ETF View 12/05/2007
Principles of the Stock Market

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Have You Seen This?

Have You Seen This?

EXCHANGE TRADED FUNDS (ETF) VIEW.  Be very  careful of the new inverse ETFs!  As I feel that a new bear market has now started, I’ve gotten my hands on a list of ProShares inverse ETFs, or Short and UltraShort ETFs, with which one can short the stock market (by buying!) various indices and specific market sectors.  I shorted oil, symbol DUG, near the close November 27th to test them out (and technically because oil hadn’t been able to break through the $100 price level).  Immediately I noted that DUG went down even though the price of oil itself was going down.  And here it is, a week later after oil dropped about -10% and DUG is down about -6%!  Schwartz View:  I found out pretty quickly that DUG tracks the Dow Jones US Oil & Gas Index.  In other words it tracks oil stocks not the price of oil.  Bottom line; buyer beware!  These concepts are good but the early efforts at living up to the idea is proving difficult, at best.





Posted 12-05-2007 8:37 AM by Richard Schwartz

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ETF VIEW wrote ETF VIEW
on 12-05-2007 9:00 AM

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