnglish and now Aristiphones (mispelled of course) and my articles are always..."beyond brief" as this one will be as well. the purpose of managed futures is as a way to play "the problem of correlation." historically speaking it is very rare for equities, treasuries and commodities to move in the same this case "all higher." this is what is meant when the pros say "we're approaching correlations of 1." Historically speaking treasuries should move inverse to equities rise treasuries should fall price and rise in yield. Instead the exact opposite is happening. at the same time commodities are re-testing all time highs...something that should also be negative for BOTH equities and treasuries (ala the 1970's) yet nothing shows up in the inflation numbers that says "time to hit the panic button" and start going full on "Paul Volcker" either. meanwhile the dollar has tanked which you would assume would send volatility through the roof as "intermediation" is breaking down. Instead...yet again...the exact opposite has happened. It is within this context...something that has been sustained for some time now (years!)... that the concept of "managed futures was born. Now if we go by Wall Street rules "as correlations approach one then this type of alternative investing strategy should thrive." Here is a great presentation of what correlations approaching one means:

and since this has in fact occurred how are these funds doing? in a nutshell? "they stink." I really can't do any better than this article in Forbe's magazine: the fees are outrageous, the performance has been the exact opposite as intended, if you throw in MF Global et al they are plagued by scandals and outright chicanery. I'm glad i didn't follow my thought process and just stuck with a plain old fashioned S&P 500 index fund instead. Is the concept dead as a consequence? If this equity market rallies strongly into the new year and beyond i would say without a doubt "yes" in their current form. If markets go as i predict (a strong bounce off the "crazy Obama re-election sell off") i will post a second piece come the new year on investment strategies for an Obama second term once his new Cabinet is in place. Thanks for any comments, LKofEnglish.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.