Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (88891)	7/17/2009 11:36:22 AM
From: silvertoad	1 Recommendation Read Replies (1) \| Respond to of 94695

gregor - do you think the 12-Month Oil Fund (USL) and the upcoming 12-Month Nat Gas Fund deal with the problem sufficiently to be longterm investment vehicles? thx. tinyurl.com unitedstatescommodityfunds.com

To: gregor_us who wrote (88891)	7/17/2009 11:36:36 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

With precious metals you can just buy the bullion from bullion dealers, although you'll pay the larger spread, which is what I've been doing. Unfortunately, with other commodities you can't do that. So, the ETFs, no matter how flawed they are, offer investors tracking of the commodity price. USO tracked WTIC very well this Spring, but not so well when it crashed - perhaps, due to large contango that developed. The only other way is to buy futures yourself. I agree, these funds offer some real money pile to the Market Makers, who front run the contract rollover, which is probably why they started them to begin with. It's the money pile lost by the fund. Perhaps, the managers, who are obviously not interested in paying the dues to the Market Makers, can somehow optimize the rollover process. Note that last year was very, very unusual. Perhaps, during more normal times these funds should track things better.