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6 comments:
The real issue is that these guys continue to make top $$$, bad year or good year. Why I would wanna continue to pay them for lousy performance? Maybe they are like other dinosaurs, too big to fail(whoops).
Roger, can you elaborate somewhat on why the excess supply in commodity ETNs is a bad thing? I don't follow the analogy to IPOs - in that case, too many tiny birds with their mouth open simply means some will starve to death - even some that would survive in normal (balanced) times.
But if I generate a product that tracks commodities derivatively, am I necessarily altering the price of the underlying commodity? (Will the price of corn go down because there are seven instead of 2 places to invest (bet) that the price of corn will continue to go up?)
I may be mixing ETNs with ETFs, as well as metaphors, but while I think the "payoff" may change if there are more betting windows, I don't see the number of windows having anything to do with the actual speed of the horses...
R in NY
http://tinyurl.com/6oq6ld
demand for products to capture a theme versus supply of products to capture that theme. demand increases then supply starts to increase. as long as demand is more than supply price can go up. as this happens the investment industry shakes the money tree by issuing more product. eventually the supply is larger than the demand which means prices can go down.
8 years ago it was internet IPOs mostly with a few products that invested in internet companies. now there are more and more funds to buy commodities, evntually there will be too much supply.
The REAL issue(s) is/are, who's going to win the final four and is this the year the Cubs win it all.
the cubs have to get past Milwaukee first... callers to sports radio all but lost the faith after the season opening loss.
Since there was a mention of my blog earlier this week i posted a discussion of my trading frequency in this week's musings...
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