Archive for August, 2010

Top 50 ETF’s – September 2010 edition

By: IS | Date posted: 08.31.2010 (4:22 pm)

In what turned out to be the worst month of August in over a decade, bear ETF’s, funds that are built in order to profit from market downturns were at the top of the ranks. These funds and especially the leveraged short ones dominated the charts with Direxion and Proshares sharing the lead.

The other successful bet was the long treasury (TMF) which is essentially the same bet as a poor performance of the equity markets usually translates into strong performance of the treasuries.

Other bets that did well are:

-Short oil (DTO)
-Long Gold Miners (GDXJ)
-Long Global Carbon (GRN)

The one big surprise for me was not seeing a volatility ETF make the top 50 as they usually perform very well in such difficult environments.

And a few other commoditiy plays also did very well. Will these be winners in September? Difficult to say but most of the winners in August are still down for the year.

Without further wait, here are the top 50 ETF’s in August 2010:

TickerNameMarket CapPriceReturn YTDFees1Y ReturnReturn MTD
SOXSDirexion Daily Semiconductors Bear 3x Shares $8,770,043.00 $43.85N/A0.95N/A32.588
FAZDirexion Daily Financial Bear 3X Shares $1,017,564,000.00 $16.73(12.25)0.95-25.44823.372
TMFDirexion Daily 30-Year Treasury Bull 3X $30,228,000.00 $54.9672.230.9538.96721.884
SRTYProShares UltraPro Short Russell2000 $33,900,050.00 $56.50N/A0.95N/A20.721
TZADirexion Daily Small Cap Bear 3X Shares $788,917,600.00 $38.41(22.31)0.95-45.71220.516
SSGProShares UltraShort Semiconductors $37,107,000.00 $20.629.360.95-14.22120.413
TYPDirexion Daily Technology Bear 3X Shares $59,407,510.00 $49.1010.110.95-32.51119.895
SKFProShares UltraShort Financials $627,354,000.00 $22.98(3.80)0.95-11.73816.55
SJHProShares UltraShort Russell2000 Value $15,893,550.00 $23.55(11.08)0.95-28.15915.444
UBTProShares Ultra 20+ Year Treasury $15,553,600.00 $103.69N/A0.95N/A14.762
SDDProShares UltraShort SmallCap600 $28,632,000.00 $23.86(9.72)0.95-28.27414.443
BXDDBarclays ETN+short D Leveraged ETN Linked to S&P 500 $3,223,060.00 $55.5715.53N/AN/A14.033
TWMProShares UltraShort Russell2000 $651,168,000.00 $22.61(10.52)0.95-28.42213.953
SMDDProShares UltraPro Short MidCap400 $5,845,058.00 $58.45N/A0.95N/A13.874
SIJProShares UltraShort Industrials $14,742,000.00 $21.84(10.77)0.95-31.13313.791
KRSProShares Short KBW Regional Banking $26,509,080.00 $75.74N/A0.95N/A13.617
SQQQProShares UltraPro Short QQQ $49,027,570.00 $65.37N/A0.95N/A13.566
REWProShares UltraShort Technology $30,084,000.00 $25.0710.260.95-19.45313.499
SKKProShares UltraShort Russell2000 Growth $25,963,500.00 $18.22(9.15)0.95-28.4413.425
SPXUProShares UltraPro Short S&P 500 $401,037,000.00 $35.49(1.98)0.95-28.5613.093
BGZDirexion Daily Large Cap Bear 3X Shares $343,406,300.00 $16.47(3.85)0.95-30.76612.826
DTOPowerShares DB Crude Oil Double Short ETN $71,247,000.00 $83.8218.490.755.8212.615
ZROZPIMCO 25+ Year Zero Coupon US Treasury Index Fund $45,970,000.00 $91.9434.360.15N/A12.338
GDXJMarket Vectors Junior Gold Miners ETF $1,272,763,000.00 $30.3416.320.59N/A12.261
EDVVanguard Extended Duration Treasury ETF $176,562,000.00 $103.8632.970.1419.46411.673
MWNDirexion Daily Mid Cap Bear 3x Shares $26,509,420.00 $19.28(22.06)0.95-47.34211.603
GRNiPath Global Carbon ETN $4,260,000.00 $28.4023.130.750.39211.392
SDOWProShares UltraPro Short Dow30 $34,507,270.00 $69.01N/A0.95N/A11.172
SMKProShares UltraShort MSCI Mexico Investable Market $4,692,003.00 $23.46(11.01)0.95-39.32211.143
FCGSDirexion Daily Natural Gas Related Bear 2X Shares $4,533,045.00 $45.33N/A0.95N/A11.092
AGQProShares Ultra Silver $172,107,900.00 $66.2014.120.9539.36510.98
LHBDirexion Daily Latin America Bear 3X Shares $6,603,033.00 $33.02(17.86)0.95N/A10.976
ERYDirexion Daily Energy Bear 3X Shares $42,088,190.00 $57.661.600.95-31.37710.554
BALiPath Dow Jones-UBS Cotton Subindex Total Return Callable ETN $12,614,610.00 $42.2613.680.7540.71310.554
TYDDirexion Daily 10-Year Treasury Bull 3X $6,661,000.00 $66.6142.590.9531.87610.525
JJTiPath Dow Jones-UBS Tin Subindex Total Return ETN $11,058,750.00 $49.1528.060.7561.26210.41
SCOProShares UltraShort DJ-UBS Crude Oil $52,227,720.00 $16.0711.580.95-4.93110.282
GDXMarket Vectors - Gold Miners ETF $6,998,919,000.00 $53.6114.950.5332.51810.162
DPKDirexion Daily Developed Markets Bear 3X Shares $22,583,500.00 $14.57(4.37)0.95-25.3449.971
EDZDirexion Daily Emerging Markets Bear 3X Shares $133,935,400.00 $38.38(21.88)0.95-57.3529.525
DGPPowerShares DB Gold Double Long ETN $458,094,000.00 $33.5624.550.7558.3939.438
UGLProShares Ultra Gold $197,806,800.00 $55.7222.460.9556.6419.404
QIDProShares UltraShort QQQ $1,092,052,000.00 $18.91(1.16)0.95-25.8189.292
BXDCBarclays ETN+short C Leveraged ETN Linked to S&P 500 $4,834,953.00 $71.6310.28N/AN/A9.133
RSWRydex Inverse 2x S&P 500 ETF $114,720,000.00 $57.361.610.71-17.0019.044
MZZProShares UltraShort MidCap400 $40,992,000.00 $19.52(11.90)0.95-30.3298.888
BZQProShares UltraShort MSCI Brazil $36,712,520.00 $22.25(1.17)0.95-47.9778.845
SDSProShares UltraShort S&P500 $3,877,681,000.00 $35.341.060.91-17.4748.784
SILGlobal X Silver Miners ETF $71,046,920.00 $15.97N/AN/AN/A8.715
SJFProShares UltraShort Russell1000 Value $7,521,000.00 $50.14(3.57)0.95-19.7128.553

More on this topic (What's this?)
Measuring the Performance of the Ivy Portfolio (Phil’s Stock World, 12/1/12)
What is a Short Gold ETF? (Learn Mining News, 12/8/11)
Read more on Exchange Traded Fund (ETF), Hong Kong Ferry, Chun Yuan Steel at Wikinvest

Quick news – August 31 2010

By: IS | Date posted: 08.31.2010 (2:55 pm)

Tech news: (concern the stocks we follow)

Apple (AAPL) is said to be about to announce that it will include a Netflix (NFLX) service in its next tv box
AOL (AOL) just acquired mobile firm  “Rally up”
Rackspace (RAX) was cut to “hold” by Benchmark
Staples announced it would soon be selling the Amazon (AMZN) Kindle in its stores
Google (GOOG) released a “smart sorter” in its Gmail section that performs “smart” email sorting
Google (GOOG) & AP reached a distribution deal

Best return:    Quinstreet (QNST) +2,19%

Worst return:    Research in Motion (RIMM) -6,02%

More on this topic (What's this?)
Wealthy Congressmen Don't Feel Your Pain (Money Morning, 1/9/12)
Investor Sentiment: Looking Like Q4, 2010 (Comments for thetechnicaltake, 1/28/12)
Read more on Chun Yuan Steel, China Aerospace at Wikinvest

Getting ready to short Travelzoo (TZOO)

By: IS | Date posted: 08.31.2010 (7:01 am)

Have you taken a look at the charts of travel internet company Travelzoo (TZOO) in the past few days? Not as crazy as investors in 3Par or other acquisition targets but it remains impressive to see how much the stock has gained in recent action.

Monday I could not open a new trade because I still have 5 live trades but one stock that was discussed in the Premium Newsletter last weekend was Travelzoo. I would not go short a stock that gained over 25% in a couple of days to a avoid being against such strong momentum but it would certainly make sense to strongly consider shorting the stock when things will calm down a little. I have shorted Travelzoo against Priceline earlier this year with great success mostly because valuations were not consistent with a stock that has not generated that much growth in recent years. So why does it trade so high? Because for some investors Travelzoo shareholders are easily excitable.

It happened again

The odd thing about the recent rise is that there wasn’t anything “material” behind it. The main factor that contributed to Travelzoo’s rise was an announcement that it would start offering a “Groupon” like service. What is Groupon? It has been at the centre of a lot of hype in recent weeks as it gains a lot of traction similar to what Facebook & Twitter experienced after a few months. You can visit the website if you’ve never heard of it but basically it gives out coupons targetted to where users live. The concept is simple but brilliant and has been generating copycats everywhere.

Travelzoo will certainly be able to generate business by using the concept but will it be enough to justify a 25% increase? Not likely I would say. They do have millions of emails and will certainly put effort into getting more info about the subscribers such as the city they live in, but so do competitors such as Expedia (EXPE) and Priceline (PCLN)

Apple (AAPL) shareholders, consider buying insurance on Steve Jobs

By: IS | Date posted: 08.31.2010 (4:00 am)

Hedging any investment, when it is not too expensive is certainly a very attractive proposition. There are conventional ways of doing so, through options for example, but also less conventional ways.

In case you did not follow this news, HP (HPQ), the giant pc/printer company suffered a huge loss in recent weeks when the board fired Mark Huard because of a sexual harassment complaint. The board has been accused of acting too quickly without putting enough effort into finding out what had really happened. To this day, many aspects of the dismissal remain unclear but what is clear is that:

-Both Huard and the board made important mistakes
-Shareholders are the ones that assumed the biggest loss

Just take a look at the chart of HPQ in the days following Huard’s firing:

Why did the stock suffer so much after losing just one guy? Because Huard had been at the head of HP during a great turnaround and has been seen as crucial in the recovery of the tech company. Now, can you tell me of the one company where the CEO stepping down would draw a major loss for shareholders? Steve Jobs from Apple comes out heads and shoulders above everyone else. Not only is he seen as the man who rescued the company a decade or so ago. Jobs also did have major involvment in the launch of huge hits such as the Ipod, Iphone and the recent launch of the Ipad. If you recall,  the stock became very volatile 1-2 years ago when rumors surfaced that Jobs was still suffering from health problems and might not be able to continue his work at Apple.

Can you imagine if Steve Jobs did have to quit his job at Apple?

No matter what the reason, it’s easy to imagine several billions of market cap being wiped out in the hours following such an announcement and if you have a portion of your retirement fund stacked with Apple shares, it might be something you should consider protecting from… but how?

Insurance?

I was wondering if buying life insurance on Steve Jobs would be possible for the average shareholder. Wikipedia seems to indicate that it’s a possibility. Turns out it’s not. You can read about it and a funny story regarding life insurance bought on strangers here. There might be some local laws that permit such a purchase? If so, please let me know.

Another option might be looking into making such a wager through event trading on a site like InTrade.

Any other ideas?

Of course, this article is a bit of an exageration as it’s probably not worthwhile to actually get insurance on such an event from non-conventional sources but I thought it was an interesting idea and could certainly

Quick news – August 30 2010

By: IS | Date posted: 08.30.2010 (7:55 pm)

Tech news: (concern the stocks we follow)

Google (GOOG) acquired socialdeck
Google (GOOG) has acquired Angstro a startup social network

Best return:   Travelzoo (TZOO) +2,23%



Worst return:   Dice Holdings (DHX) -8,85%

HP (HPQ) & Dell (DELL) playing high stakes poker over 3Par (PAR)

By: IS | Date posted: 08.30.2010 (4:00 am)

I often get questions when takeover bids are made. “If BHP made an offer to buy Potash for 130$ per share, why would the stock move to $150?”

I think we got the perfect example to explain why. It all started when Dell (DELL) made an offer for a little known company, 3Par (PAR). It offered 18$ per share, a very generous offer considering that PAR’s stock was worth less than 10$. You can imagine what happened. 3Par management accepted the offer and it went through, right? Wrong in fact. They did accept the offer but there was speculation that Oracle would make a bid of its own as tech companies with loads of cash look for growth opportunities. A stock that receives an offer for X dollars might move higher simply because investors expect another, higher bid to be made by either the same company or a competitor.

Turns out that HP (HPQ) was the one to make the move as it made a counter-offer for 24$ per share, a big premium over Dell’s offer. And that is when PAR shareholders understood they had the best position of all… their shares were being auctioned off between two tech giants, Dell and HP.

Since that day, both companies have bids, counter-bids and it is still unclear how things will end. On Friday, Dell made another big raise, making an offer of 27$ per share, which HP raised a couple of hours later when it offered 30$. Where will this all end? Unclear but the stock traded over 32$ on Friday fueling speculation that the bidding is not over just yet.

How high could it go?

It’s difficult to say as both companies are already paying a premium of over 200% at this point and while they do have lots of free cash, at some point you would think that one of them will give up. What is clear is that the big winner here will not be Dell or HP but rather 3Par shareholders with a return of over 200% in a couple of weeks. And if anyone was short 3Par? Well as we discussed last week, shorting a stock that is an acquisition target can be costly, especially when the stock goes up so much. Luckily, on such a small stock, there were probably very very few short sellers!

More on this topic (What's this?)
Will Dell Take Advantage of HP’s Rough Patch? (Investment U, 10/12/11)
A Vivid Illustration of an Over-Priced Extended Warranty (Michael James on Money, 12/29/11)
Read more on Dell, 3par, Hewlett-Packard at Wikinvest
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