Cramer Wants SEC to Ban SKF

James Cramer, the host of CNBC’s Mad Money and my former boss at TheStreet.com, was ranting and raving about the UltraShort Financials ProShares ETF (SKF). He says it doesn’t work, doesn’t help shareholders and hurts the market as a whole. He says the ETF only helps the brokers and hurts the market.

SKF is a highly risky investment and isn’t a long-term bet. It isn’t necessarily living up to its hype. But what’s wrong with having a product for traders? No one who reads the prospectus see ProShares recommending this for long-term investors.

Cramer hasn’t been doing very well by his viewers over the past year. As the market continued to crash he kept telling people to buy stocks instead of telling people to sell and go to cash or recommending bear funds. He also told people to hold Bear Stearns the week before it went under. He quotes a guy from Goldman who says it sucks. Well, let’s see, maybe that’s because every time people buy SKF it forces shares of Goldman lower.

Cramer says the SEC has to listen to him. You mean like the people who listened to him when he told them to hold Bear Stearns? I’m not putting to much faith into his opinion.

Advertisements

6 responses to “Cramer Wants SEC to Ban SKF

  1. Pingback: Stewart Pummels Cramer and It’s My Fault «

  2. SKF doesn’t “force shares of Goldman lower.” It tracks 2X the daily inverse of a broad range of financial benchmarks i.e. banking, insurance, brokerage. SKF is a reactionary fund. Honestly I don’t think anyone knows how this fund works!?

  3. Then why is SKF declining when the index is declining. Shouldn’t it go up? Its not that simple. Tracking error doesn’t explain it either.

  4. it resets daily like all the leveraged ETFs and volatility causes the deviation in returns

  5. Thanks for one’s marvelous posting! I definitely enjoyed reading it, you may be a great author. I will ensure that I bookmark your blog and definitely will come back later on. I want to encourage you to continue your great posts, have a nice evening!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s