AI
Thursday, February 12, 2015 2:00:30 PM
Thanks for your post, Spanky. I submit that the reason DWTI went up 7-fold (making an evenly distributed investment in both DWTI and UWTI a 100% gainer over the time period) is because there was SO VERY LITTLE VOLATILITY on the very rapid ride down from $105 WTI oil to $44. Had it taken several more months and--most important-- MORE VOLATILE UP/DOWN SWINGS on the overall ride down, DWTI would not have zoomed all the way into $190s in Jan.
So the big hope for those adopting a "buy & hold" strategy with UWTI is that the ride up to $80+/barrel oil is as SMOOTH AS POSSIBLE
--i.e., as little volatility as possible on the upward ascent.
That will allow "compounding gains" to defeat the "decay-over-time" phenomenon.
(NOTE on compounding gains: e.g., if UWTI was at $4.00 and then there were five straight days of 10% gains each day, UWTI would not have gained just 50% but would have moved up to $6.44, a 61% gain.)
So the big hope for those adopting a "buy & hold" strategy with UWTI is that the ride up to $80+/barrel oil is as SMOOTH AS POSSIBLE
--i.e., as little volatility as possible on the upward ascent.
That will allow "compounding gains" to defeat the "decay-over-time" phenomenon.
(NOTE on compounding gains: e.g., if UWTI was at $4.00 and then there were five straight days of 10% gains each day, UWTI would not have gained just 50% but would have moved up to $6.44, a 61% gain.)
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