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Wednesday, March 28, 2012

And speaking of ETF's and ETN's, what's the latest from ETF Deathwatch ?

First, the skinny...
"Most of the 291 products on Deathwatch face a real possibility of closure.  The largest risk is not, however, that they may close in the future.  No, the more notable risk is that they suffer from extremely poor liquidity today.  Wide bid/ask spreads, little to no volume behind the quotes, and sleeping market makers can potentially inflict much more damage on unknowing investors than a fund closure.

"Still don’t think illiquidity is a problem?  Here’s a fact to consider: On the last day of February, a total of 152 ETFs and ETNs had no trades for the day.  Their volume was zero.  Seven went the entire month with no volume.  One product, iPath Long Extended 3x Russell 1000 TR ETN (ROLA), has yet to post its first trade of 2012.

"What makes ETFs unique and limits discounts and premiums is their ability to create and redeem shares through in-kind exchange.  However, this process requires trading activity.  The creation/redemption process typically involves 50,000 shares of the ETF.  The ETFs on Deathwatch routinely take weeks or months to generate that much volume.  For them, the creation/redemption process is virtually non-existent.  There is no ability to arbitrage the price to the net asset value."

For a detailed listing of endangered funds, click here.

Looking for Commission-free ETF/ETN Trading ?

Check this nifty utility on the ETF Database, which allows you to find a commission-fee trading platform by ETF/ETN offering, or to explore commission-free offerings by provider/platform.

Wednesday, March 14, 2012

Five Leadership Lessons from James T. Kirk...

...compiled by Alex Knapp of FORBES, are as follows :

1. Never Stop Learning
2. Have Advisors With Different Worldviews
3. Be Part Of The Away Team
4. Play Poker, Not Chess
5. Blow up the Enterprise

Knapp summarizes...
In his many years of service to the Federation, James Kirk embodied several leadership lessons that we can use in our own lives. We need to keep exploring and learning. We need to ensure that we encourage creativity and innovation by listening to the advice of people with vastly different opinions. We need to occasionally get down in the trenches with the members of our teams so we understand their needs and earn their trust and loyalty. We need to understand the psychology of our competitors and also learn to radically change course when circumstances dictate. By following these lessons, we can lead our organizations into places where none have gone before.
For the details of Knapp's analysis, click here.