A friend recently wrote me about a strategy he heard for exploiting market volatility. I get these questions sometimes because I’m in finance, and because I’m in finance let me be up front. I’m not giving you financial advice here. I’m not an advisor, I’m not competent, you should probably close this page now and burn your computer. Past performance has no correllation with future performance, as everyone should have learned in, oh, 2008.
That said, let’s have a little fun with these ideas. To paraphrase my pal’s email:
Apologies in advance for what I hope is a not-too-complicated financial question. So you ever heard of something called volatility drag? Something to do with how over time double- and triple-leveraged ETFs always lose money. I found an investment opportunity that uses this principle to make money. The pitch I heard says that the strategy is sound and has data to back it up since the 90s. I find it hard to believe that something that automatically mints you money (admittedly at a “watching paint dry” pace) exists, yet it seems so from what I can tell…
I hadn’t heard of volatility drag before but it was fun to learn about. Under the fold: Charts! Definitions! Sage Advice! Links to books!
I suggested to Sam that she tell the Dead Programmer about the signing and he’s coming! I’m excited – Michael’s writing is some of my favorite – it’s always a pleasure when he updates and I see something new in my feed reader.
GWEI – Google Will Eat Itself
They subscribe to Google’s AdSense program and serve ads.
As the ads earn money, the money is automatically used to buy shares of stock in Google (GOOG).
Anyone who visits the site can become a shareholder in their corporation (GTTP Ltd – Google To The People Company). Therefore we all become shareholders, in effect, of Google.
They calculate that they we will fully own Google in 202 years.
Prosper has revealed their lending API/Tools section . Right now it is just a dump of data from their db, but the api section promises webservices coming soon.
What’s cool about this? Now you should see smart folks like me building tools to analyze and pick through prosper loans, flagging good stuff and dissing bad loans. By opening up the data like this, prosper is letting interested people create tools for themselves and others to get better results for their systems.
This kind of openness will be good for their business as reliability goes up and people can make better informed decisions.