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Strategies & Market Trends : Shorting SPY for fun and profit. -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (49)	11/8/1997 2:44:00 PM
From: Premier	Read Replies (1) \| Respond to of 346

Pancho, First on .18% cost. SPDR(SPY) is 25 year trust and pays quarterly dividends. A new trust is created at moments notice as demand requires. .18% is the annual cost of maintaining the trust. NAV of the trust is somewhere in between the bid and ask spread. Short term trader is not materially affected by .18%. I have successfully used SPY, MDY, WEBS and a mutual fund RYNVX/RYOCX. A variation to active management of indexing could be as follows: When federal model suggests fair value invest in RYNVX. When federal model suggests undervaluation invest in RYNVX on margin, increase margin @10% rate. If S&P is undervalued by 10% use 10% margin, if S&P is undervalued by 20% increase margin to 20%, etc. When federal model suggests 10% overvaluation switch to SPY. As overvaluation increases switch to cash in 1 to 5 ratio. At 30% overvaluation you will be in all cash and short SPY startegy may begin. This is based on belief that DJ will be 30,000 in year 2010 and it will take a zig-zag path to that number. The startegy outlined above will easily beat S&P and is least expensive. Comments welcom. Regards Premier

To: Pancho Villa who wrote (49)	11/8/1997 9:22:00 PM
From: studdog	Read Replies (1) \| Respond to of 346

<< To Esteban and All. My dear friends hope you learn something from my personal experience!>> Pancho, Thanks for the very helpful post. We have come up with similar ideas and reading your thoughts helps me to better understand what the heck I am thinking. Karl