The Best Way to Lose Money in Stocks Right Now
Apr 9th, 2008 | By Brian Hunt | Category: Oil Investment & Alternative EnergyAfter a long search yesterday, your editor in chief found the No. 1 way to lose money in stocks right now: betting against oil. The past few years have seen the rise of ETFs that allow speculators to make bets against sectors like energy, technology, and financials.
A recent entry to the game is the UltraShort Oil & Gas ProShares (DUG).
ProShares introduced this “inverse fund” in February 2007. It makes big money when oil stocks fall and loses big money when oil stocks rise. Since inception, this bet against ExxonMobil, Transocean, and Schlumberger has plummeted. The current rally in all things related to has sent the fund to an all-time low.
All assets boom and bust, so we’re sure this fund will be a winner someday. For now though, DUG is getting battered the old fashioned way: going against the trend… in this case, the trend of record cash flows moving toward the companies that dig, drill, refine, and transport fossil fuels. Take that, tree huggers.
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