I have been writing about Iceland for a couple of years and have been public about my investments in Iceland which consists of an account in the country at Kaupthing Bank that is 50% in the ICEX-15 ETF (this only trades locally in Iceland) and 50% cash.
My other on again off again exposure has been in shares of the Stockholm listing of Kaupthing Bank (KPBIF to trade in the US or KAUP.ST to quote on Yahoo).
Yesterday I sold my KPBIF shares at $15.50 (what think was SEK109.50). I bought in on December 21 at $12.30 (what I think was SEK84). Along the way I picked up a 145 basis point dividend (net of foreign tax).
There were a couple of reasons for the sale, the biggest being a possible ratings downgrade. The downgrade story is a weird one and does not single out Kaupthing or even Iceland but might be a tipping point for a correction. Despite the news having been out there neither the Stockholm or Reykjavik listings have been hit.
This is the type of thing that should already be in the stock and while I am a the market is always right type of guy, sometimes it isn't. If the sale turns out to be a bad one it will be due to this aspect of the thought process.
The picture is in Reykjavik from the top of what I think was the Lutheran church. In the upper left is Lake Tjornin and on the right side of the lake is the city hall, the only two landmarks I can pick out.
The gripe of this post is yet another article from Morningstar shunning anything innovative and showing the extent to which they don't understand the ETF market.
A lot of ink is devoted to picking on the HealthShare ETFs. While I am not certain the audience that HealthShares had in mind it is a good bet that they will be used more by institutions than individuals. I am convinced there is alpha to be had there, someone will find it and it won't be me. That does not make them the equivalent of financial typhoid.
You may not remember the genomic mania that occurred within the Internet bubble but the stocks got hot, genomics open end funds were created (this idea is just as narrow as anything from HealthShares) and they did poorly without ruining humanity.
The article brings out the ole chestnut about people working at the ETF providers not owning the funds as a sign they don't believe in the funds. The author says "If I were an ETF czar I'd declare that companies can only launch ETFs when the managers and every director invests $1 million in the fund." Well that may be the most juvenile thing I have ever read in MSM.
Plenty of new product will die on the vine which is how capitalism works.
This chart shows what has to be the worst case scenario for a fund-like product; the Internet Infrastructure HOLDRs (IIH) topped out around $105 and now trades around $5.
If you buy something that narrow you should know it might drop 95%. If that bothers you, you should not buy it but that you don't like the fact that something could go down than much in a perfect storm is not a reason for it not to exist and has nothing to do with whether someone working at the fund in any capacity should own it.