look at the 3x.. now imagine 100x!!

Kelly Capital is proud to announce on Friday the 13th the world’s first pair of 100x leveraged ETFs: Kelly Daily Nasdaq 100 Bull 100x Shares (SOAR) and Kelly Daily Nasdaq 100 Bear 100x Shares (SINK). The investments seek to replicate, net of expenses, 10,000% of the daily performance of the Nasdaq 100 Index in the case of SOAR, and 10,000% of the inverse daily performance in the case of SINK. The funds will invest at least 80% of assets in securities that comprise the index. They will also utilize financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. The funds are nondiversified.

“These are intended for attentive traders only,” said Kelly Capital Chief Executive Officer Jason Kelly at the press conference following the launch party in New York City. “The extreme leverage employed will cause both funds to go bankrupt within the course of most trading days. However, those paying attention during the day will be able to maneuver in and out of the funds before they crash to zero.”

Kelly Capital will reset and relaunch the funds at the beginning of each trading day. The company is in talks with the Security and Exchange Commission (SEC) about the possibility of relaunching the funds after lunch should they go bust in the morning session, but the SEC is balking. SEC spokesperson Ben Meriwether remarked, “We recognize the right of investors to employ as much leverage needed to find fortune or ruin in a day, we just aren’t sure of the need to extend that right twice per day.”

Kelly thinks the SEC will come around to his firm’s way of thinking on the issue, but is happy for now that investors will have access to the funds at least once per day. “Investors these days aren’t content to wait years for returns on their investment. They want to know the outcome as quickly as possible, and at 100x leverage our products currently offer the fastest investment outcomes.”

Connecticut-based investment research firm Evanescent Lucre monitored a paper trade in SOAR during yesterday’s market. From its report: “On Thursday, November 12, 2009 the Nasdaq 100 Index fell 0.17% in the first 10 minutes, rose 0.62% in the next 20 minutes, fell 0.45% in the next 20 minutes, rose 0.28% in the next 30 minutes, and fell 0.61% in the next 40 minutes. On that same path in the market’s first two hours, SOAR fell 17%, rose 62%, fell 45%, rose 28%, and fell 61%. By 11:30 a.m., a $10,000 investment was worth just $3,692.”

Asked to respond, Kelly reiterated that timing was critical. “Getting out after that first 62% rise was the key, in this example, and people savvy enough to use our products are likely to know that.”

Kelly said in addition to quick results, the new ETFs offer two fringe benefits: a shorter trading day for most who use them because the action will be over before lunch, and excellent tax write-offs at the end of year for those who realize they need them. “We’re focused on families, and shorter trading days gives traders more time to spend with their families. The instant tax write-off feature is very useful in the last trading days of the year when some people realize they need an efficient way to vaporize some of the year’s profits.”

Kelly Capital has filed with the SEC to grow the line of products to cover other indexes and asset classes at 100x leverage. “However,” Kelly noted, “once the leverage gets high enough, you really don’t need a wide range of products because any underlying index will produce the tiny amount of fluctuation needed to move the product price. Traders won’t care whether the slim 1.00% band of possibility they have to work with comes from the Nasdaq 100, the Nikkei 225, or the Dow. It’s all just movement, after all.”

This entire article is false and is intended to be satirical… what’s even more interesting is the post that follows up the preceding one.

Last Friday, I posted a satirical article called First 100x Leveraged ETFs. It made fun of the trend toward higher leverage among ETF products. First we had the doublers (2x), then the triplers (3x), and I projected what would happen if we got up to 100x, which is 10,000% the return of the underlying index. I used the bogus symbols SOAR and SINK for the two fake ETFs mentioned, the former following the index at 100x and the latter following the inverse of the index at 100x.

The article was clearly sarcastic, written in the style of The Onion, as the following excerpt shows:

“These are intended for attentive traders only,” said Kelly Capital Chief Executive Officer Jason Kelly at the press conference following the launch party in New York City. “The extreme leverage employed will cause both funds to go bankrupt within the course of most trading days. However, those paying attention during the day will be able to maneuver in and out of the funds before they crash to zero.”

Kelly Capital will reset and relaunch the funds at the beginning of each trading day. The company is in talks with the Security and Exchange Commission (SEC) about the possibility of relaunching the funds after lunch should they go bust in the morning session, but the SEC is balking. SEC spokesperson Ben Meriwether remarked, “We recognize the right of investors to employ as much leverage needed to find fortune or ruin in a day, we just aren’t sure of the need to extend that right twice per day.”

Kelly thinks the SEC will come around to his firm’s way of thinking on the issue, but is happy for now that investors will have access to the funds at least once per day. “Investors these days aren’t content to wait years for returns on their investment. They want to know the outcome as quickly as possible, and at 100x leverage our productscurrently offer the fastest investment outcomes.”

To my dismay, a deluge of email poured in from investors, many of whom wanted to buy either SOAR or SINK. I categorized the responses by type, and came up with these rounded results:

• 10% Thought I should stop joking around and get back to work
• 20% Loved the humor and wished for more
• 15% Wondered which I thought better, SOAR or SINK
• 20% Complained that their broker didn’t offer either
• 30% Wanted me to let them know when the ETFs were available
• 5% Were pretty sure they already owned the ETFs…somewhere

A full 65% of people expressed an interest in owning products that would “go bankrupt within the course of most trading days.” A stunning 5% thought they already owned them. Only 30% of respondents got the humor.

With results like these, no wonder investment companies can foist off just about anything on investors.

While I know there are a lot of you out there that don’t know what a leveraged ETF is.. for those who do.. this is really quite unbelievable.

Firstly, I must say that this post is dedicated to my Nan, as it is her recipe and one of my favorite foods of all time. The fact that I can create it pretty close to how she made it.. well, I’m pretty darn happy about that.

I said in the title that it’s a little more then $10… and in truth, it really is.. but depending on how much you pay for carrots, turnip, onions, etc.. the price could go up.

The first item to eat is actually your first meal! Purchase one of those Rotisserie Chickens from Sobeys or Superstore, and chow down! They are usually less then $10 to buy and cook some potatoes and some veggies and you’ve got a great meal one! I can’t get over how good their chicken is, and for $10.. I think it’s a price you can’t beat. Keep the bones and leftover chicken that’s there as well.

Now this is where you get down to business.. time to make SOUP! But not just any soup.. we’re talking supremo delicious soup.. I call it “Nannys Soup” (patent pending).

Nanny’s Soup

I’m not going to just jot down the recipe.. I’m going to show you.. step by step.. how to make it The best part about this soup is that it’s really low in fat and calories as you’ll see, no more diet pills for you!

You’re going to need carrots, turnip, onion, lipton soup mix (dry mix), your already eaten chicken (bones).

1. Pick off the remaining chicken by hand (gross job, but easy with the “fall off the bone” rotisserie chickens, put the bones in the pot and the leftover meat on a plate and refrigerate.. we’ll need that later.

Leftover Chicken And The Bones In The Pot

2. Add additional ingredients shown here, I had some broccoli stalks which I used as well.. it’s all about additional flavor.

Additions to my Chicken Stock

3. I just cut up the onions (didn’t even peel them), and put everything in the pot and added as much water as wouldn’t boil over.. I also added a few bay leaves as you can see in this picture.

My Chicken Stock Ingredients

4. What you want to do is bring it up to a boil (high heat), then reduce to a low simmer. Since I didn’t know what this really meant.. it was around 3 out of 10 on my stove dial.

Boiling Away.. Time To Reduce To A Simmer For A Bit

5. Leave it simmer for a few hours.. the longer the better.. but I simply left mine on for 2 hours.

After 2 Hours Of Simmering

6. Ok.. it doesn’t look pretty.. BUT it smells unreal! So after two hours, I simply put a strainer or colander in another big pot and strained out the water (chicken stock) to seperate the liquid from the chicken bones and veggies.. sorry I don’t have a picture of this step. Next was just a matter of adding all the ingredients to the chicken stock! The picture below shows everything

This Is All I Used To Make The Soup

7. These previous picture shows everything I put in to my soup with exception of the lipton soup mix which gets added last. The drink container holds the chicken stock we just made, and I actually only used about 3/4 of the turnip shown. I did cut up everything else though and add it into the soup (didn’t add chicken until later as it’s already cooked).

Carrots All Cut Up And Ready For Some Hardcore Boiling Action

8. So we’re almost there.. By the way, I’ve never made soup from scratch before, and certainly not chicken stock.. so this was a first for me.. needless to say I’m really excited with how it turned out. So we’ve got all the carrots, onions, turnip and chicken stock boiling in a pot.. we leave that for about 10 minutes to cook the veggies.

Veggies Boiling, Just One Last Step

9. Finally, we add the Lipton Soup Mix, and the chopped up leftover chicken.

Secret Ingredient Adds The Noodles And More Flavor

10. So yeah, that’s it.. we add the soup mix.. and the chicken.. cook for another 10 minutes or so.. and we’re good to go!

This Soup Is Awesome... Trust Me.

Picture above is the final result.

I should mention that I actually had enough to freeze a few bags of soup as well (in solid freezer bags.. not sandwich bags.. messy!). I can honestly say that it was more then 12 lunches that I was able to get out of this recipe, and unless I’m missing something.. it was pretty damn cheap to make.. water, some veggies, lipton soup mix, and a chicken!

Hope you like it if you try it. I always appreciate feedback in the comments section

Here’s the latest chart chart from yesterday I have with the latest price and you can see that 1 Canadian Dollar will buy you 0.946 of a USD right now. That’s pretty good.. but I think it’s only starting.. (As of this morning October 9th.. it’s at $0.955)

One of my favorite bloggers Tim Knight at www.slopeofhope.com also thinks that we are in for one good push up, then the equities are going to reverse quite hard (stocks/funds, etc). You can see where he’s calling for this type of movement here and here.

I’m with him.. very cautiously waiting.. I’ve been playing oil like a madman lately.. and I’m thinking it’s due for a reversal back to the 50′s level again.. we’ll see what happens. *Update - I wrote this blog article 2 days ago.. and yesterday was a pretty big push upwards again.. one has to wonder when it’s going to correct a bit.. everyone is calling for it.. perhaps that means is may not happen? Yeah, I don’t think so either.

It makes sense really.. assets make you money, where liabilities make you spend your money.. and usually that money is after-tax money. Things like income real-estate, stocks, certificates, etc. are what he promotes people to buy, and to not be sucked into the money trap or ‘rat race’ which most people get into. You know what I’m talking about, get a paycheck… pay your bills.. try to put away some money after everything is paid… I’m doing this now (sort of) and it sucks.

What he suggests, as do most of the financial books I’ve read, is to pay yourself first. But I found one idea which I thought was BRILLIANT to teach kids on the importance of saving, and investing wisely.

I loved the example given in the book. Basically there was a teenager whom wanted a car. Instead of just giving the child the money (in this case $3000), the father decided to ask the author for advise. After speaking with Robert, the father had a great idea. He went and purchased a subscription to the Wall Street Journal, and gave his son all of his financial books to read, and access to a stock broker, etc. He gave his son $3000, however told him that he could not use the original $3000 to buy the car, he would have to make the $3000 from the original money he gave him.

A lot of people think this is just crazy.. however I totally disagree, can you imagine how much the kid learned?

What ended up happening, is that the kid researched and at first was up money (for our example let’s say he made it to $4000), but then the market turned against him and he was down to $1000. This however, didn’t deter the kid, and although it doesn’t end up saying what ended up happening.. it was at this point that the father thanked the author as the kid now had a HUGE interest in making money instead of just uselessly spending. The teen was more interested in how to earn more money from his $1000 investing than he had interest in getting a new car and tricking it out with new chrome rims and car grilles! The author did ask the Dad if he was worried about the original $3000 that he gave his son, however the Dad simply said.. “better lose it now and learn the lesson then when he’s older”. Very true.

Anyhow after I read this I knew right away that I was going to write about it, it’s ideas such as these that give kids and younger people a different approach to making money. I would certainly recommend reading Rich Dad, Poor Dad if you have the time. I enjoyed it a lot, and am going to read Kiyosaki’s other book as well next.. it’s called The CASHFLOW quadrant : rich dad’s guide to financial freedom.