That’s a reasonable question. The prudent answer for a newbie, as you describe yourself, is NO — don’t use inverse funds, unless you are certain of the direction of the market and are able to to withstand the volatility.

Holding cash keeps account values stable, because you are not in the action. Holding long or short funds puts you in the action. Both long and short funds are directional bets.

Over the past month or two, the strong daily fluctuations up and down have made directional investments difficult.

A violent 5% up day is as harmful to a short fund as a violent 5% down day is to a long fund.

The market in these immediate days doesn’t know where it’s going. Unless you know where it’s going, best to stand aside and watch until the things clarify.

http://www.trinexcapital.com

Our article had an unstated, but implied, agreement with Y.L.’s point, in that we did not view Russia, which is among the most energy inefficient countries, as negatively as we viewed China (relative to India), because China and India are both significant net importers, while Russia is not.

We look forward to additional reader comments on this question.

Japan, for example, is among the more efficient, but they are highly energy import dependent. And because they are so efficient, they may have fewer immediate conservation options to offset rising energy costs.

In any event, how energy cost play through the international investment process with differential impact on countries is an important question that deserves more attention.

Your argument of (http://www.qvmgroup.com/invest/archives/578) “India would be somewhat less sensitive to spiraling energy costs than China, because India is less manufacturing intensive in its export business than China.” is interesting.

It ignores one fact, however: China depends less on foreign oil than India does - China imports around 50% of its oil consumption while India imports around 70%.

If you also take account of the fact that China has more foreign currency reserves than India does, you will find China may be less vulnerable to high oil prices than India.

I said so not because I am a native Chinese. Look at what we have seen so far: China’s inlation is kind of controlled - at ca. 8%, while India’s inflation goes above 10%.

Therefore, there are reasons for some countries to be more oil-intensive or energy-intensive than other countries (as measured by oil consumption per unit of GDP) - some countries produces more oil or energy energy products than others. So, the countries at the bottom of your table , say Saudi & UAE, are not necessarily losers in this oil super spike.

In general, I think your suggestion of shorting inefficient energy/oil users is a good idea, but that should be further examined with more insights on their foreign energy/oil dependence. Maybe you can consider short heavy energy/oil importers.

That’s a good question.

Personally, I like to see a rapidly moving tape for investments I make for myself or others.

For this screen I was more forgiving. I used the 1-minute charts and wanted to see all or most minutes with trading activity. I did it visually without a bright line test.

There are many newer ETFs with interesting objectives, but with so little trading that you may wait too long for a limit buy to execute and maybe longer for your limit sell to execute.

I don’t like being trapped in a position, even for long term investments. Eventually, exiting will be the, goal and then the time horizon will be short to immediate.

The best situations would allow you to exit whenever you please.

Market orders on thinly traded ETFs are not a good idea.

You might find unattractive Bid-Ask spreads in cases where trading is sporadic or limited.

Reasonable size is also determined by the investor’s bite size.

Someone who wants to put $10,000 into a position has different criteria than someone who wants to put $100,000 or $500,000 into a position.

I certainly would not be willing to be more than 10% of a single day’s trading under any circumstance, and would prefer to be closer to 1% or unobservable in the volumes.

I wonder what affect capital gains had, and how long it took to change thinking. Graham was predominant immediately thereafter, and may have blunted thoughts of tax-affected investing. I also wonder about Markowitz (1952) and Kendall (1953) and how their work may have changed investor perspectives. Any time investors leave money on the table, management is sure to take it.

Do you have a source for dividend data going back to the 1880s?