HOW ONE iTuliper IS INVESTED?

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

jim, is that 6.68% your ytd return, or an average gain for the positions for whatever their holding periods have been?

That is the gain on the positions in the table from whenever the first portion of any position was opened.

My gain YTD is 5.96%.

[jk]

Re: HOW ONE iTuliper IS INVESTED?

jim, is that 6.68% your ytd return, or an average gain for the positions for whatever their holding periods have been?

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

2/22/2008	POSITION	% INVESTD	NOW GAIN	% GAIN	ALLOCATION
DJ US FINANCIALS	UYG	0.94%	5	0.05%
DOW	DDM	3.96%	1,867	4.41%
NDX	QLD	3.82%	-2,099	-4.70%
SPX	SSO	4.24%	1,549	3.38%
RUT	UWM	4.27%	617	1.31%	17.24%
GOLD & SILVER	CEF	0.84%	3,390	56.13%
PM MINING	GDX	1.82%	593	3.00%
GOLD	GLD	2.51%	6,696	31.40%
SILVER	SLV	1.60%	3,687	25.91%
GOLD	GTU	1.32%	5,110	53.17%	8.10%
METALS	RJZ	1.02%	1,680	17.39%	33% IN PM'S
COMM AGRIC	DBA	1.10%	2,391	24.17%
COMM AGRIC	RJA	1.00%	1,035	10.27%	3.11%
GLBL ALT ENERGY	GEX	0.41%	-186	-3.89%
NUCLEAR	NLR	0.91%	777	8.25%
DJ US OIL GAS	DIG	0.99%	753	7.35%	2.31%
YEN	FXY	10.01%	9,890	9.71%
YIELD ON 30YR-BOND	RRPIX	3.31%	-546	-1.46%
HEDGED EQUITY	HSGFX	18.74%	6,680	3.30%	32.06%
		62.82%	43,888	6.68%
	BOLD GREEN SYMBOLS = MOVE +200% OF RESPECTIVE INDICES

Nervous as a cat on a hot tin roof in the Texas summer sunshine, that is I with regard to my long positions in the Proshares Ultra Funds.

I thought I was doomed, I say doomed!, on these things Friday, until "rumor" or "gossip" turned the market into my favor.

Looking back at the markets' actions of the past five weeks, I have chosen mental stop points for my +200% positions, which if hit, will trigger me to sell them--assuming I am watching the market at that possible moment.

SPX 1316.75, SSO 66.34
DJI 211.14 DDM 69.9
NDX 1714.86 QLD 67.86
RUT 680.94 UYM 47.36
UYG 32.76

DIG is also of same ilk as above, but I don't have that much bet there, so I don't have a ready plan to consider when I would get out of it if the market moves against it--which it would probably do if it moves against the five in the list above.

I've never sold anything with a market order that hit an exact stop loss point, so assuming I did, I could lose ~7500$ from where I was Friday on those five funds and MAKE my total loss on these bets to ~-3.5%. Probably would end up losing more than that.

My small positions in PM's, Comm, Energy turned last week out to be in the green.

I ended Friday off 0.11% from my portfolio highs for the year.

My one year gain is 15.69%, two years 11.06% compounded, three years 12.78% compounded, and since end of 1999 or first of 2000 when I achieved maximum make-believe wealth, -.085% compounded.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Today I opened ~0.5% position in GEX today and ~1.0% position in UYG.

http://www.ise.com/WebForm/viewPage....rue&link1=true

ISEE Index

The ISE Sentiment Index is a unique put/call value that only uses opening long customer transactions to calculate bullish/bearish market direction. Opening long transactions are thought to best represent market sentiment because investors often buy call and put options to express their actual market view of a particular stock. Market maker and firm trades, which are excluded, are not considered representative of true market sentiment due to their specialized nature. As such, the ISEE calculation method allows for a more accurate measure of true investor sentiment than traditional put/call ratios. Because of this distinctive calculation methodology, ISEE has been referenced by The Wall Street Journal, Barron’s and other leading publications as a useful investment tool. Investors and investment professionals can use this unique put/call value to determine how other investors view stock prices, as well as to supplement and validate their own market views. ISEE is free.

http://www.ise.com/WebForm/viewPage....rue&menu0=true from this link, I track the

All Securities

Time	Calls	Puts	Total	ISEE
16:15	398652	550914	949566	72

That 72 final number from today 2/13/08.

Previous Trading Day	72	2/13/08
10-Day Moving Average	93	01/31/2008 - 02/13/2008
20-Day Moving Average	97	01/16/2008 - 02/13/2008
50-Day Moving Average	108	12/03/2007 - 02/13/2008
52-Week High	212	5/7/07
52-Week Low	51	8/7/07

All these data are available at the site, and can be imported into Excel.

Edit: In case it isn't obvious the 72 is actually the number of calls above divided by the number of puts, which comes out 0.72 and the keepers of the index multiply it by 100.

72 is indicative of bearishness. Despite the SPX being off its recent low by 4.33%, DJI up 4.85%, Nasdaq up 4.18%, NDX up 4.71%,
RUT up 7.5%, and the $XVG (VGY) up 7.71%, there is no bullishness among the ISEE individuals from which the above data are derived.

I interpret that as good if one is long equities, which I am to the extent of ~18% allocation into +200% ETF's.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

i just read somewhere that barton biggs was short oil from 30 to 70. nonetheless, a rally is quite plausible as long as there is no bad news. also, this weeks action is likely heavily influenced by options expiration.

I don't look upon Barton as dog, but over the years as I remember he has made some worthwhile calls mostly contrarian I believe.

Who isn't wrong sometimes?

[nathanhulick]

Re: HOW ONE iTuliper IS INVESTED?

EJ says gold is a bubble. It will go up, but then go down . . . and it's been said here many times that it's hard to catch a top.

What about taking that cash and buying long-term T-bonds at around 20% (interest rates predicted by EJ in KaPoom theory), then collecting 20% for the next 25 - 30 years (depending on when the Fed calls them)?
Of course, you'd have to try and catch the top with bonds, too.

Or maybe a combination of both . . . ride gold up, then buy T-bonds.

I just want to point out here, that you wouldnt have a return of 20% for 25 - 30 years in these long bonds unless you believe that interest rates are going to stay at 20% for that entire time.

If interest rates dropped back to "normal levels" (5-10%??), you would have a large gain on the bond at that time, at which point you would only be getting a return of whatever the actual interest rates were. (from an accounting standpoint, the value of the bonds would have increased and your rate of return would decrease)

I am sure that I did not explain that very well, but hopefully it makes sense.

[algerwetmore]

Re: HOW ONE iTuliper IS INVESTED?

I agree with Jim, as the bulk of my IRA is split between Hussman Strategic Growth Fund and the Hussman Total Return Fund.
However, my wife's IRA is mostly in gas/oil royalty trusts, central fund of Canada and a hard currency fund. I guess I'd rather hit for average than swing for the home run.

[jk]

Re: HOW ONE iTuliper IS INVESTED?

I'll be god, (I'm dyslexic) I found a bullish item regarding Barton Biggs' thinking that the market is "at or very near an important bottom" and may be led higher by banks and brokerages when a rally occurs.



http://www.bloomberg.com/apps/news?p...U2I&refer=home

I'll be watching UYG +200% Financials on the opening tomorrow.

http://www.proshares.com/funds/uyg.html?Overview

Edit: here is chart on UYG. There has been a tremendous pickup in volume, which either represents late capitulation by those who were long, or either buying by individuals looking for a bottom.
http://bigcharts.marketwatch.com/int...x=25&draw.y=12

i just read somewhere that barton biggs was short oil from 30 to 70. nonetheless, a rally is quite plausible as long as there is no bad news. also, this weeks action is likely heavily influenced by options expiration.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

I'll be god, (I'm dyslexic) I found a bullish item regarding Barton Biggs' thinking that the market is "at or very near an important bottom" and may be led higher by banks and brokerages when a rally occurs.

Biggs correctly forecast U.S. equities would rebound from declines in March and August last year. On March 16, following a 5 percent decline by the S&P 500 from its Feb. 20 peak, he said stocks were approaching a bottom and predicted a gain of as much as 15 percent for the index in 2007.

The S&P 500 rose as much as 12 percent from that level before retreating to end the year with a 3.5 percent gain.

On Aug. 16, after a 9 percent decline by the index, Biggs said it was bottoming and predicted a rebound. The benchmark rose almost 11 percent over the next seven weeks.

http://www.bloomberg.com/apps/news?p...U2I&refer=home

I'll be watching UYG +200% Financials on the opening tomorrow.

http://www.proshares.com/funds/uyg.html?Overview

Edit: here is chart on UYG. There has been a tremendous pickup in volume, which either represents late capitulation by those who were long, or either buying by individuals looking for a bottom.
http://bigcharts.marketwatch.com/int...x=25&draw.y=12

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Look around, does anyone see anything that is bullish for equities?

Well, there certainly is not any bullishness in any news I've crossed in a while.

Today I added a third more to my +200% positions in the ETF's DDM, QLD, SSO, and UWM based respectively on the DJI, NDX, SPX, and RUT.

Why? Saturday, I noted in

in discussing weekly put/call data for the OEX

that a rare low reading of 0.65 was recorded for the weekending 2/8/08 and offered some discussion regarding that datum.

I also track the daily CBOE put/call rations for Equity Options as well for the S&P 100 (OEX) http://www.cboe.com/data/mktstat.aspx


DATE CALLS PUTS RATIO

02/05/08		32,919		22,568	0.69
02/06/08		27,150		16,856	0.62
02/07/08		25,315		16,671	0.66
02/08/08		35,468		16,931	0.48
02/11/08		20,514		12,688	0.62

{SORRY FOR SCREWY FORMATTING IN TABLE}

Above are the data for the past five days through last night. Since 1/3/06, 279 market days, there have only been 39 days when the put:call ratio was less than 1.0. There have not been five days running when the p/c ratio was less than 1.0 since 4/18-4/25/05 when there were six straight. It turned out that 4/20/05 marked an interim bottom using the SPX, and a nice entry point for being long equities.

There are similar instances where what I consider strong bullishness in the OEX p/c ratio suggests going long. This interpretation is not of course infallible.

At any rate, my assessment of the equity market using a number of recent readings for AAII sentiment, these put/call data just mentioned, relatively high p/c readings in the Equity Options (suggesting fear amongst small investors), and what I see as generally a very bearish atmosphere in general make me want to add to my speculations on the long side.

I also opened a position ~1% in DIG a +200% ETF based on DJ US Oil and Gas Index. http://www.proshares.com/funds for two reasons, I am underinvested in energy and the chart of DIG presented a classical buy signal using the RSI indicator and the MACD had turned up and the MACD histogram had just turned positive.

Edit: Good man, FRED, thank you. FRED made the table better, headings still off, but in correct order.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

PFIC = Passive Foreign Investment Company. According to silveranalysis.com:

I could say, "holy shit!!", but writing I really can't say that.

Thanks, Zoog. This is something I'll get squared away.

[zoog]

Re: HOW ONE iTuliper IS INVESTED?

I don't think that question came up on my tax program last year, and if my life depended upon it, I hope it doesn't, I have no idea of what form 8621 is.

Do you think the IRS will come after me? I've got my tax stuff somewhere here on my messy desk, so I'm make a note to check form 8621.

Thanks Merry.

Incidentally, what is a PFIC?

PFIC = Passive Foreign Investment Company. According to silveranalysis.com:

CEF, on the other hand, should be eligible for the 15% capital gains rate. However, because CEF is considered a "passive foreign investment company" (PFIC), it is normally taxed at very onerous rates! Fortunately, by filling out tax form 8621, and making the qualified electing fund (QEF) election, CEF should qualify to be a QEF. There is a document on their web site which addresses their PFIC/QEF status in detail. You must file this form in every year which you own the shares (outside an IRA or other tax-protected account). In a taxable account, acheiving a 15% rate vs. a 28% rate makes a big difference, and in my opinion fully makes up for the risk associated with buying at a premium, assuming you only intend to sell at much higher prices. However, because of the complications inherent in investing in PFICs, I highly recommend you speak to an accountant when buying CEF in a taxable account. It is possible to be charged up to a $10,000 dollar penalty from the IRS if you don't file form 8621 when you are supposed to!

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Hi Jim, do you file form 8621 for CEF since it is not in an IRA? I manage my Mom's IRA and non-IRA accounts and I also do her taxes. I found out that CEF is considered a PFIC when it is not in an IRA so I had to make sure that form was filed when I did her taxes. I hope I did it correctly last year. It didn't seem to be that hard.

Thank you.

I don't think that question came up on my tax program last year, and if my life depended upon it, I hope it doesn't, I have no idea of what form 8621 is.

Do you think the IRS will come after me? I've got my tax stuff somewhere here on my messy desk, so I'm make a note to check form 8621.

Thanks Merry.

Incidentally, what is a PFIC?

[merry]

Re: HOW ONE iTuliper IS INVESTED?

I own CEF and GTU outside our IRA's ...

Hi Jim, do you file form 8621 for CEF since it is not in an IRA? I manage my Mom's IRA and non-IRA accounts and I also do her taxes. I found out that CEF is considered a PFIC when it is not in an IRA so I had to make sure that form was filed when I did her taxes. I hope I did it correctly last year. It didn't seem to be that hard.

Thank you.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

1/31/08

Since last note, on 1/28/08 I opened a position of ~0.84% in NLR, then I read here that we're running out of uranium in 50 years, which for me is no worry, then here someone says we'll or they'll go to using plutonium, then no worry. The USA cannot do without electricity, nor can any other place I've visited in the last 40 years, the exception I saw were villages in Vietnam country side, and I guess some of them may still exist without electricity. Nuclear is the ultimate long-term source, but then I am a "nuke the whales" kind of guy.

Today the Gold/XAU ratio hit 5.0 and I added ~0.9% to my position in GDX.

The table below is my current allocation.

My gain this year is 5.37%. My one-year gain is 15.15%, two-year 10.89% compounded, and three-year 13.01% compounded. My return since my portfolios' high in early 2000 is -0.91% compounded.

On closing bases, for 2008 the DJI is -4.63%, SPX -6.12%, Nasdaq -9.89%, NDX -11.68%, RUT -6.88%.

1/31/2008	POSITION	% INVESTD	NOW GAIN	% GAIN	ALLOCATION
DOW	DDM	2.74%	2,712	9.74%
NDX	QLD	2.70%	-104	-0.34%
SPX	SSO	2.92%	2,245	7.43%
RUT	UWM	3.03%	2,965	9.65%	11.38%	+200% OF INDEX
GOLD & SILVER	CEF	0.80%	2,879	47.67%
MINING	GDX	1.81%	381	1.93%
GOLD	GLD	2.46%	6,099	28.60%
SILVER	SLV	1.51%	2,589	18.20%
GOLD	GTU	1.31%	4,930	51.30%	7.89%	PM'S
METALS	RJZ	0.93%	660	6.83%
COMM AGRIC	DBA	1.00%	1,203	12.16%
COMM AGRIC	RJA	0.92%	171	1.70%	2.84%	COMMODITY
ENERGY	NLR	0.85%	69	0.73%	0.85%	ENERGY
YEN	FXY	10.12%	10,826	10.63%
YIELD ON 30YR-BOND	RRPIX	3.18%	-2,134	-5.69%
HEDGED EQUITY	HSGFX	18.58%	4,392	2.17%	31.87%	OTHER
	INVESTED	54.84%	39,884	6.99%	GAIN ON NON-CASH
	CASH	45.16%
		100.00%