BTW Igy after my early morning workout, I will be taking my wife to the Mayo for some allergy testing. We are not dissimilar...although there will be NO Wendy’s afterward!!
BTW Igy after my early morning workout, I will be taking my wife to the Mayo for some allergy testing. We are not dissimilar...although there will be NO Wendy’s afterward!!
seattle prattle wrote:
Racket wrote:
...seattle, those 3x ETFs aren't meant to be held for long than a couple of days. The 3x leverage only plays out f you get an exact linear growth of the underlying. The daily re-balancing will knock out gains otherwise. Plus they tend to have maintenance fees
Racket, thank you for taking the time to give me some advice.
But while i have heard this a lot - it is the conventional wisdom that the daily re-balancing will mitigate gains, i just have not found that to be the case most of the time, and even when it is true, it doesn't mitigate by much.
I have done really well holding TNA for many years. The proof is the unrealized gains column that shows big run-ups.
Let me offer to you that daily re-balancing does draw a few percent off of what might be an otherwise triple mutiple of a long term gain of the straight unleveraged index, but a few percent over a long time is still small relative to the outsized tripled gains.
Just for a double check, i ran the numbers for the S&P 500 and for the Nasdaq, both for the straight index and for the 3x leveraged ETF tracking that index for the YTD.
Russel 2000 Small cap: +16.7 %
TNA (3x leveraged Russel 2000): +56 %
QQQ (Nasdaq 100) index: 22.4 %
TQQQ (triple leveraged Nasdaq 100): 80.9 %
As for the fees, they group right around 1% annual. Do you know how many people in the workforce pay fees that large or larger every day on the mutual funds in their retirement accounts? And remember, the leveraging is essentially borrowed money, and alternatively, the interest you would pay on a brokerage account to trade on margin is many times more expensive than that. Ultimately, the 1 % fee has to be figured into one's gains to make sure one is still making enough off the trade to justify it.
Again, thanks for taking interest. But trust me when i tell you that i have done this since the triple leveraged ETFs came out and it has returned handsomely.
That said, I am planning on cashing out very shortly in that I've reached the fortunate point where i don't need the risk anymore and further upside really is not going to change anything for me and mine.
Nice talkin' to you.
Seeing as how many of these came out in like 2009, I'm not surprised they've done you well. We're all also benefiting from the first ever V shaped recovery. TQQQ was dead on Christmas Eve but then PPT came to the rescue and we've seen explosive (and almost perfectly linear) growth in the past 4 months. I mean the chart is almost a perfect straight line.
I've never heard of anyone holding these long term. But the US also just posted 3.2% growth so it seems like 10 more years of bull market run is on the menu
seattle prattle wrote:
and I have never traded options and won't. This old dog is too old to learn any new tricks, and they sounded way to risky for me up to now.
pffft you're not living unless you're exposed to 50% total loss of portfolio value in a single afternoon.
Also, a funny story : A good friend of mine works at a large investment bank and said one of the traders there had opened a huge position on wheat futures but then forgot about for some reason. The contracts expired with obligation to buy, and about 10 semi-trucks rolled up to the bank with like a million bushels of wheat in tow. The bank had to buy a huge storage for it all and try to sell it as a raw commodity and ended up with a colossal loss.
I think about this with my oil futures. One day I'll get home from work with 1000 barrels of oil on my doorstep lol
Seriously though, 3.2% GDP growth last quarter!
The dollar is strong so I assume that means emerging markets should be taking a huge sh!t anytime now.
Also to agip : if domestic growth is actually this strong then this is an even bigger case for the Fed being the #1 stock market mover. Fed policy is officially the most important thing ever and can cause a -5% day if Powell even suggests a possibility of maybe one day in the future perhaps raising the rate by .1%
Lemons wrote:
So in the end, you verify my point that you have missed out on a lot of potential profits by essentially sitting out a large amount of the bull market. Thanks for your honesty. It’s a welcome change.
Not necessarily, like in the 4th Quarter when it turns the other way it comes out of the blue. Thanks for your lack of harrassment. It’s a welcome change Detector Dude.
Racket wrote:
Seriously though, 3.2% GDP growth last quarter!
The dollar is strong so I assume that means emerging markets should be taking a huge sh!t anytime now.
Also to agip : if domestic growth is actually this strong then this is an even bigger case for the Fed being the #1 stock market mover. Fed policy is officially the most important thing ever and can cause a -5% day if Powell even suggests a possibility of maybe one day in the future perhaps raising the rate by .1%
Seems to me the Fed is in a pickle, which shouldn’t surprise anyone. You fill the punch bowl the party gets very loud, you pull the booze away and the drunks leave.
https://mobile.twitter.com/DianeSwonk/status/1121755189747306497Racket wrote:
Seriously though, 3.2% GDP growth last quarter!
The dollar is strong so I assume that means emerging markets should be taking a huge sh!t anytime now.
Also to agip : if domestic growth is actually this strong then this is an even bigger case for the Fed being the #1 stock market mover. Fed policy is officially the most important thing ever and can cause a -5% day if Powell even suggests a possibility of maybe one day in the future perhaps raising the rate by .1%
Oh, Racket, did your friend keep his job? One reason I think the crack will be greater is a lot of young traders like your friend. Will get pummeled in the next downrurn.
Ghost of Igloi wrote:
https://mobile.twitter.com/DianeSwonk/status/1121755189747306497Racket wrote:
Seriously though, 3.2% GDP growth last quarter!
The dollar is strong so I assume that means emerging markets should be taking a huge sh!t anytime now.
Also to agip : if domestic growth is actually this strong then this is an even bigger case for the Fed being the #1 stock market mover. Fed policy is officially the most important thing ever and can cause a -5% day if Powell even suggests a possibility of maybe one day in the future perhaps raising the rate by .1%
Oh, Racket, did your friend keep his job? One reason I think the crack will be greater is a lot of young traders like your friend. Will get pummeled in the next downrurn.
My friend wasn't the one that made the blunder but his coworker did keep his job. Apparently, he's "really good" and they were willing to overlook his mistake lol
Ghost of Igloi wrote:
Lemons wrote:
So in the end, you verify my point that you have missed out on a lot of potential profits by essentially sitting out a large amount of the bull market. Thanks for your honesty. It’s a welcome change.
Not necessarily, like in the 4th Quarter when it turns the other way it comes out of the blue. Thanks for your lack of harrassment. It’s a welcome change Detector Dude.
I suggested that you had no more than 40% exposure to equities in recent years and you verified that with your data. I’m not sure why you are now trying to spin that into something else.
Racket, there was a similar story a number of years ago. The trader was suppose to close a position, kept going up so held, then turned dramatically down on an economic event costing his firm a $Billion. I think it may have been a JPM trader based in London. The London Wale perhaps. A little foggy on the facts.....
Ghost of Igloi wrote:
Racket, there was a similar story a number of years ago. The trader was suppose to close a position, kept going up so held, then turned dramatically down on an economic event costing his firm a $Billion. I think it may have been a JPM trader based in London. The London Wale perhaps. A little foggy on the facts.....
Similar story but not as funny as ending up with a ton of physical commodities at your doorstep. I believe the premise of that was JP Morgan was betting credit markets would strengthen by shorting an interest rate spread tracking ETF (or some derivative) and made such huge trades that it was significantly moving the market. The funny part about that was that everyone knew the trade was gonna bust so the piled in on the other side. One of the banks that bet against JP Morgan was.... JP Morgan. A separate branch (unaware of London activity) ended up on benefiting from the huge bust
Lemons wrote:
By your own admission, you invest in a stock fund which is 40%, or less, of your investment portfolio. Or where those more lies?
It's a lie.
Nobody in their right mind would have anything invested in the Market if they thought a drop of 60% was right around the corner. Which he's been saying on here for over 4 years.
Claiming 40% is BS. He's been out of the market since 2011 and now realizing he blew it, he's claiming he has been a big market player for years. Pure BS.
Long Term Capital arbitrage trade was similar in structure, in that it was obvious to everyone who then piled on to the other side. Then you had the Russian Ruble collapse which pushed a bad trade into a threat to the financial system. The Fed got the major investment firms to collectively unwind the damage. You have similar lopsided trading today, as noted the over loading largest capitalization stocks to drive the direction of the market up. It will unwind the other direction, more dramatically. To assume otherwise does not make any sense.
mister wrote:
Lemons wrote:
By your own admission, you invest in a stock fund which is 40%, or less, of your investment portfolio. Or where those more lies?
It's a lie.
Nobody in their right mind would have anything invested in the Market if they thought a drop of 60% was right around the corner. Which he's been saying on here for over 4 years.
Claiming 40% is BS. He's been out of the market since 2011 and now realizing he blew it, he's claiming he has been a big market player for years. Pure BS.
Never said what he claims. Never have been out of the market. Facts are a flat S&P 500 1/1/2018 thru 3/31/2019. Meagre stock returns last 20 years. You are the stupid muppet making up B.S. even whrn the facts show otherwise. Loser dope.
mister wrote:
Lemons wrote:
By your own admission, you invest in a stock fund which is 40%, or less, of your investment portfolio. Or where those more lies?
It's a lie.
Nobody in their right mind would have anything invested in the Market if they thought a drop of 60% was right around the corner. Which he's been saying on here for over 4 years.
Claiming 40% is BS. He's been out of the market since 2011 and now realizing he blew it, he's claiming he has been a big market player for years. Pure BS.
Loser dope:
Twenty year S&P 500 return at highest prices ever:
Index return annualized 3.943%, with dividends reinvested 5.865%
Adjust for inflation (CPI)
Index return annualized 1.780%, with dividends reinvested 3.662%
Ghost of Igloi wrote:
https://mobile.twitter.com/DianeSwonk/status/1121755189747306497Racket wrote:
Seriously though, 3.2% GDP growth last quarter!
The dollar is strong so I assume that means emerging markets should be taking a huge sh!t anytime now.
Also to agip : if domestic growth is actually this strong then this is an even bigger case for the Fed being the #1 stock market mover. Fed policy is officially the most important thing ever and can cause a -5% day if Powell even suggests a possibility of maybe one day in the future perhaps raising the rate by .1%
Oh, Racket, did your friend keep his job? One reason I think the crack will be greater is a lot of young traders like your friend. Will get pummeled in the next downrurn.
Well first thing is that this GDP reading seems to be temporary and not likely to repeat next q.
In light of this GDP number, the 4Q bear market is a strange anomaly, yes. One would think that the invisible hand would have stepped in and bought stocks in December, knowing that the economy was humming along. But the reverse happened - tons of hands threw their shares overboard. You are saying that they sold because of the fed's taking away the punchbowl, and could happen again.
Yeah, I guess. Impossible to know, esp with AI bots doing so much of the trading and not people. And with so many trillions in ETFs that can be sold with a click immediately.
But I hear you. I have no strong opinion. I don't want to believe that the Fed is actually driving the stock market, but maybe it is.
Ghost of Igloi wrote:
Long Term Capital arbitrage trade was similar in structure, in that it was obvious to everyone who then piled on to the other side. Then you had the Russian Ruble collapse which pushed a bad trade into a threat to the financial system. The Fed got the major investment firms to collectively unwind the damage. You have similar lopsided trading today, as noted the over loading largest capitalization stocks to drive the direction of the market up. It will unwind the other direction, more dramatically. To assume otherwise does not make any sense.
Maybe. I do believe I remember seeing a note that 2018 had the most options activity (in terms of buying and selling) in history. Dangerous world with that many options flying around since the option writers aren't even close to being liquid enough if they get exercised against en masse (that happened to me once! yay!).
Liquidity in ETFs is a major black hole too. It's funny how many ETFs and 3x ETFs popped up in 2009. Redemption and creation all goes on in dark pools behind the scenes
My view would be those very things create a fragility to the market. The up direction of the market and rapid recovery in downdrafts creates an impression of stability where on the other hand there is less. Computer linked trading, algos assume much but once liquidity disappears where is the price discovery? Well since price has been manipulated by easy money it is much lower than the current print. As this goes on my view becomes more Bearish.
Ghost of Igloi wrote:
mister wrote:
It's a lie.
Nobody in their right mind would have anything invested in the Market if they thought a drop of 60% was right around the corner. Which he's been saying on here for over 4 years.
Claiming 40% is BS. He's been out of the market since 2011 and now realizing he blew it, he's claiming he has been a big market player for years. Pure BS.
Loser dope:
Twenty year S&P 500 return at highest prices ever:
Index return annualized 3.943%, with dividends reinvested 5.865%
Adjust for inflation (CPI)
Index return annualized 1.780%, with dividends reinvested 3.662%
Igy - I already presented you with annualized returns for decades for the last 110 years. Every decade except for your oft-mentioned 2000 to 2009 has annualized returns around 10% or higher, in some instances much higher. So only one decade has lackluster results and that is the only one you ever mention.