Keep An Eye On The Financial Sector

Over the weekend, I added ProShares Ultra Financials (UYG) to The Kelly Letter’s list of what I’d like to own. UYG is an exchange-traded fund that returns 200% of the performance of the Dow Jones U.S. Financials Index, which owns the likes of Citigroup, Bank of America, JPMorgan Chase, AIG, Wells Fargo, Wachovia, Goldman Sachs, and so on.

These are the stocks that have suffered the most in the sub-prime unwinding of late. UYG is down 39% since the end of February, and 28% just since Oct. 9.

There is little doubt that these high-powered names will weather the current storm individually, but when grouped together in an index there no question. Doubling the return of the rebound could be very profitable, to the tune of 100%.

I will keep an eye on it a little longer to be sure we’ve reached a good bottom, then put some money to work on the end of the sub-prime worries.

This entry was posted in Uncategorized and tagged . Bookmark the permalink. Both comments and trackbacks are currently closed.
  • The Kelly Letter
    A Complete Investment Management System
    The Kelly Letter  every Sunday morning by email.
    Like no other. Many subscribers say this is the best read of their week, astonishing in its ability to distill seven days of noise into one succinct overview of the very few items that might matter. Start your Sundays right!
    A one-page Quick Start Guide
    with page number references to full information in The 3% Signal. You'll receive access to this right away so you can begin transforming your portfolio into a performance machine immediately.
    The 3Sig Calculator.
    A thing of beauty! You'll use it to generate your own personal signals every quarter including exact share amounts to buy and sell based on your account balances. It emails you the results to make later quarters easy by keeping last quarter's numbers at your fingertips. Some subscribers say this tool alone justifies their subscription price.
    The subscriber-only section of this website
    where likeminded investors are commenting on notes and discussing in forums. Jason joins these interactions every day. They're a treasure trove of investing tips and wisdom.
    The archive of Kelly Letter notes.
    It’s a research center, searchable and smartly tagged to make gathering time-stamped material on covered subjects easy.
    The subscriber podcast.
    Jason reads every letter word-for-word. This feature was requested by subscribers who prefer audio learning. They listen on their Monday morning commute, during a workout, or while reading along at their computer.

    Save 17%

    Pay as you go
    Or sign up to receive free email and learn more about the system.
Bestselling Financial Author