Anyone have advice on going short on the ultra longs and ultra shorts. It seems these devices always lose money. I was tracking the SKF vs DJUSFN and at one point they were both down. What is the down side of just shorting these ultrashorts?
Not at all. I'm not sure if you realize how reserves at annuity companies work. Btw, this post came off as condescending. Care to elaborate? And, just like today, 8,000 keeps showing support. Granted, it has only been tested a few times in the past two months, but I'm really believing that this is the bottom of the market. Obviously, time will tell.
It happened, didn't it? We got as high as 942. And then the market was too weak to push any higher. Looks like we're out of the danger zone again (that Dow 8000 is really proving to be quite a formidable floor), but I'm not a day trader so I can't keep up with the whipsawing. The fundamentals have to come back into play. Hopefully they do so when this earnings season starts to wind to a close. It's obvious that until that happens, we can't trust even the surest of technical breakout patterns. As for the recently concluded selloff, basically the S&P broke down out of its upwards channel presumably upon rumors that the banking industry was sicker than anyone thought. Once that happened, there really was little support beneath to stop the slide to 810 even on low volume.
The SKF and other ultra ETFs shed a bit of money recently after a dividend issue (if that's the right term--I don't remember). There was some kind of disbursement to holders that caused them to all drop in value. That's why you can't treat them as long term instruments, because they're not.
I realize that insurance companies are scrambling: Hartford Aims to Take Risk Out of Annuities <i> Hartford Financial Services Group Inc. is racing to revamp a core product that got hit badly in the global credit crisis, an overhaul plan that could help set the future of the 199-year-old insurer. The stakes are high. Despite a brief run-up lately, Hartford shares fell nearly 19% on Monday in a broad sell-off of insurance stocks as Standard & Poor's kept the industry on negative outlook and Wall Street analysts cautioned about possible mounting industrywide bond-portfolio losses.<b> Shares of Hartford are off 83% over the past 12 months. Much of investors' concern about Hartford stems from its reliance on the variable annuity, a tax-advantaged type of mutual fund typically sold with guarantees of minimum investment returns. The products have been a huge hit with baby boomers in recent years. Variable annuities bought by individuals accounted for more than 20% of Hartford's $3 billion in profit during 2007. But, last year, these annuities proved a liability, as many big players had to build up reserves and boost capital levels to show regulators they could make good on promises to consumers. Hartford posted a $2.6 billion third-quarter loss, including a $932 million charge tied to its annuity business. On Oct. 6, it announced a $2.5 billion capital infusion from German insurance giant Allianz SE.</b> Hartford long has been a leading player in this corner of the financial world. To rev up sales in the 1980s and 1990s, insurers started guaranteeing return of buyers' principal. In 2002, Hartford had one of the industry's biggest innovations: It introduced an easier way for customers to start and stop withdrawals from their annuities. Most annuities didn't allow such flexibility. Hartford's "Principal First" product promised withdrawals of up to 7% a year to recover the principal, with an opportunity on the fifth anniversary of the contract to add investment gains to the guaranteed amount. Hartford's innovation proved so popular with boomers that it set off an annuity arms race. Insurers added versions that lock in investment gains annually, monthly or even daily. Some promise to boost the guaranteed amount by 5% to 7% a year. A version guaranteeing lifetime withdrawals is the most popular today. But last autumn's double whammy of credit-market meltdown and stock-market crash dramatized the cost to the insurers of the guarantees. <b> Now, volatile stock markets and low interest rates have pushed costs of companies' risk-management programs, including hedging with financial derivatives, to sky-high levels -- eating into profitability. The challenge: rejiggering the offerings to make them generous enough to attract consumers, while keeping them lucrative for the company. "This game's going to change," Chief Executive Ramani Ayer told analysts in December. Mr. Ayer has directed a team of several dozen senior-level managers to "de-risk" its annuities book. Major modifications of the annuity lineup are expected in the second quarter, the company says. Mr. Ayer says the team can't do its work "soon enough." </b> Hartford and some rivals already have raised prices, and some have trimmed features. Kenneth Mungan, a senior consultant at Milliman Inc., says more-substantial change lies ahead as "the status quo is simply unsustainable." <b> The current effort to reel in risk isn't a first for Hartford. In launching its 2002 product, Hartford relied on reinsurance. But brisk sales quickly burned through the then-available reinsurance.</b> It then set up a hedging program. The company says it looks at the sum total of its risks, determining how much it will retain and how much it will transfer. </i>
Ummm, one company does not an industry make. A lot of companies are starting to reel in some of their products, mainly to keep their reserves high enough to maintain their rating. Regardless, insurance products are guaranteed by each State. Nobody has ever lost their principal on an annuity since they were created 150 years ago. Nobody. (and we aren't talking about surrender charges. We are talking about an annuity held to maturity.) It would take the insurance industry as a whole to collapse, which the Fed would never allow to happen. Quite frankly, we are having the best year ever, so far. Not sure what your tangent was about, however. I certainly wasn't talking about them. But you opened your mouth.
Some financial stocks are rocketing today ... I'm guessing it's a follow-up to the huge sell-off yesterday followed by a few big wigs buying shares in their own company (Lewis and Dimon at BAC and JPM) today?
LOL. Any of you watching Fast Money? They showed the dip in Intuit's stock price (low of the day supposedly) when Geithner said he used Turbo Tax software to do his taxes. Hilarious.
Without knowing much about it, that's the problem though I think for a non-technician interpreting a lot of this technician stuff, one technician's floor is another one's ceiling.
that was awesome. you could tell he didn't want to say the name. and if this horrible economy has brought me nothing else, it has brought jeff macke. that guy is just hilarious. i love Fast Money overall and think just about everyone is good on there, but it's not the same if Macke is not on the panel. the uber-cynicism and sarcasm in everything he says is just great. wanting to impeach obama for citigroup going down yesterday, wanting to kiss ken lewis for helping send it up today. and i wanted to put buy some more AAPL yesterday but at least i still held on to the shares i had left for earnings. you just can't seem to stop these guys and with expectations so low from the 4th quarter there was certainly a good chance at a pop. hopefully enough of it holds for me to sell when the market is open.
Macke's hilarious, but at times can be a pain to listen to as he nearly explodes trying to get words out. He's probably the one guy I give the most credibility to on that panel though (of the regular panel, anyway).
Is there a site that shows the best performing and lowest performing stocks of the day? I know CNBC does this on their broadcasts, but is there a tool I can research myself? Yahoo and Bloomberg don't have anything.
