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The Underappreciated Impact Of Leveraged Stock ETFs
Occasionally, you'll see a mainstream financial media article about leveraged ETFs, but such pieces
Oh s@@t. Yet another accelerant. I’m old enough to remember the ~26% drawdown in one day in the early 80’s.
Thank you once again for alerting us to these barely acknowledged “under the covers” forces which impact day-to-day and week-to-week real & significant market flows.
Once upon a time this stuff didn’t matter very much, if at all. Now they drive share prices.
Your readers, including me, owe you a big ol’ thank you.
H-Man, sometimes when you cook an omelette, you lose control (to much heat, to much cheese, to much of everything) and it turns into scrambled eggs with stuff. It won’t take much for this market to become scrambled eggs but with really ugly stuff.
Do these things need to exist?
I know, slippery slope, which leads to “do we (portfolio managers) need to exist” and of course we do, being truly vital to human welfare in some way that I can’t quite articulate but believe must exist.
No, these things don’t need to exist. Anybody who “needs” leverage knows how to get it. Anybody who doesn’t know how to get leverage doesn’t need it.