Quote from atticus:
He's long shares and selling vol futures. As an analogy, would you consider loading up on stocks and then leveraging into short puts as a viable buy and hold strategy?
I was arguing against his contango comment, and he replies by quoting the WSJ.
Mea culpa. If we head to 1500 this year he'll make a killing.
Quote from dwpeters:
He is the one that came here asking for advice and comments. I think it's been said enough times that he could have more downside protection. But then I think it was questioned how he earned 60% a year, and his answers just don't add up.
This is something I looked at so I happen to be set up to backtest this. Shorting a basket of 3X ETF's returned 5 to 15% in 2010, not 60%. Now certainly it would have been possible to trade these ETF's more profitably than in my tests, but that would be trading them. I measured taking advantage of what I think would more accurately be described as volatility decay (not time, these aren't options) and there wasn't enough volatility in 2010 to produce anywhere close to 60% returns from the decay.
[. Besides that around 80% of my portfolio (500k) is allocated in fixed income/dividend producing shares, generating an income of more the 3k every month, which is being reinvested monthly in different securities. [/B]
Quote from luisHK:
That's around 8% yeld, quite high. Besides isn't the value of the securities involved decreasing by about as much as the dividend value when they pay it out, hence the dividend reinvestment per se won't bring you anywhere close to the 60% AR ?