Don't worry DEAC, if you are still holding the bag you will probably be smiling soon. I picked up 250 shares this morning @ $33, set a trailing stop that took me out at $34.70. Looking for another entry tomorrow morning. The winds are about to change. If you want to talk about being someones bitch, look no further than mwuay.......currently holding the bag on 950 shares of FAZ with a PPS of $26. SRS has not decayed nearly as much as FAZ, you will get it back, and then some.
http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined
how is that even possible? -50% whether you are bullish or bearing on the financials...
how is that even possible? -50% whether you are bullish or bearing on the financials...
You got it! These are not long term "buy and hold" investment vehicles due to the decay. You can make some money trading these, just make sure that you use tight stops to control the damage. I forgot to do this and got my ass handed to me, and then compounded the damage by chasing it down. It happened, will not happen again. I now use stops on every trade.
As you can see by the chart these things can decay. But I've stayed in FAZ for a couple months between November and January and came out ok. This particular time I'm in deep but this thing can turn around and make the money back, even with chasing it down.
The problem I have with setting stops is that I re-invest after it has gone down further, thinking it will eventually go up. For example, let's say I buy at 40 and set a stop at 30 and it hits so I lose 25%. So I figure I'll buy when it hits 20 and it does only to go down to 15 and I'm out another 25%! These things don't go straight down either.
It's tough to know when a stock will go up or down. FAZ was going up in the mid $30's until Geithner promised to buy out toxic assets. Then the price goes down 4 or 5 dollars over night after the markets have closed. Who knows if it will continue going down when the market opens in the morning?
One big reason I do invest in FAZ is because I believe the sector (Financials) still will get worse. When it continues to get worse FAZ will go up.
QL, I will never forget that Monday when Timmy the butcher had all of us FAZ bagholders in his crosshairs and made that announcement, needed a dustpan to pick my teeth up off the floor. I am with you on the financials though; the only reason I have held is because I am confident that this can and will turn a profit.
