• Xenforo Cloud is upgrading us to version 2.3.8 on Monday February 16th, 2026 at 12:00 AM PST. Expect a temporary downtime during this process. More info here

Economy stonks only go up v6.1

Status
Not open for further replies.
Oliver Clothesoff said:
On top of what we already lost or in Total? Our Portfolio seems to be down about 20% right now. If it goes another 50% that's a 70% dive... that would be... bad.
Click to expand...

Yes on top..i been staying away from the markets last few years comfortably living off my CDs but analyzed the charts this week to prepare for rotation

First long term support is 5k on the nasdaq..if you look at the spike since 2016 it just screams bubble..then if that breaks we may ride it down to 3k

Its a wide range so i plan to employ a sliding scale strategy with initial 20% or so at 5000-5250 then add 10% for every 250pts all the way down to 3k

Given the rise of the "new" economy nasdaq is the way to play the future imo..especially if social distancing and online commerce becomes a theme after this pandemic

Tqqq will be my ETF of choice..it is a triple levered play on the nasdaq..i.e. for every 1% it will go up or down 3%

Look at its long term chart..it went from 2 to 120 in less than a decade..if you average down between 3k and 5k and hold it for 10 years it will likely crush any other index return
 
Parmenides said:
Yes on top..i been staying away from the markets last few years comfortably living off my CDs but analyzed the charts this week to prepare for rotation

First long term support is 5k on the nasdaq..if you look at the spike since 2016 it just screams bubble..then if that breaks we may ride it down to 3k

Its a wide range so i plan to employ a sliding scale strategy with initial 20% or so at 5000-5250 then add 10% for every 250pts all the way down to 3k

Given the rise of the "new" economy nasdaq is the way to play the future imo..especially if social distancing and online commerce becomes a theme after this pandemic

Tqqq will be my ETF of choice..it is a triple levered play on the nasdaq..i.e. for every 1% it will go up or down 3%

Look at its long term chart..it went from 2 to 120 in less than a decade..if you average down between 3k and 5k and hold it for 10 years it will likely crush any other index return
Click to expand...

It depends on the length of the depression. What if it continues below 3? If the recovery is slow which it very well could be with significant interest rate decreases to stimulate the economy not really being possible then decay and volatility can fuck your expected return.

Leveraged ETF's replicate the daily trading results and aren't really made for long term. Leveraged ETF's will under perform their Index quite a lot during sideways action and volatility due to this. They will also over perform during long and large bull runs. It's how the math and portfolio management works.

I'm not saying it's a bad decision to use leverage. I'm actually with you but I'd say committing to dollar cost averaging over an extended period of years will provide a substantially decreased level of downside risk if we're hit with a slow recovery or volatility with little to no expected decrease in potential returns.

I don't want to sound patronizing to you explaining how they work but it's just that your entry strategy of averaging down doesn't really account for the risks volatility or sideways action present to a leveraged ETF.

Just my two cents.
 
Despite throwing down over ten thousand on puts at the end of the week I can’t help but wish I put more down.
 
I sold my leveraged 3x ETF two years ago. Best fucking decision I made. You're better off picking a long term growth stock. Whoever stayed in must lost at least 80% of their holdings.
 
Cid said:
It depends on the length of the depression. What if it continues below 3? If the recovery is slow which it very well could be with significant interest rate decreases to stimulate the economy not really being possible then decay and volatility can fuck your expected return.

Leveraged ETF's replicate the daily trading results and aren't really made for long term. Leveraged ETF's will under perform their Index quite a lot during sideways action and volatility due to this. They will also over perform during long and large bull runs. It's how the math and portfolio management works.

I'm not saying it's a bad decision to use leverage. I'm actually with you but I'd say committing to dollar cost averaging over an extended period of years will provide a substantially decreased level of downside risk if we're hit with a slow recovery or volatility with little to no expected decrease in potential returns.

I don't want to sound patronizing to you explaining how they work but it's just that your entry strategy of averaging down doesn't really account for the risks volatility or sideways action present to a leveraged ETF.

Just my two cents.
Click to expand...

Its a short term disruptive event..not a depressionary scenario

The tqqq chart proves you wrong on leveraged etf's not being made for long term..despite the crash its still at 35 vs 2 in 2012

I already said what you pointed out..be prepared to take short term hits on initial positions..hence the sliding scale strategy..and big volatility while positioning for a 10 year long haul
 
Orgasmo said:
I sold my leveraged 3x ETF two years ago. Best fucking decision I made. You're better off picking a long term growth stock. Whoever stayed in must lost at least 80% of their holdings.
Click to expand...

Wrong..there is substantially more risk in picking a single stock over an index fund..even a leveraged one

While your decision may look good right now..you also missed out on a 5x increase in for example tqqq that you could have locked in before the blow up or at 3x or 4x shortly after the crash started..in fact tqqq is still up 20% right now from exactly 3yrs ago
 
Parmenides said:
Its a short term disruptive event..not a depressionary scenario
Click to expand...

Would be nice to be able to predict the future with absolute certainty. Wouldn't have to stick with these silly strategies that can be used no matter the market outcome.
 
Guys, it's simple. Buy puts for the front end and wait until the market tanks to at least 50% from prior high before you even think about buying again.
 
Cid said:
Would be nice to be able to predict the future with absolute certainty. Wouldn't have to stick with these silly strategies that can be used no matter the market outcome.
Click to expand...

And those would be..?
 
I hope you have your wheelbarrows ready for the amount of money you will need to buy a loaf of bread.
 
Parmenides said:
And those would be..?
Click to expand...

Dollar cost averaging rather than averaging down.

Without the leverage averaging down is fine. If you buy near the bottom and it does nothing you won't lose much.

With leverage that's a different story. Sideways action will result in losses. Volatility will result in losses. Even if the index doesn't go down you'll lose money. If the market goes up they need to increase their position so that they can match the next day if the market goes down they sell positions. Essentially they buy high, sell low.

When I said they're not made for long term I wasn't wrong. The stock market can go up 5% in a year while its 3x leveraged ETF can go down 10% in the same year. It's because they're designed to replicate the day to day trading.

You are right that holding them long term can be very financially beneficial, but I didn't really contend that. In fact I plan to do the same thing.

What I'm saying is that even if you time the absolute bottom of the market which is what you're basing your investment timing off you may miss the bottom of the leveraged ETF.

And that if you miss the bottom of the market you may drastically miss the bottom of the leveraged ETF.

And that if you drastically miss the... you get the point right?


Cliffs:
You risk blowing your load too early.

And I'm being nitpicky, the strategy I plan to employ is only slightly different. But it comes from love bro, small differences can result in drastically different returns, I ain't trying turn this into a dick measuring contest.
 
Last edited:
Status
Not open for further replies.

Latest posts

Forum statistics

Threads
1,282,138
Messages
58,418,952
Members
176,032
Latest member
clowning

Share this page

Back
Top