fmnqjnd.info

Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio

By Rob Isbitts

Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.

Industrial vs Non-industrial Plasma machinesPlasma cutting technology is a widely used process that has gained widespread popularity for its ability to cut most forms of metal and is quite favoured for its simplicity in use. It’s versatility with its range of capabilities and applications have made it a universally accepted metal cutting process.Non-industrial Plasma Non industrial plasmas are best suited for garage users of steel fabrication who require plasma cutting perhaps 2-3 hours per day 3-4 days per week. A plasma in this class is best suited to small operations that work on mostly customised jobs. Non industrial plasma units are much cheaper to purchase than industrial plasmas but cannot tolerate the ongoing high volume that an industrial Plasma is designed for. Air plasmas and lower end conventional mechanised plasmas generally fall into the category of non-industrial plasmas.Industrial Plasma Industrial plasmas refer to plasma units geared towards high volume large production facilities that have enough work to elicit a machine to operate a full eight hour shift five days per week. Plasmas in this class usually can operate up to three eight hour shifts per day, seven days per week if necessary. If your operation fits into this category then an industrial plasma is not only preferable, but an absolute necessity.Higher end Conventional plasma and High Definition Plasmas fall into the category of industrial plasmas. With modern day advances however High definition is generally the plasma of choice due to the higher levels of automation they provide as well as the higher level of cutting proficiency they are capable of achieving.Advantages of Industrial Plasma (high definition plasma) • Lower operating Costs• Oxygen and multi-gas capability for improved• Faster Cut speeds• Improved weldability• Significantly longer consumable life• Thicker cutting capability• Quick disconnect torch• 100% duty cycle• Hi-Definition technology• Best cut quality including squarer edges and rounder holes• Mark, cut and bevel with the same consumables• More process options for optimizing cut quality• Remote (CNC) gas switching capability• Patent TruHole technology for best plasma cut holes – unique to Hypertherm high definition plasmas• Hdi thin stainless technology• Optimal gas mixing for mid-range stainless steel• Higher pierce capability• Much higher automation• Higher resale value• Much longer life on machine• Significantly higher production capability• Significantly higher computer aided design capabilityEssential components of an Industrial plasma cutting machine What is most essential to a plasma machines ability to provide continuous quality cutting are the ‘Controllers’ of a plasma unit. A well-engineered, well-constructed control unit is essential to providing consistent high level cutting precision and quality, carried out at high speeds over long hours. A poor to average control unit is incapable of achieving consistent precision especially over long production intervals where it is likely to overheat or break down.Controllers consist of five main components: Power source, controller, a lifter, drives and servo motors.Power SourceIt is very important to get a renown plasma source for your machine to achieve a high performance and reliability to deliver consistent cut quality, high productivity, lowest operating costs whilst lasting you a long time for your business.LifterThe lifter is an essential component providing precise height control of the plasma torch. Utilising a quality THC height sensor will reduce the cut to cut cycle time (up to 60%), provides better cut quality due to proper assembly of torch height, savings on power and longer consumable life.In addition the quality torch height controllers automatically adjusts voltage for proper torch height to optimize cut quality and consumable life. Traditional torch height controls require an operator to periodically adjust arc voltage to ensure proper cut height.Control The controller needs to have all the process expertise built in resulting in flexibility and ease of use for the end user. A quality controller has a digital I/O sercos system that will deliver reliable motion system quality and will improve the cut quality and productivity.The software should allow flexibility and ease of use for the end user, so a person with little or no experience on the controller can cut like a seasoned professional in as little as a day.High End Servo Drives and motorsHigh end drives like Bosch help ensure high stiffness essential for accuracy, minimal backlash and easy adjustment. The servo drives receive command signals that amplify and transmit electric current to the servo motor in order to produce motion proportional to command signals.Their main advantage over DC and AC motors used in non-industrial plasmas is the addition of motor feedback which can be used to detect unwanted motion or to ensure the accuracy of a command motion. Servos in constant speed changing use typically have a better lifecycle than DC/AC motors and can also act as a brake by shutting off generated electricity from the motor itself.Bosch Servo motors Bosch servo motors allow for precise control of angular position, velocity and acceleration. It consists of a sophisticated motor coupled to a sensor for position feedback.Stepper motors typically used in low end CNC machines provide no feedback encoder as drive signal specifies the number of steps of movement to rotate. This lack of feedback limits performance as the stepper motor can only drive a load that is well within its capacity otherwise missed steps under load may lead to positioning errors.Low rails Industrial plasma’s usually feature low rails secured to the ground to ensure the highest level of stability driven by helical drives to provide optimal accuracy during the rapid fast moving of the plasma beam during long production intervals.Table design rails usually seen on non-industrial plasmas won’t have the same level of rigidity and are thus less suited to high volume rapid pace production. In addition with rails built onto the cutting table and so close to the plasma, with constant long duration cutting the rails are at risk of distorting in shape (over time) due to the constant exposure to heat.CAD / CAM software To greatly improve the efficiency of production in a high volume settings you require a more advanced software to provide a much wider range of functions which greatly enhance the productivity of that operation. Using a more advanced software unit can provide some of the following advantages just a to name a few:• Import CAD and CNC files• Separate multiple parts from a single CNC file• Group Parts into clusters for nesting• Automatic and manual nest sequencing• Control cut directions and cut sequencing on part by part basisThe addition of a quality software allows a much higher level of automation, significantly reducing key punching and is user friendly enough to allow even the most novice operator to cut parts like a seasoned professional.Cutting table For the purposes of industrial fabrication it is essential that a cutting table is well constructed, heavy and durable to meet the demands of an industrial operation. In most non-industrial plasma units, cutting tables are constructed from thin sheet metal and alluminium castings to reduce the cost of the overall unit. The problem with this is that due to the thin, light construction, the table can shake or wobble, adversely affecting the accuracy of a cut part. Furthermore over long production periods, due to the ongoing exposure of heat generated from the plasma these tables are likely to distort over time.The durable robust construction of an industrial plasma table is essential to give the table stability for the highest level of accuracy and to prevent heat distortion.Industrial plasma units usually offer the choice of a water or dry table with a dust collection unit. Water tables are cheaper to purchase but require much more ongoing maintenance and cleaning which over time becomes more expensive than using a dry table with a fume extraction unit. In an industrial environment both are acceptable.Non-industrial plasmas usually come with water tables once again to reduce overall the cost of the unit though some are offered with a dry table and fan which is only sufficient in removal of dust and fumes in a light fabrication setting.Having a Support team The purchase of a Plasma machine whilst being an expensive investment can provide enormous returns to any business where there is a demand for work, the correct facilities are utilised and they are maintained with the right level of care.It is essential therefore that a full support team is available to service your machine for ongoing maintenance, in the incident of a breakdown or where any other form of technical support is required.In any high volume industrial environment any down time can translate into large losses in profit so it is important to have a local service team, but more to the point a team who knows the full operation of the machine from bolt to bolt, to shorten the time required to fix the machine, though also to provide phone support for quick fixes that do not cost any call out fees.Why Non-Industrial Plasmas are so much cheaper to purchase than Industrial Plasmas Many first time buyers of Plasma machines may look into purchasing a non-industrial plasma as a form of entry level use not fully understanding the full capabilities or limitations they have especially when compared to industrial level plasmas.A cheaper price tag is often the motivator to go with a non-industrial plasma but in the long run once users have been able to thoroughly compare the two in performance, reliability and productivity it becomes very clear why non-industrial plasmas are so much cheaper.In most situations fabricators who start out using non-industrial plasmas find with ongoing use that their functional capacity is very limited and with further research and exposure to industrial plasmas that they eventually upgrade to one as they provide much greater productivity, more flexibility in use and better quality cut parts with consistent precision. In addition industrial plasmas have a much greater lifespan, are a lot more durable and are built to handle a much higher degree of volume equating to far better value.Many manufacturers of non-industrial plasma machines try to capitalise on the lower end cheap market by providing only the bare essentials of plasma cutting. Many of the reasons they can offer a plasma machine at a cheaper price is due to reasons including:- Often software is not included in the package and in many cases users need to integrate a separate laptop/PC to operate the CNC cutting function. Even when software is provided usually they only provide very basic functions.-Table and beam are constructed of thin light constructed sheet metal, not suited to heavy duty fabrication and are highly likely to distort in shape over time, due to ongoing heat exposure generated from the plasma. Rails are also built onto the table rather than being bolted into the ground.This type of design does not provide the stability required to support quality precision during fast rapid movement due to the lack of rigidity and lightness of the table construction.-Use of DC/AC motors and stepper motors as alternatives to drives and servo motors translate to limited performance, slower cutting, inconsistent poorer precision and positioning, slower acceleration and velocity.-Fume extraction units are not included and another way to reduce the price on non-industrial units. A water table or dry table with fan are usually what are provided, though with light fabrication this is usually sufficient.-Cheaper components are normally incorporated that don’t have any real brand reputation for performance or reliability.-Aside from the above non-industrial plasmas can generally operate perhaps 2-3 hours per day 4-5 days per week and have an average lifespan of about 3-5 years.Conclusion For those considering the purchase of a plasma unit it is very important to be clear on the capability of the unit and whether or not that unit can meet all their requirements not just that of a single part.Plasma machines have been designed to provide varying levels of functionality with a price range to match. Industrial plasma machines are logically more expensive but when the components are thoroughly broken down, one can clearly see that the cost is commensurate with the performance and capability, and in retrospect this is also true of non-industrial plasma machines. When matched in the suitable environment, business owners often see a return on investment within 2-3 years and as smaller businesses grow, industrial plasmas become a very natural progression.