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bridgeboy0 (32.07) Submitted: 12/05/07 7:31 PM : Start Price: $64.58 FXP Score: -13.93
The goal of this ETF is to move twice amount in the opposite direction of the Xinhua China 25.Picking underperform on short or ultra-short ETFs is a part of a very 'cheesy' (imho) tactic that I got from another Caps player. Over the long haul stocks go up. So shorting all of the ultra-short or short ETFs will do very well. You get points both for the short/ultra-short ETF going down and the SPY going up. Add in that the ETF has a management fee that will deduct from its return and this is fantastic for the shorts!This strategy is incredibly sound but I don't really think it is what Motley Fool had in mind when they started Caps. I'm happy to see that Motley Fool has made it so that short and ultra-short ETFs don't count toward the 'skeptic' charm (since it is an ultra-bullish position). Others have explained why these picks should still count toward the 'underdog' charm and I agree with their reasoning.As an explanation as to why I find this tactic 'cheesy': If an underperform of a short/ultra-short ETF was measured against the SPY going up instead of against the SPY going down, then I think this would be ok. As it stands, you get an exagerrated return on any movement (assuming that the SPY is mainly negatively correlated). Underperform on all the short or ultra-short ETFs really is a no-brainer to me over the long haul. But if the positions had to actually out-perform the market bias then you would need to cherry-pick which ones you wanted to red thumb. When you add on the fact that it is a good tactic to close out and re-pick underperforms (not the case with outperforms) after they give you a winning pick (ie more than +5%), this just seems unfair. This is a great method of increasing accuracy (again we're talking about over the long haul).I'm now shorting all of the ultra-short ETFs in CAPS (at least all of the ones of which I'm aware). This is a very sound long-term strategy that I recommend to everyone to improve their CAPS score (as long as you think stocks go up over long periods of time). If you know of any short or ultra-short ETFs or closed-end funds that I'm not already using please pass them along to me. Thanks in advance!
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FourthAxis (25.88) Submitted: 3/26/08 6:13 PM
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I hope you have at least a decade to sit on this.
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bridgeboy0 (32.07) Submitted: 4/03/08 6:31 PM
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FourthAxis,I've noticed a trend on all my ultra-short ETFs. When you post a reply saying how it's going to take me 5, 10 or even 30 years for the pick to turn around, it seems that the ETF moves quite a bit in my favor over the near term. With that in mind, can you please say something about JMBA? That is my biggest holding in my real-life portfolio and I'm sure that you can find plenty of bad things to say about it (maybe something about how the lack of consumer confidence especially in CA is going to kill the stock). I'm just trying to use your karma for a bit of profit. You can't begrudge me that, right?Bridgeboy
bridgeboy0 (32.07) Submitted: 4/23/08 2:45 PM
Seriously, please say something bad JMBA! I mean you said I'd need a decade on this pick and that was WAY WAY WAY back in March (1 month ago). Now, it is almost back to even (meaning my pick has gone up over 50% in 1 month). You've got a gift, it would be a shame to deprive others of your talent.
TheParadox (98.78) Submitted: 11/20/08 10:53 AM
"Picking underperform on short or ultra-short ETFs is a part of a very 'cheesy' (imho) tactic that I got from another Caps player."Like shorting XLF and buying the financial ultrashort? Well, im sorry, but if you make caps points using this method, and you make *money* with this method... i'd have to say im looking to be a cheese pizza.China is debatable. Personally, i think we have a "china bubble". But i don't know the risk or extent, and probably wouldn't be willing to put any money on the table, or points on the line.
cubanstockpicker (78.64) Submitted: 11/27/08 4:01 PM
Bigboy, there is nothing cheesy about picking an ETF and making money. These are short term holds and be quick to sell. FASTBut you can make some serious cash on this if you catch a wave
babypoop (74.18) Submitted: 12/02/08 9:00 PM
JMBA, eh?OUCH!!!!!!!
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