Will post some charts on COW & DBA for you asap.

I could not disagree with you more on this. You have been told something by your broker and took it to be factual without taking just a few minute to verify it. Yes, there is some underperformance of the underlying commodity due to the factors that I mentioned above but it is minimal & far overshadowed by the benefits of having the ability to easily gain exposure to a particular commodity that one wants to trade, long or short, via the ETNs for those that don’t have the ability or means to trade futures. I will expand on my comments regarding the commodity ETNs in a new post above since you are not the first person to vehemently state these are horrible trading vehicles that should be avoided.

I have to disagree wiseguy….I kinda look at this site as a learning/coaching experience. so example if I know something esp. what I mentioned above I want to bring it out in the open, I certainly wouldn’t want to mislead anyone esp. the inexperienced. its like having a pool party and throwing one of your guest into the pool assuming they know how to swim…lol

wow….this guy hit the ball out of the park. he’s absolutely right and makes sense. I agree totally with his comment. who wants to take a chance or gamble when the odds are stacked against you from the get go.

Over time, yes, any commodity tracking ETN will underperform the actual underlying commodity due to the management & internal commissions/fees, contango, etc. Then again, an individual investor will also underperform the actual commodity trading futures due to commissions, contango, slippage, etc.. That’s simply the nature of the beast. Unless you live in Kansas & know a wheat farmer who will sell you bushels of wheat & you have a barn to store it in & very quick access to a local market to sell it (ditto for soy beans, coffee, crude oil, etc..) you can’t directly trade physical commodities so yes, everyone is guaranteed to underperform whether you trade futures or ETNs.

What you must realize is that a large percentage of traders & investors following this site, quite possibly the majority, do not have the experience, access (via a futures account) or the capital to trade futures contracts. As such, I opt to post charts of commodity tracking ETNs although I also post charts of the spot or continuous futures contracts as well as specific (near-month) futures contracts both on the front page & trading room.

Regarding your brokers comments that you passed along, I recently addressed that in response to a nearly identical question. That response, along with the reasoning being trading & posting analysis on commodity ETNs can be found on the second half of this post from April 21st: http://rightsideofthechart.com/weat-nib-trades-ag-commodity-tracking-etn-comments/