I predict that LBJ will hit $70/share at some point during 2011. If LBJ hits 70, that would be a gain of about 72.4% from the closing price of $40.60 on December 31, 2010.
I do not think this is an unreasonable price target and LBJ could even potentially go much higher than 70 if Emerging Markets really take off.
As we all know, LBJ is structured to return 3x the daily returns of the S&P Latin America 40 Index. Last year the S&P Latin America 40 Index gained about 16.64% while LBJ gained about 19.50%.
During the time period between December 31, 2002 and December 31, 2007, the S&P Latin America 40 Index gained a total of 668% and the annualized gain over that time period was about 50.7% per annum. During that time period, the lowest return for the S&P Latin America 40 Index was during 2004 when the Index rose 38.62%. An ETF providing exactly 3x the daily returns of the S&P Latin America 40 Index would have gained about 133%.
If the hot money returns to Brazil and the rest of Latin America, it wouldn't surprise me to see a +30% gain in the S&P Latin America 40 Index. If that were to happen, LBJ could easily hit 70 if not 80 or higher.
My prediction for LBJ in 2011 was obviously way off, although that is the nature of triple leveraged ETFs - they quickly rocket or plummet.
I think that LBJ probably will hit single digits and soon. However, at some point during the next few months the market will eventually start to stabilize and LBJ will finally start rising again.
I went the wrong way on my recent trade, long at 19.4, trying to catch a pop to 21. I agree longer term LBJ will be a big winner just not now. Take my loss here soon and wait for better days. GLTA
It looks like LBJ won't come close to hitting $70 this year. Valuations of the Brazilian stock market keep getting lower and lower and at some point the "smart" money will start to flow back into Brazil and other Latin America markets. Whenever LBJ does move it is going to rocket higher all of a sudden. I still think that LBJ could at least hit at least $50 later this year.
It is amazing how quickly fortunes can change with triple leveraged ETFs. Brazil is officially in bear market territory and it appears as though Latin America stocks are going to go a bit lower. The long term outlook is still good, but it is definitely possible that LBJ could hit $20. I am a big fan of LBJ and don't want to see it hit $20, although I am a realist.
Brazil is killing LBJ right now. As of January 28, 2011, the MSCI Brazil Index is down 6.2% and during 2010, the MSCI Brazil Index only increased a pedestrian 6.5%.
Between 2003 and 2007 the annualized returns of the MSCI Brazil Index was 64.07% per year. When the MSCI Brazil Index returns to form and posts a strong annual 40% gain, LBJ will probably increase 100% or more.
My price target is $61. That is based on the info. we have as of today. Obviously, it might go higher, but also lower, depending on what happens during the year.
However, I am accumulating in LBJ, as it offers potential.