Holy Crap I see your point. Only a completely pretentious %^$$@# would expect to repeatedly make unsubstantiated boastful claims about their returns in a thread named "Take the Index Piker Challenge" expecting to not be asked for supporting evidence.
Dude, How many times must I tell you I am familiar with the literature on these leveraged funds and understand how they function? I know it may come as a great shock to all the pundits & professionals in the finance industry but not all investors are as clueless as they assume we are. I mean imagine lil ol me from bama (Roll Tide)being able to acktually read prospectivus.
You can bash the "pundits" and the "experts" and make sarcastic remarks about being a little guy, but I have news for you. Mathematics doesn't care if your a pundit, and expert, or an individual trader from Alabama. And you cannot escape the mathematics. The fact of the matter is over long periods of time, leveraged etfs will go down, no matter what anybody says. You say your familiar with the literature, but you clearly aren't. Thats like me saying that I am familiar with quantum physics. I've heard of it, but I don't understand it at all. You do not understand these at all and you are virtually guaranteed to lose money on these IF you hold them for long periods of time. If you sell them before the price decay really puts a dent into these, then you are trading. I have no problem with trading these, but you say you are not a trader and even patronize traders.
Ok I give up . Since you obviously refuse to accept that I understand these funds. Why don't you explain the math to me as to why I'm certain to lose my money?
1) Yes I do expect to outperform the s&p 500 index that part you have correct. However it is incorrect that one MUST use leverage to accomplish this. You do realize that the s&p 500 is merely a large cap asset class. To outperform the s&p500 on a longterm basis one merely needs to choose a riskier asset class, large cap value, small cap blend etc. 2) Man that's some REALLY DUBIOUS math you got there. I can only surmise you are warning of a drawdown, point acknowledged.
1) I suspect what I represent is more an affront to your ego than your finances. I mean unless there is a shortage of gullible people out there that I'm not aware of. 2) Well of course my arrogance annoys you. I have the outrageous audacity to state the truth concerning active trading vs passive investing. I guess being confident enough to issue a challenge to all comers is really too much for you to bare*. I mean I'm not the one who claims to have any mumbo jumbo market skill that can be imparted to others with hard work etc etc. You see this is where I know active fund managers,hedge fund traders get a little prickly. They get themselves all worked up when someone recognizes and asserts that the little guy can at least duplicate or exceed their returns on a long term basis. One of the purposes of this thread is to champion the little guy vs the mutual/hedge fund managers. 3) Yes talon you are to be congratulated on your choosing to excel at the CONFIDENCE GAME of attracting and managing other people's money. Building up the education pedigree, contacts with & mastering the lexicon of the high priests on wall street is the surest way to wealth. Of course a fancy resume, an expensively decorated office and fast talking don't really mean squat with respect to reaping market returns for customers and the smart investors know it. For those running the confidence game it's a whole different ballgame and there's no doubt about it they are the smart money. 4) I openly know some can and will outperform my portfolio and I most welcome anyone daring enough to document their progress. But I contend it's simply a combination of assuming higher risks , sheer luck and it's virtually impossible to determine who will outperform my portfolio beforehand. Knowing that, I can understand why this thread gives great trepidation and angst to a well regarded poster /trader/manager. At first glance one would expect lots of takers to my challenge esp those with the more sterling reputations or managers of other people's money. But ALAS, it is not to be. The true believers will expect them to win effortlessly, maybe even with contempt. Should they fail their reputations would be dashed by a bumpkin from Alabama. It's a no win situation. PS: Don't worry talon, I won't ask you to prove your claims as long as you refrain from making them on my thread. capish?
IP, just out of curiosity, what is the purpose of this journal? Is it to demonstrate to the 'unenlightened' ETer's that your aggressive passive index investing strategies outperform active trading and that this outperformance is systematic and statistically significant over a large number of samples?