Something I meant to post over a year ago. Not so much a tech issue but a complexity issue. I don’t understand ETFs. I make complicated data constructs all day so it is odd that I don’t understand at least the basics of the inner workings of ETFs. Then a year ago I saw an ETF guy he seemed some kind of bigwig in the ETF world. I don’t really have a good vocabulary to describe this guy. He was over groomed. Perfect suit, perfect face, perfect hair, perfect lines, just perfect. What a douche. This guy was exactly the sort that central casting would use as the coke snorting MBA douche bag where the audience claps when Schwarzenegger stuffs a grenade in his mouth and shoves him down an elevator shaft.
This guy gave me the same vibe as used car salesmen, real-estate salesmen, and psychopaths in general. That wonderful smile that is directed like a spotlight on people they can use. But passes over others of no worth leaving them shamed in their worthlessness yet unaware how lucky they were not to be sucked into a husk by the vampire who’s shadow they just passed under.
And that is me holding back.
Do I need to explain what I think of the ETFs people like this are assembling and selling. At least a used car is worth the scrap value and an overpriced house will keep some rain out.
Keeping in mind that I do not understand ETFs and have not personally met the people involved I am going to go way out on a limb and say that they are going to go down in history as one of the worst investment vehicles in history. Literally worth less than the tulip bulbs that they will push from number one.
Now it looks like some boring ETFs are actually based upon real assets but that others are ‘exotic’. Seeing that it would be easier and faster to assemble ‘exotic’ ones than real ones I suspect that the ‘exotic’ ones outnumber the real ones by a huge ratio.
My only question is: what will trigger the emperor has no clothes moment? This would depend the assumption that something is being over leveraged and then using this assumption the trigger would be that something dropping in value. Seeing that most everything has been dropping of late almost everywhere in the world this trigger might be happening right now. Should be interesting.