Can haz job? Mebbe?

I am now sort of employed again. The contract still hasn't been signed, but, I do not have to burn vacation days. They are letting me charge to overhead while I wait for the new contract. I will be going into my company's main office on Monday so I have something to do. At least this ensures that I will still be getting paid through all of this.

Last night I attended an informational seminar on the different graduate programs for the George Mason School of Management. It was informative, but, I am still up in the air on what I want to do. Both their EMBA and MSTM programs are very interesting.

The EMBA is more expensive, takes longer and has a staggered schedule, but, it has some very interesting qualities. One of those is the fact that it has 3 residencies; one in Asia, one in London and one in New York City. I think all of those would be very educational and informative. The NYC residency would be fascinating in that you would get some exposure to the workings of the (still) financial capitol of the world.

The Masters in Technology Management would still give me exposure to economics, finance and accounting, while costing much less and taking less time to get. It also has the bonus of being only on Saturdays. So, it would work with about any job I would have in the future. Its drawbacks are that it would not get as deep into the business topics as an EMBA. It also has only one residency. Although this year it was in Dubai! That would make up for the lack of the other 2 residencies.

Tomorrow, I am attending an informational session specifically for the MSTM degree. It will be on campus at GMU and will have current students in attendance. So, this will be a good chance to drill down into that program deeper. I am also setting up a visit to the EMBA program. I am going to sit in on a class and then go out to lunch with the group at the end. Hopefully, these two events will help me push forward to making a decision.

One thing I think I have decided on is, unless I blew the cover off the GMAT (770+) I think I will be going to GMU. I would still love to go to Wharton, Kellogg or Booth, but, I am sure it would be a long shot to even imagine getting to go to one of those institutions. But, I can still dream... and besides, it gives me some motivation to study for the GMAT.

Oh, and on an unrealted note... I just have to say. Dropping down from 300 pounds to 230 pounds has made clothes shopping alot more enjoyable. Except when you just happen to walk into Brooks Brothers and try on a Sport Coat that makes even ME look good. Then it is just painful. $585 *sigh*

And the drama continues

I am (once again) in a pickle at work. My contract that I am currently working on ended yesterday. The contract is up for extension and just needs a couple signatures to be extended. But, it is the government, so it is taking forever to complete. This means that I have no project to charge my hours to, so I essentially have no job. I am still being paid by my contracting employer, but, I cannot go into work. It is like a mini-vacation without a clear prospect of whether I will have a job starting next week. This makes it a little harder to enjoy it as a mini-vacation.

My way of handling it right now is I am going to the joint graduate information reception for GMU at the Tower Club tonight in Tyson's Corner. I am also going to work on lining up some temporary work back in the oil industry in case I need something to keep me busy for a short term till I can go back to work. I also think I will go for a hike tomorrow to relax.

This also gives me a chance to take a little time to work on my investment positions. I got a nice bounce off the China news yesterday because I had increased my positions in the energy and materials trade the day before yesterday. It is nice to sometimes get it right occasionally.

Speaking of making money... I won my weight loss contest at work and I picked up $320 for the efforts. I think I will end up just putting the money in my savings account. But, it would be fun to spend it. I had aspirations to go to NYC over my spring break, but, the wife is showing resistance to the idea. So, I think it will just end up in the savings account. I guess it isn't the worst place for it to go.

Well, even though I am unemployed, I have a busy day ahead of me. I just have some extra time to get everything done today. :)

Bleh

I feel pretty blah today. I think it is a combo of eating stuff I shouldn't have yesterday, a market that won't stop going down (depressing even with SDS doing well), the continuing cold of winter and just general thinking about becoming 40 soon. It all combines to a good case of the blahs.

I think the main root of it has been me thinking too much about all of the cool things I have missed out on in life because I talk myself out of them. The main issue is my lack of desire to travel. (especially air travel) I don't understand it. I used to have no problem flying anywhere, then I couldn't do it at all for a while, then I got better and now I am back to just not wanting to do it again. I am really going to focus on taking one overseas trip in the next 6 months. If I am going to do 95% of the things I want to do I need to get this whole issue out of the way.

I think losing weight and getting my stomach in better shape would go a long way, so I am really focusing on that part now. I am down from ~300lbs to ~235lbs so I have to imagine that would help. I also am working with my doctor to get the stomach issues under control. I guess the next step is to pull the trigger and hop on a commercial flight to somewhere.

Ugh. It just sucks.

The problem with dating strippers

Today I am pondering exactly how some of these handy little ETFs I like to trade actually work. For those of you not exactly in the finance game, an ETF is an Exchange Traded Fund. You can get a good primer on it in wikipedia: http://en.wikipedia.org/wiki/Exchange-traded_fund

My investigation has actually left me a little skeptical and nervous. I find them to be good trading vehicles to take advantage of market movements where I would never have the ability to trade nor the tolerance for risk to directly invest in. But, I do not think most of them are a good long term investment strategy.

The best way for me to hash this out is to make a pro and con list. First I will start with the positives:
+ A much safer way to short an index or just about anything. Compared to actually shorting an equity where you could end up owing mountains of money, the worst that can happen owning a ETF is it goes to zero.
+ Allows you to get a broader exposure to markets with a smaller investment.
+ Can be bought and sold in 15 second increments. Much better than a mutual fund. Mutual Funds only trade at the end of the day.
+ Their operating expenses are lower than most mutual funds and are alot cheaper than trying to buy and sell all 500 stocks in the S&P by yourself.
+ You can utilize leverage against just the movement of an index.
Now the negatives (these answers will be longer because this is what I am trying to figure out):

- Arbitrage is risky. Especially when it is done on large scales. Just think of the crash in 1998 and what happened to Long Term Capital Management(LTCM). In September 1998 they lost $4.6 Billion in arbitrage gone horribly wrong. I know that arbitrage is one of the great ways that ETFs stay in check and return to fair prices, but, with so many ETFs out there, this has to expose risk to other arbitrageurs going after the same piece of the action. This would mean that the faster computers are going to win each time. Thus, if you get on an ETF that doesn't have the edge, you could potentially get hosed on one of those transactions.
- ETFs are exempted from the Investment Company Act of 1940. This makes them very similar to a hedge fund in that they can use derivatives. That is a short path till you get into Credit Default Swaps and Credit Default Options which we have heard enough horror stories over the last few months to see how risky these can become. AIG needing $85Billion to just not go under, $7.2Billion at SocGen for futures mis-use... the list goes on and on...
- Volatility can be a real bitch on the long term performance of an ETF. If volatility of the market is high (think the VIX) then the deviation of the performance of the ETF from the index it is tracking will be greater.
- The whole bubble aspect. Whenever this much money moves into one place, eventually something will cause the bubble to pop. It can't go up forever. By the middle of 2008 there were 680 ETFs in the US with $610Billion in assets. Something will eventually have to give.
- And then the last one which is the foundation of why I think ETFs are good short term trades but leveraged ETFs, in particular, are terrible long term investments is because: These leveraged funds are designed to give a positive or negative multiple of an index on a daily basis and NOT for greater periods of time. Thus, the fund will not return a simple multiple of an index's return for much longer than periods of one day. This is the reason why so many of the short oil ETFs did not track along with the plunge in crude last year.

So, as much as I love my SDS (ProShares Ultra Short S&P 500)... I doubt I could ever bring myself to hold on to it for more than a few days at a time. No matter how bad the market looks for the next month, quarter, year, decade.

I will end with the great observation from Fast Money trader Jeff Macke: They’re not for buy and hold. ETFs such as the SDS are like dating a stripper, he says. “It’s fun but it’s not going to end well.”
I think that pretty much sums it up.