1) Perhaps. 2) I'm sure my confidence makes me look arrogant. 3) He's not offering to train me he just wants to show off. I have no interest or need for either. I've done my homework, I know my risks and know when some decision making(near historic highs /lows) will be anything but certain and involve luck. At times like that I will simply interject my own wealth utility function for the correct action.
2a) Well I don't think anything catastrophic will happen but it certainly may. What needs to be determined to a certain extent is: events which would hose me in any case minus events that would only hose me only with this method. 1) loss of nerve , leading to exit at a disaster low, 2) missing a relative low or high without action 3) closing of the fund or underlying index (most likely at a low) 4) changing my plan 5) letting too much risk ride once initial retirement goals met. 2b) I understand how my leverage works just fine. You need to research leveraged etf's and the constant leverage trap. I'm paying 2 premiums. one premium to the fund company for daily adjustment of the underlying securities. The other, the constant leverage trap is the premium to virtually eliminate margin calls or a 100% loss. Plus there is the cost of the leverage itself. 3) I don't believe in market timing perse but I do think risk timing is possible and potentially profitable.
It wouldn't be that hard for Piker to verify if Talon is legit. Learning from others more skilled in their field it the way every other profession works. But on the most important point you are right the math on the leveraged ETF doesn't work, IMHO is a disaster waiting to happen.
I have neither met nor communicated with Talon,however if you take the time to read his thread and responses you will agree he is "legit". It is not what one says, but the way it is said that matters...... NiN
I'm not opposed to the use of 3x etf's, as a matter of fact their availability is essential to my plan.
Piker I know you're smarter than everyone else here, even though you couldn't cut it as a trader (and you're about to repeat version 2.0 of your failed trader experience but this time with your retirement money. That will be fun!) But I have a question for you: Compare SSO to SPY. Specifically, look at the decline from late '07 to early '09, then the recovery from early '09 to jan of this year. Hmm... looks to me (unless my math skills are bad and you with your 5th grade math can correct me) like SPY made back 53% of the decline while SSO only made back about 31%. Golly gee... how can that be? So my questions to you, genius, are: 1) Is this math correct? 2) If so, what does it mean? Why are these numbers different? 3) If my math is correct, does this have any implications for an investor holding these leveraged products through a downturn? 4) Are there predictable volatility characteristics to declines and rallies? (The answer is yes btw, but you probably don't know that.) What does that say about the "wisdom" of holding leveraged products as an "investment"? Once you puzzle through those you can get to 5) how can a reasonably intelligent person think this is a good strategy? (Be clear, I am not calling you reasonably intelligent.) If you can sort through this, there's an undeniable lesson here. Do you get it?
My 6th grade math gives the return on SSO from the march 09 low- to last close at about 140% gain. Not 31%. If january was used the returns would be higher. So much for your math logic and bull**** but thanks for playing talon. Oh I get the lesson you are more interested in proving me wrong than being correct or accurate. sso on yahoo finance