Maybe has been commented here before, but BEARX looks like a lake
mirror reflection of the Dow over past decade:
not a good fund to have bought into in the late 90's, but was great
after 1999 until 2003. When do you suppose it would be time to allocate
$$ into BEARX for a long hold? I would probably hold it in an IRA
through Vanguard if and when the time comes.
<> wrote
> When do you suppose it would be time to allocate
> $$ into BEARX for a long hold?
Never. There are always better places to put your money.
BEARX is net short. If they were right about their picks they wouldn't have
an average annual return of -3% since inception.
The best investors who bet against stocks make money because they are better
at seeing which will go down than Tice is.
The market goes up far more often than it goes down, that's the problem. If
you are unsure of market direction and can't find anything you like put it
in a money fund.
Ed wrote:
> <> wrote
>
>
>>When do you suppose it would be time to allocate
>>$$ into BEARX for a long hold?
>
>
> Never. There are always better places to put your money.
> BEARX is net short. If they were right about their picks they wouldn't have
> an average annual return of -3% since inception.
Actually, BEARX is not a pure bear play, which is even worse. It's an
odd unpredictable mix of shorting the broad market and going long on
gold and a few other things.
If a bearish investor wants to bet against the broad market, they should
choose a pure bear play like URPIX, and (only if they want) make
separate long investments in gold and beer. Yes, I said *beer*; check
out BEARX's current portfolio:
--
Steven D. Litvintchouk
Email:
Remove the NOSPAM before replying to me.
wrote:
> Maybe has been commented here before, but BEARX looks like a lake
> mirror reflection of the Dow over past decade:
>
>
>
>
> not a good fund to have bought into in the late 90's, but was great
> after 1999 until 2003. When do you suppose it would be time to allocate
> $$ into BEARX for a long hold?
BEARX is a mix of shorting the broad market and going long on other things.
I don't recommend shorting the broad market to anyone but experts.
Because a) the U.S. market rises more often than it falls, meaning that
shorting will be unprofitable more often than it's profitable; and b)
the downside risk of shorting is unlimited. (Check this out for
yourself on the Internet)
For novice investors, the best thing they should do if they fear a U.S.
broad market decline is to just stay out of the market entirely. There
are other markets in this world that are doing better and may be good
investments: gold, Japan, etc.
If you really want to bet against the market in the short term, and
you're willing to do some homework, then the safest way to do that is to
write (sell) covered call options against stocks you already own in your
portfolio. The worst-case scenario is that your stocks will rise and
your options will be called. But since your stocks did rise, you
shouldn't feel too bad. If your stocks don't rise, then the options
expire and you pocket the cash.
--
Steven D. Litvintchouk
Email:
Remove the NOSPAM before replying to me.
This is a multi-part message in MIME format.
------=_NextPart_000_000F_01C60311.D43C0B30
Content-Type: text/plain;
charset="iso-8859-1"
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Bearx is not even a good timing fund.. If you look closely, it actually =
ranks below uopix as a bear fund... and uopix is a bull fund. top bear =
fund I use to time is uspix...
Below, the most important thing is the Ra% col of numbers, 3rd from =
left....
Happy Guy, "Laissez les bons temps roulez"
..
Signal: TS - Cycle Index: JUNK - Sorted by column: Ra=20
------------------------------------------------------------
S/Y=3D 7.9 Fund=3DOTPIX 12/16/05 Mr=3D 21.7 =
06/16/05|12/16/05
INDEX Mr-Ru% Ra-Ru% Ra% UI% UPI% ANN% MDD% =
and DATE
USPIX 37.08 62.06 46.66 0.99 109.71 113.75 3.47 =
09/16/05
UCPIX 33.69 52.24 40.24 1.99 45.24 95.58 6.57 =
09/16/05
UIPIX 34.25 52.16 39.59 1.36 64.76 93.79 4.20 =
09/02/05
URPIX 29.29 44.73 37.12 0.98 83.01 87.04 3.76 =
09/16/05
UWPIX 26.59 40.54 35.63 0.89 87.01 83.05 3.17 =
09/16/05
SOPIX 28.85 40.72 33.55 0.68 106.44 77.52 2.96 =
10/27/05
uopix 31.11 42.10 32.67 0.69 100.99 75.20 2.96 =
10/27/05
BEARX 17.82 27.65 31.51 0.66 101.78 72.18 2.96 =
10/27/05
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Content-Type: text/html;
charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=3DContent-Type content=3D"text/html; =
charset=3Diso-8859-1">
<META content=3D"MSHTML 6.00.2900.2802" name=3DGENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY>
<DIV><FONT face=3D"Courier New" size=3D2>Bearx is not even a good timing =
fund.. If=20
you look closely, it actually ranks below uopix as a bear fund... and =
uopix is a=20
bull fund. top bear fund I use to time is uspix...</FONT></DIV>
<DIV><FONT face=3D"Courier New" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Courier New" size=3D2>Below, the most important thing =
is the Ra%=20
col of numbers, 3rd from left....</DIV>
<DIV><BR><BR>Happy Guy, "Laissez les bons temps =
roulez"<BR>.</FONT></DIV>
<DIV><FONT face=3D"Courier New" size=3D2></FONT> </DIV>
<DIV><FONT face=3D"Courier New"=20
size=3D2> Signal: =
TS =20
- Cycle Index: JUNK - Sorted by column: Ra=20
<BR> =20
------------------------------------------------------------ <BR> =
S/Y=3D=20
7.9 &nb sp; =20
Fund=3DOTPIX &nbs p; =
12/16/05 =20
Mr=3D 21.7 =
06/16/05|12/16/05<BR> INDEX =20
Mr-Ru% =
Ra-Ru% & ;nbsp; =20
Ra% UI% =20
UPI% ANN% MDD% and=20
DATE<BR> USPIX =
37.08 =20
62.06 46.66 =
0.99 =20
109.71 113.75 3.47 =20
09/16/05<BR> UCPIX =
33.69 =20
52.24 40.24 =20
1.99 45.24 95.58 =
6.57 =20
09/16/05<BR> UIPIX =
34.25 =20
52.16 39.59 =20
1.36 64.76 93.79 =
4.20 =20
09/02/05<BR> URPIX =
29.29 =20
44.73 37.12 =20
0.98 83.01 87.04 =
3.76 =20
09/16/05<BR> UWPIX =
26.59 =20
40.54 35.63 =20
0.89 87.01 83.05 =
3.17 =20
09/16/05<BR> SOPIX =
28.85 =20
40.72 33.55 =
0.68 =20
106.44 77.52 2.96 =20
10/27/05<BR> uopix =
31.11 =20
42.10 32.67 =
0.69 =20
100.99 75.20 2.96 =20
10/27/05<BR> BEARX =
17.82 =20
27.65 31.51 =
0.66 =20
101.78 72.18 2.96 =20
10/27/05<BR><BR></FONT></DIV></BODY></HTML>
------=_NextPart_000_000F_01C60311.D43C0B30--
wrote:
> Maybe has been commented here before, but BEARX looks like a lake
> mirror reflection of the Dow over past decade:
Yes, because it's been net short.
I disagree with everyone else in this thread. I find BEARX to be well
run and quite useful as a hedge. However, it's not appropriate for
investors who don't really understand it or what to do with it, so
maybe you should pass on it.
I must say, though, that it's hard for me to imagine how a bear fund
can do so well in an up year for the markets and still get such
negative reviews. Tough crowd.
Darin
Loose On the Lead wrote:
> wrote:
>
>>Maybe has been commented here before, but BEARX looks like a lake
>>mirror reflection of the Dow over past decade:
>
>
> Yes, because it's been net short.
>
> I disagree with everyone else in this thread. I find BEARX to be well
> run and quite useful as a hedge. However, it's not appropriate for
> investors who don't really understand it or what to do with it, so
> maybe you should pass on it.
>
> I must say, though, that it's hard for me to imagine how a bear fund
> can do so well in an up year for the markets and still get such
> negative reviews. Tough crowd.
I thought I explained it,
but let me try again.
If I want to bet against the broad market, I will go for a pure bear
play that actually does short the market and NOTHING ELSE. Such as
USPIX or URPIX.
BEARX goes long on some things, like gold and some oddball things like
this beverage service stock they've got now. Those things don't
necessarily move inversely to the broad market so it's not the right way
to bet against the market. Gold moves up or down in its own cycle.
I prefer to keep my broader stock investments (whether long or short)
separate from my gold investments.
How BEARX did this year is irrelevant because the right decision this
year was not to bet against the market at all.
--
Steven D. Litvintchouk
Email:
Remove the NOSPAM before replying to me.
"Loose On the Lead" <> wrote
> I must say, though, that it's hard for me to imagine how a bear fund
> can do so well in an up year for the markets and still get such
> negative reviews.
If you are like me you invest to make money. BEARX was flat for the year.
A fund that is flat for the year is a waste of time. Your money is at risk
and you get no return.
I can't agree that the fund did well.
Steven L. wrote:
> I thought I explained it,
Yes, you did, and you had nothing positive to say about the fund.
That's fine, but I'm disagreeing with you. I said I found BEARX useful
for hedging, and you haven't addressed that application. A pure short
fund isn't what I want for hedging purposes because it lowers my
returns too much when the market does well. In a nutshell, if there's
a bad bear market, BEARX will do well. If there isn't, it stands a
good chance of not doing too badly. And it should hold up better
against unexpectedly high inflation than other bear funds because of
its gold stocks.
We all have different investing needs. BEARX has suited a couple of
mine.
Darin
Ed wrote:
> If you are like me you invest to make money. BEARX was flat for the year.
> A fund that is flat for the year is a waste of time. Your money is at risk
> and you get no return.
But in other years, BEARX has done well, so you wouldn't have been
wasting your time with it then. Doesn't that suggest that for you,
BEARX is not a bad fund generally, but just was not the place to be in
'05?
In your main response, you recommended against BEARX because the market
tended to go up. That's a totally different argument that seems to
contradict your usual ones.
Darin
"Loose On the Lead" <> wrote
> But in other years, BEARX has done well, so you wouldn't have been
> wasting your time with it then. Doesn't that suggest that for you,
> BEARX is not a bad fund generally, but just was not the place to be in
> '05?
It did have some good years, true, but I think when it performs well you
could do much better elsewhere.
The fund is 74% in short term treasury notes that pay less than money market
rates. If you think this is an example of a well run fund then all I can say
is that's why they make chocolate and vanilla.
If you believe in mean reversion (I do) then BearX is a very useful
addition to any portfolio. And the worse it does, the stronger the
case for it (because of mean reversion).
In 1999 the 'smart money' was chasing internet momentum stocks, and the
'cautious smart money' was chasing telecoms stocks (as a way of playing
the growth in the 'net'). Now the 'smart money' is chasing energy,
commodity, gold, real estate (and Google). What is striking, on the
internet, in discussion forums, is how close to the peaks you get
questions about 'how do I invest in [insert name of sector that is up
30% relative in the previous 6 months]'?
I found a paper recently based on misc.invest.stocks which showed just
how great the small cap, momentum bias of internet investors is.
Me, I am wondering about pharmaceuticals...
"darkness39" <> wrote
> What is striking, on the
> internet, in discussion forums, is how close to the peaks you get
> questions about 'how do I invest in [insert name of sector that is up
> 30% relative in the previous 6 months]'?
A very good indicator of when you should start paying close attention of
your holdings in these sectors.
> I found a paper recently based on misc.invest.stocks which showed just
> how great the small cap, momentum bias of internet investors is.
I always have small caps in my portfolio.
> Me, I am wondering about pharmaceuticals...
Me too.
darkness39 wrote:
> If you believe in mean reversion (I do) then BearX is a very useful
> addition to any portfolio.
Two or three years ago, a poster compared the returns of BEARX to those
of the S&P 500 (VFINX) and the Lehman Aggregate Bond Index (TBM),
showing that BEARX's returns were the worst of the three and that there
was no reason to invest in it. I showed that, given the choice between
holding VFINX with BEARX and VFINX with TBM, you got better returns
with less volatility if you rebalanced between VFINX and BEARX.
Unfortunately, Google Groups seems to have lost that post.
Darin
darkness39 wrote:
> If you believe in mean reversion (I do) then BearX is a very useful
> addition to any portfolio.
Sorry, I cannot even define mean reversion in the context of BEARX whose
types of assets fluctuates. I don't understand mean reversion in the
context of a portfolio whose mix of assets keeps shifting around,
whether it's one of those asset allocation funds or BEARX. How can an
asset allocation fund that used to have, say, 60% of its assets in
stocks vs. bonds "revert back to the mean" after it's changed its
holdings to be only 40% in stocks?
> In 1999 the 'smart money' was chasing internet momentum stocks, and the
> 'cautious smart money' was chasing telecoms stocks (as a way of playing
> the growth in the 'net'). Now the 'smart money' is chasing energy,
> commodity, gold, real estate (and Google). What is striking, on the
> internet, in discussion forums, is how close to the peaks you get
> questions about 'how do I invest in [insert name of sector that is up
> 30% relative in the previous 6 months]'?
In fact, that has been one of my trusted sentiment indicators for all
the years I've been browsing this NG.
I'm hanging on to my gold investments because so far, there does not
appear to be a lot of interest in gold funds from newbies, despite the
rise in gold that has already taken place. So far, gold has been pretty
much of a stealth bull market that newbies haven't noticed.
> I found a paper recently based on misc.invest.stocks which showed just
> how great the small cap, momentum bias of internet investors is.
Gee, what a surprise. NOT.
--
Steven D. Litvintchouk
Email:
Remove the NOSPAM before replying to me.
Steven L. wrote:
> darkness39 wrote:
>
> > If you believe in mean reversion (I do) then BearX is a very useful
> > addition to any portfolio.
>
> Sorry, I cannot even define mean reversion in the context of BEARX whose
> types of assets fluctuates. I don't understand mean reversion in the
> context of a portfolio whose mix of assets keeps shifting around,
The mix doesn't shift around that much, Steven. It's always bearish as
long as the yield on the S&P 500 is less than 3 percent. The details
aren't crucial. If the market goes down a lot, the fund will do well.
If the market goes up a lot, it won't.
A fund that's specifically short the broad market is more predictable,
but if you mix it into a portfolio that's long the market, what you
basically get is fancy cash. The shorts cancel out the longs. BEARX
often goes down less than the market goes up and goes up more than the
market goes down. That's not as much the result of basic strategy as
it is the result of good management.
Darin
I didn't realise this is the guy who does 'Behind the Numbers'. That
is a *very* serious institutional product-- I know fund managers who
use it very heavily (did someone say 'Krispy Creme donuts'?). It flies
smack in the face of efficient markets theory, but the reality is
companies with dodgy accounting *do* tend to underperform and there is
an arbitrageable opportunity there.
I didn't realise his analysis was in any way available to retail
investors. This is the stuff you pay hedge fund managers 200 basis
points plus 20% performance fee AND you have a $1million minimum on.
So since his street cred has now just gone up 1000%, to the fund
itself.
What I noticed is that during a bull market of the last 3 years, it has
done OK. Which is counterintuitive. Also we have been going through a
cycle of improving earnings quality (Sarbanes-Oxley) when logically
this strategy should let the investor down.
There is some pretty clever stuff going on here. Prima facie, on the
record of the manager (and despite a horrendous website, and slightly
crank 'the sky is falling' macro views) I would recommend it as a risk
diversifier.
darkness39 wrote:
> I didn't realise this is the guy who does 'Behind the Numbers'.
Yep.
> What I noticed is that during a bull market of the last 3 years, it has
> done OK. Which is counterintuitive.
It's good stock-picking...but he's helped his returns with the gold
stocks, too.
> There is some pretty clever stuff going on here. Prima facie, on the
> record of the manager (and despite a horrendous website, and slightly
> crank 'the sky is falling' macro views) I would recommend it as a risk
> diversifier.
So would I, as long as the potential investor understood what he or she
was buying.
What I tried to show with the table a couple of years ago was that
BEARX can replace bonds in an MPT/rebalancing strategy, too, and
because the fund is more volatile than bonds and has a negative
correlation with the stock market, you don't need to use as much of it.
In other words, if you use BEARX instead of bonds, you can hold more
stocks and still get the same MPT-style risk and return profile.
That's the theory, anyway...and it held up in the limited experiment I
posted.
Darin
If I was an institutional investor I would give him some (small)
percentage of my fund to run as part of my hedge fund/ absolute
portfolio-- I suspect he is the kind of guy who can generate real alpha
(haven't checked Morningstar on the retail product)-- or at least his
methodology can).
The nature of the industry now is the alpha generators are moving to
the institutional-only products (or HNWIs). Swensen (Yale Endowment)
says as much in his new book I believe.