Welcome To Vanguard….Make Sure You Get Out on Time

The world loves themselves their ETF’s. Gold, Brazil $SPY…double leverage this, triple leverage ETF for that…

They love big name Hedge Funds with billions under management…Paulson ring a bell?

I have written about gold a lot on the blog…most of it back in 2006 (you can search the archives) when the Gold run was firmly underway. Last year with the help of The Stocktwits stream and guys like Phil Pearlman and Peter Brandt, I just stopped even mentioning it as the run looked old and tired. I had long sold my last shares and Phil Pearlman mentioned at $1,700 he was done as well.

The biggest of the gold peeps, the master of gold hedge fund bling, is a Canadian firm called Sprott. Sprott has jets. Sprott has billions under management. Sprott is likely a billionaire himself.

Sprott’s shareholders now though are the ones with a problem. Take a look at the returns of Sprott funds this year. Last year or the last 10 years dont matter anymore. The jig is up for Sprott. Nice run pal.

In 2000 we panicked out of stocks and high spreads and were sold diversification and the shizzle of low cost. We have been gorging on ETF’s of all sorts.

When people sell in the era of social leverage, they sell together. They sell the same things too. It is relentless. Fundamentals go out the door and your ETF does the same thing that every other ETF does when the phone rings…they hit buttons.

Vanguard will always win…they sell low cost vanilla. You still need to know how to read markets. Don’t be a lazy sucker. This ETF run has been fantastic, but it is not without some massive flaws.

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