Direxion, the triple long and triple short folks, listed four new funds;
3X Bull Ten Year Treasury
3X Bear Ten Year Treasury
3X Bull 30 Year Treasury
3x Bear 30 Year Treasury
The daily compounding of the triples is tough to game, at least for me, but as with the 3X equity funds people find a way to trade them. I have obviously been a big proponent of the double short S&P 500 ETF but have done nothing with the 3X and have not even written about them that much. I might be more inclined toward 3X short for hedging in a tamer environment like we had during the first six months of the bear market but since they weren't around back then there is no way to know if that would have been a good hold at that time.
Paul Krugman whipped up a bit of a ruckus when he commented that Austria could be the next country into bankruptcy after Iceland. Austrian finance minister Josef Pröll said it the comments were potentially a form of economic warfare. While I don't know about economic warfare the idea behind the reaction is that fear of there being a run on the bank will cause a run on the bank.
That said Austria is in a bit of a pickle. The growth catalyst at the start of the decade was that Austria was financing much of the expansion of Central and Eastern Europe. Now that part of the world is having a lot of problems and it would be very difficult for Austria to nationalize the bank debt if it "had" to.
A reader left the following quote and attributed it to Jimmy Rogers;
"Diversification is a scam. "Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued [for making bad investment choices for clients]. Henry Ford never diversified, Bill Gates didn't diversify. The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket. You can go broke diversifying. Ask anyone who's diversified in the last three years. They've lost money."
Just look at various sector ETFs, country ETF's etc etc. They all went down. Diversification is a scam foisted on unsophisticated investors by scam artist wall street gurus and financial advisors. Do your homework and break free of the cnbc types.
I have no idea if Rogers really said that or not but even if he didn't you know this sentiment exists, the quote obviously paraphrases Andrew Carnegie with the bit about watching the basket. If you don't know my thoughts about diversification, and assuming you care, this post of mine on greenfaucet earlier this week gives an inkling.
Rogers has a point but so do the people who believe in diversification. How you structure a portfolio and how your thoughts about how to do that evolve ultimately has to make sense to you. You can and probably should read about the way other people do things to learn more about different methods or to gain more confidence in the way you do things or as I have said many times take a little bit of process from here, little bits of process from other places and create your own process.
Danny Ainge, get well soon.