Hougan's recommendation leaves $100 million+ in new investor money twisting on a vine.

When Matt Hougan posted a blog under the banner headline "Don't Buy USO, Buy USL Instead" on February 9, USL assets stood at under $10 million. A couple of close industry observers pointed out to me that in the wake of publication, the Hougan blog, which got a huge number of clicks, not just on our site, but also on Seeking Alpha and Yahoo, had apparently given USL the "Hougan bump" and had driven up assets to over $130 million in the fund overnight (it now stands at right around $150 million compared to USO's $3.5 BILLION).

And if you don't believe in the "Hougan bump," take a look at these trading volumes. Once again, Matt posted his blog on February 9.

USL Trading Volume
Feb 2: 30,800
Feb 3: 8,500
Feb 4: 2,900
Feb 5: 10,400
Feb 6: 46,600
Feb 9: 293,100
Feb 10: 602,800
Feb 11: 599,300
Feb 12: 663,400

Now let's take a look at the $3 billion+ USO fund volumes over those same days:

USO Trading Volume:
Feb 2: 28,032,500
Feb 3: 25,239,900
Feb 4: 33,293,400
Feb 5: 30,365,700
Feb 6: 67,680,300
Feb 9: 37,073,300
Feb 10: 47,440,900
Feb 11: 39,360,000
Feb 12: 42,391,700

I would say that is some pretty conclusive evidence of the "Hougan bump." Too bad the investors who were a part of it have gotten HAMMERED by taking up Wise Hougan's advice, as contango (which in his defense, Matt did warn about) has come in significantly since Matt's warning note was published.

A quick check of Yahoo Finance shows a February 9 USL close of $30.70. As of yesterday's close, USL was trading at $29.34. So the USL investors who acted on Matt's "advice" were down 4.42% in just 6 weeks. On the other hand, the fund Hougan warned AGAINST (USO) was trading at $28.25 at the close on 2/9. Yesterday's close was $29.44—UP 4.21%. That is a swing of 8.63% in just 6 weeks, Matt! Could you have called that one any worse? For the curious, spot prices over the same time have moved from 39.58 to 49.16. Up 24.20%!

Welcome to the wacky world of futures. Again, know what you're buying or don't buy it. Otherwise, even if you're a smart guy like Matt, you may end up down when you thought you'd be up.

Here's some interesting background links on the article:

One of the original pieces Brad Zigler, who works for us, had written back when USL WAS indeed cleaning USO's clock. Apparently there is no "Zigler bump."

A nice list of all the oil ETFs/ETNs in the world, including all of the inversed and leveraged varieties, if you'd like to look at historical data yourself and see all the ways you can swim around in the petroleum futures market.