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Triple SPY looking pretty good right 'bout meow

Nerdyblop wrote:

at markets peaks is precisely when you want to look at max drawdowns. 

and even if you do not liquidate your position in a levered fund, that levered fund will still be forced to liquidate positions when it goes against them.

as for recovery cycles, levered etfs have had only 1 economic cycle, and its a 10 year trendy cycle that arguably is still ongoing.

in addition trends and volatility play a key role in your performance. timing will also play an issue. the more leverage you take, the more it will matter because they are using derivatives to achieve your desired return.

anyways my bottom line is i am not against using it, but i am against holding it to perpetuity. there just isnt sufficient data to conclude that the next recovery after a bear market will be as generous nor as trendy. 

What part of “YTD Return: 50.6%” is not up to your standards?

¯\_(ツ)_/¯ It be like that sometimes.

percentage gains is really meaningless. let me show you how much you need to make to get back even.

if you lose 25%, you need 33%

lose 50%, need 100%

lose 85%, need 566%

I love my cheese. I got to have my cheddar.

Nerdyblop wrote:

percentage gains is really meaningless. let me show you how much you need to make to get back even.

if you lose 25%, you need 33%

lose 50%, need 100%

lose 85%, need 566%

The 10-yr return jumps to 1,941.7% BTW.

Sounds like everyone’s still just scared about the bull run ending.

¯\_(ツ)_/¯ It be like that sometimes.

This guy and Ripple guy need to get a room together.

#FreeCVM #FreeTurd #2007-2017

CEO10K-DAY wrote:

Nerdyblop wrote:

percentage gains is really meaningless. let me show you how much you need to make to get back even.

if you lose 25%, you need 33%

lose 50%, need 100%

lose 85%, need 566%

The 10-yr return jumps to 1,941.7% BTW.

Sounds like everyone’s still just scared about the bull run ending.

as long as it doesnt fall by 95% then ur in the money! anyways thats the main concern with these levered etfs. blow up risk!

I love my cheese. I got to have my cheddar.

If the S&P 500 moves down 5%, a fund like the SSO should move down 10%. If we assume a share price of $10, the SSO should be down to about $9 after the first day. On the second day, if the S&P 500 moves up 5%, over the two days the S&P 500 return will be -0.25%. An unaware investor would think the SSO should be down 0.5%. The 10% increase on day two will bring shares up from $9.00–$9.90, and the SSO will, in reality, be down by 1%. It decreases a full four times the decline of the S&P 500.

Typically, you will find that the more volatile the benchmark (the S&P 500 in this example) for a leveraged ETF, the more value the ETF will lose over time, even if the benchmark ends up flat or had a 0% return at the end of the year. If the benchmark moved up and down drastically along the way, you may end up losing a significant percentage of the value of the ETF if you bought and held it. For example, if a leveraged ETF moves within 10 points every two days for 60 days, then you will likely lose more than 50% of your investment.

There are theoretical worlds. The stock market may not go up for the next 20 years. Then there are theoretical worlds that are less or more likely. You are just focusing on when the strategy doesn’t work irrespective of how frequently that sort of market occurs. Rookie forecasting mistake 

rawraw wrote:

There are theoretical worlds. The stock market may not go up for the next 20 years. Then there are theoretical worlds that are less or more likely. You are just focusing on when the strategy doesn’t work irrespective of how frequently that sort of market occurs. Rookie forecasting mistake 

The multiverse theory is generally accepted these days. That means there’s another universe with an Earth that’s exactly the same as ours but the only ETFs ever created have been leveraged to their benchmark. Just recently, someone on that Earth introduced non-levered ETFs and everyone is flocking to them because they’re less risky with a more predictable performance contour. Meanwhile the establishment is trying to squash them because they don’t provide enough return to meet the retirement needs of the planet’s inhabitants.

rawraw wrote:

There are theoretical worlds. The stock market may not go up for the next 20 years. Then there are theoretical worlds that are less or more likely. You are just focusing on when the strategy doesn’t work irrespective of how frequently that sort of market occurs. Rookie forecasting mistake 

Backwards looking; rookie forecasting mistake. 

"You want a quote? Haven’t I written enough already???"

RIP

lol how idiotic. to think that bonds work because of correlation. fixed bonds is simple math. you have fixed coupons that you receive. what changes is the price you pay for that bond. but ur coupon is fixed no matter what if u hold until it matures. the only way you’ll outperform when rates are low is if it goes lower and we have deflation, and deflation doesnt occur for a long time so to make a bet on bonds is stupid in the first place.

so when rates are low. bonds are **** in terms of returns and have a high level of risk depending on duration. the fact that this idiot thinks that correlations will hold and and expected returns will hold just cuz marker tanks is utterly why people have ocmplained about why people misuse correlation.

equities on the other hand is just somewhat different from a bond in that the coupons are not fixed and can changes depending on the performance of the business. i guess you can say its like a floating bond, cept a floating bond is pegged to overall cahnging rates that typically just follows overall inflation.

i recall you posted a super nice article that buffett wrote in the 1980s that broke it down this way. that was an awesome read.

this one just sounds like he data mined for a portfolio that will beat an index. this one feels like he cherry picked the damn drawdowns. im sure it’ll change dependoing on the next 30 years of spy data.

I love my cheese. I got to have my cheddar.

"You want a quote? Haven’t I written enough already???"

RIP