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« Weighing the Week Ahead: Questions Answered at Last | Main | Market Outlook: Fundamentals versus the QE II Distraction »

November 09, 2010

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Mike C

As you may well understand, this is an important subject but not an urgent one. I want to do a good job.

Look forward to it. Here is the link, although I was mistaken that it isn't actually Barry but a guest post on this blog:

http://www.ritholtz.com/blog/2010/11/etf%E2%80%99s-firm-foundations/

oldprof

Mike C -- Yes, I studied the report and the replies. I'll write on this again. As you may well understand, this is an important subject but not an urgent one. I want to do a good job.

BTW, I did not see a comment by Barry Ritholtz. Do you have a link?

Jeff

Mike C

Summarizing -- I am suprised by the Kauffman conclusions and I am looking at them with an open mind. You should do the same.

Any follow-up here? If I read your post correctly, it seemed like "hey, maybe there is something here". I'm sure you've seen the commentary from bloggers like Random Roger, Ritholz, and comments on IndexUniverse, so I am curious if you've had time to review the report in more detail and come to some more definitive conclusions?

RIA compliance

The triple ETF's are a huge risk, IMO.

Gary_UK

I heard this is a bullish blog?

Wondered if you'd all noticed that Pomo has failed to lift the market Monday and today (Friday).

Will bulls keep buying the dips?

Or will they get out now, before SPX 950 in a few weeks?

Kid Dynamite

Jeff, the problem of heavily shorted stocks is a stock loan issue, not an ETF issue. The result, if there is a problem is a short squeeze - not a blowup. And the Kauffman paper made a massive fundamental error in this regard, suggesting that an ETF sponsor could find itself short on cash while trying to buy underlying basket shares to create new ETF shares. It doesn't work like that.

IU had a few good pieces on it:

http://www.indexuniverse.com/sections/blog/8376-kauffman-report-on-etfs-the-first-lie.html

http://www.indexuniverse.com/sections/blog/8380-kauffman-scare-tactics-on-etfs-plain-wrong.html

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