The last commodity ETF I'll ever buy

[underemployedactor]

Well, it was a good trade and did work out well for a while and despite andrewf's condescending remarks was not a particularly undeducated or ill advised play. I would have wound up the position soon anyway. My point wasn't to discuss the relative merits of the strategy, so much as to complain about the nature of etfs, such that one investment can be transfered into another one that isn't the same thing at all, and that the etf middlemen, like Cat on a hot tin roof's Big Daddy, "have a lotta experience with mendacity".

[andrewf]

The price of gas has risen over the past few months.

The trade could have moved in your favour and still have been a bad trade, from an initial risk/reward perspective.

As far as the ETF provider closing the fund: it's a reality. They're running a business. They can choose to stop running a business when it no longer makes sense. They gave you warning that they were going to make those changes, and you were free to move to a different fund. I don't understand why you would complain about this. It's like complaining that McDonald's stopped selling the McRib.

[Belguy]

Really? Then we should be mad at both iShares AND McDonald's as well as any other company who decides to discontinue a product. The same goes for any mutual fund company that changes the manager of a fund for whatever reason even if that manager quits and moves to another mutual fund company as I have experienced on occasion in the past.

Why can't everything just stay the same????

[underemployedactor]

To extend the not particularly apt metaphor, it's more like ordering a McChicken and being handed a Big Mac. But I suppose in andrewf's parlance they would be "doing me a favour". Anyway, I find I don't like or trust the ETF model and will seek more direct participation wherever possible.
Belguy, I noticed you had to edit your post already. Nothing like irony served with a sledgehammer.

[Belguy]

I still feel that one of the best approaches is the so-called 'Core and Explore' approach whereby you employ the lowest-priced, broadest-based ETF's for your core holdings and individual stocks for the explore portion.

I don't like all of these new fringe ETF offerings that the ever-creative financial services industry have come out with of late. Many of them will not be around for the long term.

But, heh, you pays your money and you takes your chances.

[andrewf]

Hey, these funds are second only to long VIX funds in destroying retail investors' money. I stand by the 'doing investors a favour' comment.

By all means, go buy futures contracts. I don't think your criticism is reasonable. I suppose iShares could have just wound up the fund an returned the NAV to unitholders in cash.

Unitholders voted in favour of the change. Be angry at the other unitholders.

[Snuff_the_Rooster]

Hey, these funds are second only to long VIX funds in destroying retail investors' money. I stand by the 'doing investors a favour' comment.

By all means, go buy futures contracts.

When first reading this topic I knew it was about Nat Gas Contango but my thoughts instantly went to the various VIX ETN's out there. The reason is as you've said there's been no worse (or better?) contango money-killer products out there like these VIX etn's.

I laugh and cry at the same time when I read various threads across the web about these products. So much effort, silliness and money has been wasted on them. It really shows just how completely uniformed a vast majority of retail traders are. I cry because it doesn't have to be this way. I get frustrated at the same time because of the continued wasted and pointless effort that these same traders expend, justifying poor decision making.

All I can say is, I'm glad its not our money.

I stop short of recommending that people go out and start trading futures contracts for no other reason than the real problem in most cases is the investor-trader, not the vehicle.

I'm not giving advice here, but with respect to the VIX etn's I know i have been guilty of offhandedly telling stock/etf/etn traders to basically just be short all that stuff whenever they pop and don't get too big too soon.

It's a lot like placing a finishing nail with a sledge-hammer and it is a horribly in-efficient and capital intensive way of playing it, but the odds a very much in your favour.

The only way we will trade VIX is with futures. I don't suggest this simply because played poorly they can be a serious widow-maker. You just can't have too many episodes of poor decision making before they ring your bell, not to mention that you need a fair chunk of money to play even he smallest of spreads. I simply won't play them for most accounts.

The trade could have moved in your favour and still have been a bad trade, from an initial risk/reward perspective.

That's very true, Andrewf. The sad thing is most will not see it that way. Just my opinion, but when you've come to the point where you can judge your decisions not based on outcome, but on merits, you've arrived.

[underemployedactor]

Love it when this kind of sanctimonious pontificating masquerades as educating the poor simple ill informed retail simpleton.
In your rush to trumpet this garbled gospel or whatever it is you fail to see that this thread was not about Natural gas contango, but about the fairness or otherwise of an ETF swapping out one investment for another. But why let that get in the way of a pointless sermon.

[Snuff_the_Rooster]

If you take nothing else away from this I hope it's that you see why these vehicle shouldn't really be entered in the first place - leaving everything else that happens after the fact, a moot point.

I'm pretty sure everyone here understands your beef with the decision being made, but what would you have anyone do? Help you beat your head against the wall in hopes to get the verdict reversed? Or was this more of a "do not respond" sound-off on your part?

In that case had you said that you were just letting off steam I can speak for myself in saying that I likely would not have responded.

How I looked at it was as I had stated. This stuff doesn't get on my radar for the reasons stated. Oddly enough I posted this too..

So much effort, silliness and money has been wasted on them. It really shows just how completely uniformed a vast majority of retail traders are. I cry because it doesn't have to be this way. I get frustrated at the same time because of the continued wasted and pointless effort that these same traders expend, justifying poor decision making.

As this is how I see most of these things pan out.

If I were you I'd take my second place prize of a gain in very tough odds and walk away happy - as long I knew my err in entering in the first place, I would be all smiles.


As to fairness of things in life,... well I'm not going to be the one to break it to you. It may seem funny to you but I walk into a trade wondering how I'm going to get screwed and who is going to do it. The idea that I am going to get a fair shake really never enters my mind. I guess it's to many years at the helm. You get used to -what is- and carry on.

That calls for my very first smiley face insert

[andrewf]

^To echo the above. If all you wanted to do is gripe and you were not looking for comment, you could have been clearer up front. Creating a thread on a comment board is an invitation for comment. Perhaps you should have sent your complaint directly to iShares.