Wikinvest Wire
Saturday, February 10, 2007
The Big Picture For The Week Of February 11, 2007
I never got to the amusing story in the video; right before the Bogle interview on CNBC I emailed Dylan to say that I would love to hear Bogle talk about whether the problems with ETFs he sees are more about human behavior or structural with the product. Dylan emailed back and said it was on his list of questions and he actually asked about it.
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6 comments:
i had swing traded NEW long and short over the past couple of years. I was long a small position going into the previous quarter's earning call.
During the call management made it clear that they are not doing well and they they will be cutting the dividend in the future. The way I understood it the dividend was actually return of capital but due to the way they were marking to market it still appeared as earnings. I sold next morning and stayed away.
my point is that the fundamentals unveiled problems way before the latest news. The chart clearly was in a decisive downtrend.
Whether on fundamental basis, or technical basis, this should've been avoided.
Ironically, a Forbes columnist recommended NEW in several issues over the last 18 months. Kept saying that the 17.5% yield is a great find, and that he cannot see how the company would stop delivering in the future... i canceled my Forbes subscription around the same time.
Roger,
As you know, Jack Bogle has been less than kind to actively-managed funds for years. So for you to deride him for his comments on ETFs strikes me as nitpicking on your part--you should be bigger than that (remember you're supposed to be about the 'big picture').
Jeff
Also, please don't promise an amusing story and then not deliver.
Mr. Bogle has eloquently spoken out in no uncertain terms for the small investor as long as I can remember. While his commentary deserves all due respect, I believe that ETFs coupled with the wealth of information available to the individual on almost every aspect of investing and portfolio formation has created a wonderful opportunity for profit. One suspects Sir John Templeton wished he had as many sources of information and index choices back in the 1950s and 60s as the most modest of investors has today to examine and act upon.
Mr. Bogle's employer, Vanguard Funds, have traditionally been lower in cost than almost all others, yet their large headquarters reminds me of any casino property in Vegas...clients funded both.
ETFs, expanding in number practically daily, seem here to stay. Perhaps this indicates that they are a valid investment vehicle and deserve a selective, not blanket, critique.
Hi Roger:
Some money managers when they write about portfolio construction suggest that we hold positions on both sides of the risk. Does it mean that we hold ETFs (of stocks or other instruments) that will go up and also have ETFs that will go down at any point of time? In that case, will they not offset each other's gains/losses. In which case, we will make no money at all. For example, if I hold 50% of my assets in SPY and 50% in SH (s&P 500 inverse), then what do I achieve? Do not their movements (on upside or downside) cancel each other out?
Can you pl. clarify whre I am going wrong?
Thanks.
Off subject abit....But wondering your thoughts on the G7. Seems they sad little about the Yen and carry trades (a little but not much). I would think the high yielders should perform ok on monday....at least to start.
Trading both sides will mean you get no return and pay more to your broker. I've heard of people doing this but eventually they figure out why it is a dumb move when their account statement never changes.I read something that talked about a person that traded the qqqq on both sides and closed the position every week for $5k profits, yet it never explained how this was achieved.
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