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When you look at the internal costs and statistics of these leveraged instruments, they must all underperform the market over time. If I could, I would short them in real life.
Never forget that the pricing of markets (as well as of individual stocks or ETFs) can always stay irrational longer than you can stay liquid.
I have done a fair bit of reading on these leveraged funds, and while I would not suggest them for the casual investor, neither would I banish them strictly to a fringe underworld. I just don't think that most people truly understand the principles that are at work behind these leveraged funds. Perhaps this is for a reason. Sure, daily rebalancing can hurt your return, but then, so too can it help. And anyone who makes a blanket statement such as yours is greatly oversimplifying things; sorta akin to saying something like, "All policemen are unquestionably good." BTW, most things/people/strategies have a hard time keeping up with the S&P over time.
Having said all of this though, I would agree with you that IRL leveraged ETFs are probably not the best of investment options for you.