Stocks for the Long Run : the Definitive Guide to Financial Market Returns and Long-term Investment Strategies

15

CHAPTER

THE RISE OF EXCHANGE-TRADED

FUNDS, STOCK INDEX FUTURES,

AND OPTIONS

When I was a kid—a runner for Merrill Lynch at 25 dollars a week—

I’d heard an old timer say, “The greatest thing to trade would be stock

futures—but you can’t do that, it’s gambling.”

LEOMELAMED, 1988^1

Warren Buffett thinks that stock futures and options ought to be out-

lawed, and I agree with him.

PETERLYNCH, 1989^2

If someone were to ask what stock traded the largest dollar volume in

the United States in 2006, what would you guess? General Electric,

Exxon Mobil, Microsoft? The surprising answer is a stock that was not in

251

(^1) Leo Melamed is the founder of the International Money Market, the home of the world’s most suc-
cessful stock index futures market. Quoted in Martin Mayer, Markets, New York: Norton, 1988, p. 111.
(^2) Peter Lynch, One Up on Wall Street, New York: Penguin, 1989, p. 280.
Copyright © 2008, 2002, 1998, 1994 by Jeremy J. Siegel. Click here for terms of use.