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Anybody who is long at these prices has to consider there is obvious demand destruction when oil is above 60. Considering there will be expansion in oil production for 2006 I think we’ll see oil 50 much sooner than 70s.

How are they able to produce much cheaper ethanol? Is it sugar based ethanol that much cheaper? BTW, for the record I recommend Honda CR-V.

So let me get this straight: Let’s say you have 120 months of historical data. We want to evaluate monthly profit and max drawdown. You take random 20 months of the historical data (that is you don’t generate random price path) and then you apply your strategy. You repeat this n times...

I have also a question. Lot of people talk of backtesting in conjunction with MC simulations. I understand the value of Monte Carlo in option pricing, I understand (somewhat) the value in backtesting, but this is what puzzles me: When you have trading method that exploits non-randomness when...

Tell that to my wife. :D

Sure, when market drop 10%, you are wiped out. Not cool. :( Oh and BTW the return would not be 96% but 60% (10*(10-4)).

What you are talking about is structured index product. You can get very creative by combining futures, options, bonds, stocks. Here is an example from “Options as a Strategic Investment” by Lawrence G. McMillan Let's look at the structured index product to see how it might be designed...

If US dollar goes to hell, DOW may be 100,000. Except 100,000 will have less purchasing power than 10,000 today. :)

As Igor said, dividends are also priced. The only scenario where make sense to hold index futures long term is on the short side. This way if the risk free interest is 4% you may want to buy T-bills and hence market have to grow more than 8% to start loosing money. If you believe that we are...

Nope, this is for option pricing, not futures.

Yes, you are correct. The futures return will be underperforming SPY by risk-free rate. If this was not the case you could put fully collateral in T-bills and outperform the market by 4%. You would be mega star in mutual fund industry!

Not directly linked to the oil bubble but nevertheless interesting read. The Case of the Missing Petro-Dollars Stephen Roach http://www.morganstanley.com/GEFdata/digests/20051128-mon.html

What’s the status of getting some oil options with IB?

It's really simple. Stocks represent the economy. So long the economy grows (in real term, inflation adjusted), stocks will provide real return. If you take all possible stocks out there, blue chips, penny stocks, etc. their aggregate return can not be higher then GDP growth (on the long...

Had he not made such a grave mistake he would have 3.434 billion in net income! :eek: :D

So true. I used to participate in math an physics contest in high school some 15-20 years ago. Kids from Eastern Europe were having vastly superior results. So following Copernicus' logic, US science was lagging in the late 1980s ...:D

Since when do we care what reporters are saying? Beside, the bias is natural. Only very small minority (i.e. short sellers) have interest of market going down. Everybody else will applaud… The brokerage industry loves bull market, everybody trades more, mutual fund manager get their “well...

As a consumer you will postpone your buying decision because you’ll speculate you can get the product/service cheaper. This cause demand to fall which feeds the deflation further. As a producer/service provider you have to make budget plan to cover your expenses. While some of the expenses...

We'll see 45$ in few months.

On this day, 18 years ago, the Dow fell 22.6%, the largest one-day decline in recorded stock market history.