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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (91252)	12/6/2008 3:25:53 PM
From: Webster Groves	1 Recommendation Read Replies (6) \| Respond to of 116555

I am seeking some help from knowledgeable posters regarding the performance of SKF, which is supposed to be a 2X Ultrasort of the Dow Jones Financial Index. Over the past 12 months, the DJ Financial index has dropped about 50%, but SKF has only increased roughly 25 %. How can this be ? I understand that the inverse 2X performance is quoted only "on a daily basis", and over time may not exactly be -2X: proshares.com But something else must be going on. How about the components of the Index ? When BS or MER drop out, how are they replaced ? Are the 'zeros" included in NAV, or are they dispensed with ? Even here, it's the Index that would be arbitrary by component exchange, and the -2X ETF (SKF) should still bear some relationship to the Index. Confused in Pawnee Flats, wg