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June 23, 2006

Comments

Raja Sekhar

Good comparison between the music bizz and wall street (you should include hollywood too, how bad are movies today?). I think rampant nepotism is part of the problem - it encourages the risk-averse-lemming behavior you're talking about. I don't know much about FoF systems, but uncreative thinking leads to mediocre returns. Unfortunately the same people who will see a movie or listen to music just because it is heavily promoted are the people who want to buy ETFs for ETFs' sake. So I hope that robotic thinking is punished in entertainment and wall street sales but I'm not hoping too hard.

muckdog

Yeah, but even though the ETFs are new, Profunds and Rydex have had mutual funds available that do the samething. I don't know how the ETFs work, but the funds that advertise 2x the performance can have a bigger impact of that because of compounding. It's 2x per day, so if we have a streak of 10 days it can either be extremely wonderful or extremely painful.

Stephen L. McKay

From one Dylan fan to another, I think systemization has it's place, but not at the expense or exclusion of free thinking and innovation, which should always be promoted and fostered, lest we all become slaves of the system itself. Systemization should serve to free us up, so we can spend more time on creative endevors. The problem is that when people are making money they seem to get caught up in the frenzy of the moment and they lose sight of the big picture, and Lets face it, this can be easy to do. The problem with the systemization that you are describing is that it totaly lacks flexability, and this is a big mistake!As for leveraging, I see a major problem with all the leveraging going on right now, and I worry that it will come back to bite us all in a very big way. You mentioned these new Pro Fund ETFs, and I hope the average retail investor understands the risk that comes with the magnification of movement. That's not all, look at the leveraging going on at the PE level, and I'm concerned about the ramifications with all the CLOs out there should ABL defaults go on the rise. I think we are walking down a dangerous road.For all our knowledge and education, and what we call sophistication, we are still at a very primitive place in our psycological evolution. We sit back and watch a bad situation unfold before us like a bunch of school kids observing a fight breaking out, then when we realize something is really very wrong, we overreact in the opposite direction!

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About Me

Cody_1a

  • CODY WILLARD
    THE BIG APPLE, NEW YORK
  • Cody Willard is the general manager of CL Willard Capital. Find him at TheStreet.com, the Financial Times, on TV, or even playing that rock n' roll.

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