One of the problems with retail investors (otherwise known as schlubs, marks, shoeclerks, bleacher bums) is that they think they can compete in the markets and beat the Wall Street Sharpies.
Wall Street is set up to extract money from the stupid and transfer it to the smart. Case in point the Crude Oil ETF (USO).
In this excellent podcast Erik Townsend and Jim Bianco discuss how the ETF is structured and why it is not the best way to play a rebound in oil prices. This is a great education in how Wall Street structures products and that the goal is to get fees not to help make you money.
https://www.macrovoices.com/podcasts-collection/macrovoices-hot-topic-podcasts/836-hot-topic-14-crude-oil-black-swan-alert-with-jim-bianco
- Why USO’s 1:8 reverse split is a setup for massive retail inflows to Crude Oil ETPs this week
- Why oil producers will be taking the other side of futures bought by USO and other ETPs
- The perfect storm: What happens when a historically unprecedented % of shorts stand for physical delivery
- There simply is no good solution: Even with a financial bailout, the logistic nightmare could cripple the industry
Included in the podcast is an excellent slide deck which can be viewed here:
https://www.macrovoices.com/guest-content/list-guest-publications/3640-bianco-research-presentation-04-27-2020/file