I owned this for many of the past 15 months when it did nothing in the $70s - just waiting for the fallout. Apparently all the fallout is done with and we can go back on our merry way. It is now down in the mid $50s. Folks this was in the $280s just weeks ago. "It's all priced in" - so say the commercial REIT stocks.
I'm afraid to add to the position here simply because of my "year end" manipulation up thesis, but this is a lower price than I was able to buy it at any point this year, so it's getting mighty tempting. Maybe I can get it at $5 at this pace, by Dec 31st.
I have a post scheduled to go up tomorrow morning re: malls based on a story a reader sent me. But that is based on fact. In the casino, thesis rules.
Anyhow, I am just glad the government has my back and I can buy any stock with full confidence now. No matter the sector or fundamentals. Boo Yah.
Long Ultrashort Real Estate in fund; no personal position (but soon)
5 comments:
the CRE implosion has only just started
timing is tough, and i'm not jumping in here (scared as well), but this thing is gonna be lotto next year
SRS is a casualty of the flawed nature of the 2x ETFs. If you do the math, these 2x ETFs by their nature of doubling the DAILY return of the underlying index make very very poor investment vehicles if they are used for anything more more than a short-term trade.
Example:
Starting price underlying index = 100
2x inverse ETF starting price = 100
Day 1 - Underlying drops 10%:
Underlying = 90
2x inverse ETF = 120
Day 2 - Underlying rises 10%:
Underlying = 99
2x inverse ETF = 96 (loss of 20% x 120)
So while the underlying did in fact drop overall over the holding period, you would still be down on your index ETF.
2x ETFs are a scam for anyone except daytraders. I strongly urge anyone making longer-term bets using ETFs to simply use the 1-to-1 ETFs.
P.S. The math works out exactly the same even if you reversed the order of the gain/loss in the underlying.
URE is ultra real estate, this is also very close to its lows although it has bounced recently. These ultra ETFs are only good for 1-2 weeks as holdings. They are more like oscillators than anything. sdk_IV did a decent job showing why these ultra funds (long or short) are losers in the long run. It all boils down to two situations. If the market rallies or falls hard, these produce HUGE gains or losses. If the market is choppy, these produce big losses. As XLF pulls back, SKF gets demolished. Not fun, not fun. YTD almost all these ultra funds (whether bear or bull) are in the red.
sdk
very good points - the "compounding" effect of these instruments is putrid. Hence with URE nowhere near yearly highs, its inverse is at yearly lows.
Same issue in FXP if you notice - FXI not near all time highs (although rallying), FXP falls off cliff
This is why I cut these back so severely in between "runs" - just "holding" them for a month can destroy the position if they don't "move". Good points.
Sia, I'd be interested to see a list showing they are almost all in the red if you have a source or did the homework. It would be interesting to look at.
sdk-
you are 100% correct, however....
IF (and thats a big if) you can get the timing right (and I agree, its very tough to do) these 2x ETFs are payday.
i have made a LOT of money in SRS
the key is, get the timing right, and dont be greedy...overstaying your welcome can kill you in literally 5 minutes
Post a Comment