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The ETF Files: How the U.S. government inadvertently launched a $3T industry

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Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#11

Post by voguchv »

Amorymeltzer wrote: post #3

Caught this story this morning on Bloomberg's Odd Lots podcast[1], it's a great story. The thread that stands out most to me (and to the hosts) is that here's a person who looks at an 840-page government report, reads it in-depth, and creates an industry. That's a feel-good outcome, of hard work others aren't willing to do. In a coincidence, perhaps, Planet Money's latest episode[2] dealt with Warren Buffet's bet on…

What backwards Kafka-esque horror show do you live in to believe a 800+ page government report of red tape and regulations is a feel-good outcome.

Some people really do prefer slavery over liberty.

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#12

Post by Veratyr »

voguchv wrote: post #11
Amorymeltzer wrote: post #3

Caught this story this morning on Bloomberg's Odd Lots podcast[1], it's a great story. The thread that stands out most to me (and to the hosts) is that here's a person who looks at an 840-page government report, reads it in-depth, and creates an industry. That's a feel-good outcome, of hard work others aren't willing to do. In a coincidence, perhaps, Planet Money's latest episode[2] dealt with Warren Buffet's bet on…

What backwards Kafka-esque horror show do you live in to believe a 800+ page government report of red tape and regulations is a feel-good outcome. Some people really do prefer slavery over liberty.

Are you really arguing for deregulation of the financial industry in the name of 'liberty'?

Lack of regulation leads to things like the global financial crisis.

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#13

Post by xyzzy4 »

sparky_z wrote: post #6
Amorymeltzer wrote: post #3

Caught this story this morning on Bloomberg's Odd Lots podcast[1], it's a great story. The thread that stands out most to me (and to the hosts) is that here's a person who looks at an 840-page government report, reads it in-depth, and creates an industry. That's a feel-good outcome, of hard work others aren't willing to do. In a coincidence, perhaps, Planet Money's latest episode[2] dealt with Warren Buffet's bet on…

To be clear, the Warren Buffet bet was about index funds . Not all ETFs track index funds, and even the ones that do aren't necessary. You can just buy into the funds directly.

You can make even more money in the long run if you use leverage to bet on the S&P 500. If you don't believe me, do the math out.

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#14

Post by Amorymeltzer »

voguchv wrote: post #11
Amorymeltzer wrote: post #3

Caught this story this morning on Bloomberg's Odd Lots podcast[1], it's a great story. The thread that stands out most to me (and to the hosts) is that here's a person who looks at an 840-page government report, reads it in-depth, and creates an industry. That's a feel-good outcome, of hard work others aren't willing to do. In a coincidence, perhaps, Planet Money's latest episode[2] dealt with Warren Buffet's bet on…

What backwards Kafka-esque horror show do you live in to believe a 800+ page government report of red tape and regulations is a feel-good outcome. Some people really do prefer slavery over liberty.

Putting aside the flamebait of your comment, you must not have read the story. The government report was following the massive crash in 1988 and was essentially an autopsy of what happened. One little section fantasized that perhaps a basket of funds might have helped avoid the events leading up to the crash. No regulations, no red-tape, just a postmortem accounting of the crash and a possible proscription.

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#15

Post by scottlocklin »

xyzzy4 wrote: post #13
sparky_z wrote: post #6

Earlier quoted context omitted.

To be clear, the Warren Buffet bet was about index funds . Not all ETFs track index funds, and even the ones that do aren't necessary. You can just buy into the funds directly.

You can make even more money in the long run if you use leverage to bet on the S&P 500. If you don't believe me, do the math out.

I guess this is tautologically correct, but if you did a 2x levered punt on SPX in 2007, you'd have gone broke.

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#16

Post by RockyMcNuts »

voguchv wrote: post #11
Amorymeltzer wrote: post #3

Caught this story this morning on Bloomberg's Odd Lots podcast[1], it's a great story. The thread that stands out most to me (and to the hosts) is that here's a person who looks at an 840-page government report, reads it in-depth, and creates an industry. That's a feel-good outcome, of hard work others aren't willing to do. In a coincidence, perhaps, Planet Money's latest episode[2] dealt with Warren Buffet's bet on…

What backwards Kafka-esque horror show do you live in to believe a 800+ page government report of red tape and regulations is a feel-good outcome. Some people really do prefer slavery over liberty.

Did you read TFA? Someone did an in-depth study of a market incident, noted a gap in the market, someone else filled the gap and made a successful product. They both presumably view it as a desirable outcome. Your aversion to it as a (hardly heavy-handed) government intervention is not really their problem.

If the same guy had written a white paper and tweetstorm while employed as a VC or investment banker or economics professor it wouldn't exactly be the difference between liberty and slavery.

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#17

Post by worik »

xyzzy4 wrote: post #13
sparky_z wrote: post #6

Earlier quoted context omitted.

To be clear, the Warren Buffet bet was about index funds . Not all ETFs track index funds, and even the ones that do aren't necessary. You can just buy into the funds directly.

You can make even more money in the long run if you use leverage to bet on the S&P 500. If you don't believe me, do the math out.

Clearly you cannot do math. It all depends on market timing, and if you get that wrong you will go broke as quick as your leverage. If you can get that right, well you would not be posting here, you would own here....

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#18

Post by jegutman »

xyzzy4 wrote: post #13
sparky_z wrote: post #6

Earlier quoted context omitted.

To be clear, the Warren Buffet bet was about index funds . Not all ETFs track index funds, and even the ones that do aren't necessary. You can just buy into the funds directly.

You can make even more money in the long run if you use leverage to bet on the S&P 500. If you don't believe me, do the math out.

There's a funny story I read a while back about this play. If you did this for long enough eventually you'd be the biggest company in the S&P 500 (technically maybe not, but in practice very much so!).

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#19

Post by eru »

Veratyr wrote: post #12
voguchv wrote: post #11

Earlier quoted context omitted.

What backwards Kafka-esque horror show do you live in to believe a 800+ page government report of red tape and regulations is a feel-good outcome. Some people really do prefer slavery over liberty.

Are you really arguing for deregulation of the financial industry in the name of 'liberty'? Lack of regulation leads to things like the global financial crisis.

Read your sibling comments. voguchv is just trolling, and is not even complaining about regulation. He's complaining about a post mortem..

Re: The ETF Files: How the U.S. government inadvertently launched a $3T industry

#20

Post by eru »

emcq wrote: post #10
RandomBK wrote: post #8

Earlier quoted context omitted.

The value of the ETFs closely follow the value of the indices or securities that the fund was designed to track. It is therefore very important for the two securities to be as synchronized as possible, which is where (some forms of) HFT comes in.

Makes sense! You need to minimize tracking error on the underlying basket of assets, and the faster you are the less error you have.

emcq is sort-of right, that for buy-and-hold investors a small tracking error is OK, as long as it does not accumulate over time.

But once you have the nice deposit/receipt system set up to incentivise people to trade the tracking error away with arbitrage, you get a smaller and smaller tracking error for free.

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