Hi William,

In defense of levered ETFs, I do not disagree with any of your points. I would like to add that if levered ETFs offer 1.4 times the return with about 2 times the risk, does this not then make them excellent candidates for a short volatility option strategy? Perhaps nothing as simple as covered calls, but it seems that there is an opportunity there to get paid for risk one is not actually taking.

Just a thought. Seems I missed the deadline, but would appreciate a potato nonetheless. Out of all the investments you mention, I guess I like the potato the best after all!

Very truly yours,

James Herrell, CFA
1216 State Street. 3rd Floor
Santa Barbara, CA 93101