I got a couple of reasonable "oh no you di-ints" on the post this morning that tried to compare complex products versus simple.The fund in question is TFS Market Neutral (TFSMX).My only observation was that the fund is complicated. One reader noted that it has more than bounced back from its August 2007 low and another reader said that he doubted that staying simple could match the result from TFSMX over varied market conditions.The chart goes back to the inception of the Rydex Managed Futures Fund (RYMFX) which I own. The chart also shows two of the hotter sectors over that time, as measured by sector ETF, as well. It would be fair to criticize the chart as not being long enough but it has been a wild 17 months and it is as ...

A couple of great questions came in on the Seeking Alpha version of this morning's post about run-of-the-mill bear markets and I thought it would be useful to post the questions here and how I answered them.Why do you think we won't have a decline similar to what we had in '00-'03, which was a lot more than 30%?Markets cut in half every so often; the great depression, the mid 1970's; the start of this decade and I also know there was a depression in the 1870's but do not know what the market did then, there was also a bank panic in 1907 that lead to a 37% decline that year. If you notice you see the gaps in time ranging from 22 years on up.I believe the reason for this is that the market "can't" cut in half so soon after doing ...

I have been interested in and invested in Vietnam since the fall of 2006. I bought the Vietnam Opportunity Fund (VOF.L) at $2.48, sold half of it at $4.73 a few months later and still have some shares now trading at $1.99.The fund hovered along at down a little for the year before starting to swoon about a month ago, consistent with the VN Index which is down 59% YTD.The GDP has been en fuego, but less than in China, which has proven too hot to handle as now inflation appears to be running at 25-30%.As I wrote several times along the way about Vietnam, a destination like this is going to have huge booms and huge busts along the way.The story on the ground, which of course includes the inflation ...

Here is a nutty thought.Some folks want to impose a windfall profits tax on the oil companies because of how much money they are making. The profits are obscene these people say.I have never heard anyone define obscene but wouldn't obscene have to be indexed to inflation?Some other folks feel that the gub'ment's inflation data is cooked in such a way as to minimize the true rate of inflation because of various COLA requirements for entitlement programs.Wouldn't windfall profits inflation indexing be an incentive for cooking the inflation numbers upward? The COLA indexing an incentive to cook the numbers downward? Which one would win?If more taxes could solve problems, not have unintended consequences and be good economics then people would be all for it but the reality is higher taxes do not solve problems, do have unintended consequences and is ...

My recent post about Plum Creek Timber, client holding, was re-run on Seeking Alpha and a reader left the name of a stock I had never heard of before; Timberwest Forest (TWF-UN.TO in Canada and TWTUF on the pink sheets).Timberwest is one of these Canada listed products that ties in with some sort of resource and pays an enormous dividend, the hydro funds fall into this category.The chart goes back a year and compares Timberwest with Plum Creek Timber and Macquarie Infrastructure (MIC), which is also a client holding. Timberwest and Plum Creek are obviously both timber companies and Timberwest and MIC are both not so simply constructed businesses with high dividend payouts.An investor who bought MIC or Timberwest at the wrong time may not have necessarily known that this sort of stock would ...

A reader asked about what the "little guy" should look for in trying to access foreign bonds.Assuming the question of how is answered with a fund of some sort I would want to see exposure to all sorts of different countries not just very high yielding paper. With a bond fund I would be happy with little to no price appreciation and a fairly steady yield that was at a premium to US treasuries.It seems like the yields in a lot of places are higher than in the US so I would think it would be possible to weave together high yielders and low yielders, deficit versus surplus, importers versus exporters, emerging versus developed and so on to offset, as opposed to hedge, currency movements.Obviously if the dollar continues to be weaker against every currency (longer term trend) then there would be some price ...

Things work a certain way.

This is our eleventh May at our cabin and one thing we can count on every year is that no matter how warm it might get in April it will get very cold and maybe even snow, like it is today (that picture is from this morning), sometime between May 10th and May 15th.

Invariably someone will make a comment in April about it being warm from there on out and it is always wrong. The cyclicality of this is very reliable.

There is an obvious parallel here with the bear phase of a stock market cycle. There are always feel good rallies in a bear that cause people to think it will be a bull from there on out and it is always wrong.

Of course this could be a first or maybe despite it quacking like a bear it is not, but …

Another ETF filing with a hat tip to IndexUniverse. WisdomTree has filed for the Middle East Dividend Fund that will include Bahrain, Dubai, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar and the United Arab Emirates. The prospectus has no info on country weightings (none that I found anyway) but surprisingly 54% of the companies have market caps greater than $2 billion. WisdomTree has an awful lot of very interesting funds on the shelf that I'd love to see list but thus far have not. Some of the filings are so old now that I doubt they will list so we'll see if this middle east fund ever lists or not. One thing seems pretty clear to me, frontier markets will open up to investors one way or another pretty quickly. PowerShares has a frontier fund in the works which takes in a few other countries ...

A reader left a lengthy comment about Modern Portfolio Theory that you can read here. Where better to go to discuss theory than the Delta Tau Chi house at Faber College? Fortunately this post will be short as I am no MPT scholar. First here is the Investopedia quick and dirty on MPT. Basically the reader aspires to be a money manager, spent some time working for someone very big in the industry who succeeded by not using MPT and so the reader seems conflicted by this. Really, I don't think the reader is conflicted, he doesn't believe in it, maybe that will be temporary or maybe not. MPT is a very important building block for professional management of a portfolio. The principles behind it are important and despite the reader's experience and what is contained in this link left by the ...

This rather sparse chart is of the benchmark BET index from Romania. It may not be obvious on first glance but the market is down 34% from its closing high last July 24. Romania is part of the EU but not the EMU. Today their central bank raised rates by 25 beeps, 50 was expected, to 9.75%. Inflation is pretty hot (in the eights), GDP growth is good, estimated in the fives this year but it has been on a down trend for the last couple of years and it is a deficit country. I'm not sure how keen they are about trying to join the EMU but the mix of stats says that is probably a ways off but interestingly the currency, the leu, is up about 4% against the greenback this year but the ride to 4% has been wild. I think ...