Down goes the Dow

Prof. Racket wrote:

Prof. Racket wrote:

I am almost certain it would be cheaper, less risky, and more profitable to just put your money in a 2x SP500 bull ETF. Even an active managed aggressive Vanguard would probably pay off more than this. I mean at least run the wheel if you're gonna bother with margin (

https://www.reddit.com/r/options/comments/a36k4j/the_wheel_aka_triple_income_strategy_explained/

)

But I gotta say, this is probably one of the funnier examples of picking up pennies in front of steamroller I've ever seen, except you're realistically not even picking up pennies, but rather fractions of pennies, and using a margin account with Robinhood of all things to do it.

See also:

https://en.wikipedia.org/wiki/Taleb_distribution

Just checked and SPUU is up 25%, SPXL is up 44% (both YoY).

i said that about two or three times, look at the leveraged ETFs instead. Yeah, a management fee of usually about a percent or so, but less than the cost of borrowing money, and none of the minimum maintenance requirements .

Prof. Racket wrote:

Prof. Racket wrote:

I am almost certain it would be cheaper, less risky, and more profitable to just put your money in a 2x SP500 bull ETF. Even an active managed aggressive Vanguard would probably pay off more than this. I mean at least run the wheel if you're gonna bother with margin (

https://www.reddit.com/r/options/comments/a36k4j/the_wheel_aka_triple_income_strategy_explained/

)

But I gotta say, this is probably one of the funnier examples of picking up pennies in front of steamroller I've ever seen, except you're realistically not even picking up pennies, but rather fractions of pennies, and using a margin account with Robinhood of all things to do it.

See also:

https://en.wikipedia.org/wiki/Taleb_distribution

Just checked and SPUU is up 25%, SPXL is up 44% (both YoY).

You can't buy and hold leveraged tickers and come out ahead. They're meant for day trading... Really showing your ignorance right now.

seattle prattle wrote:

Prof. Racket wrote:

Just checked and SPUU is up 25%, SPXL is up 44% (both YoY).

i said that about two or three times, look at the leveraged ETFs instead. Yeah, a management fee of usually about a percent or so, but less than the cost of borrowing money, and none of the minimum maintenance requirements .

Since you two apparently don't know anything about leveraged ETFs. Really disappointed in you both. Thought people on this thread knew basic things about investing. Sorry... Just saying.

Computer Geek wrote:

seattle prattle wrote:

i said that about two or three times, look at the leveraged ETFs instead. Yeah, a management fee of usually about a percent or so, but less than the cost of borrowing money, and none of the minimum maintenance requirements .

Since you two apparently don't know anything about leveraged ETFs. Really disappointed in you both. Thought people on this thread knew basic things about investing. Sorry... Just saying.

https://www.thebalance.com/leveraged-etfs-lose-money-357489

Gee, thanks, no one ever told me that. Now I know,

Hey, Professor, ever heard that before?

Best of luck with your margin debt.

seattle prattle wrote:

Computer Geek wrote:

Since you two apparently don't know anything about leveraged ETFs. Really disappointed in you both. Thought people on this thread knew basic things about investing. Sorry... Just saying.

https://www.thebalance.com/leveraged-etfs-lose-money-357489

Gee, thanks, no one ever told me that. Now I know,

Hey, Professor, ever heard that before?

Best of luck with your margin debt.

If you knew you can't buy and hold leveraged ETFs and make money, why would you suggest it? You're not following basic logic. I don't understand why this is so hard for you two to grasp. Comparing buying a major dip with margin at a 2.5% interest rate to leveraged ETFs is complete apples and oranges.

FWIW, I used this strategy in 2020 and had a 1 year return of over 70%. I bought in pretty close to the bottom though. Made more in one year with my investments than I had in the previous 5 combined since I "borrowed" money to buy the dip. I mean this objectively and with no intention of insult when I say you two seem blind to me. How this strategy works is like seeing your hand in front of your face.

leveraged etfs can distort returns as you describe but it doesn't always do that. You have to watch it and check it. They tend to do worse in volatile markets and do better in markets headed primarily in one direction.

I have held some long term leveraged ETFs for a few years at a time with mixed results, bailing when it was going askew.

It us easy enough to check. Compare a leveraged index ETF to one that is leveraged in the same index. Check various time frames. Decide for yourself.

Racket has advised before not to hold them long term, fwiw.

Good luck in your decision.

Computer Geek wrote:

Prof. Racket wrote:

Just checked and SPUU is up 25%, SPXL is up 44% (both YoY).

You can't buy and hold leveraged tickers and come out ahead. They're meant for day trading... Really showing your ignorance right now.

k

seattle prattle wrote:

Gee, thanks, no one ever told me that. Now I know,

Hey, Professor, ever heard that before?

Best of luck with your margin debt.

Honestly with the ubiquity of options trading and free broker transactions, I do wonder how much value the 3x leveraged ETFs still have. I guess I can see some scenarios where you'd still want to take it.

Sometimes you get the Robinhood traders asking if they can buy options on 3x leveraged ETFs, which is actually pointless

premarket we got down from the highs, approx:

SP500 down 11%

tech down 16%

value/divs down around 7%

60/40 down around 8%

still totally normal - even mild - for a correction. It has to feel relentless and endless before it ends.

SPUU, a 2x SP500 bull fund, was up 61% last year. Is that long enough a hold for it to make sense? Not sure what poster means by long-term hold.

Sold SARK too soon. My next limit sell order is $55. Considering changing it to $60.

agip wrote:

premarket we got down from the highs, approx:

SP500 down 11%

tech down 16%

value/divs down around 7%

60/40 down around 8%

still totally normal - even mild - for a correction. It has to feel relentless and endless before it ends.

We haven't seen these levels since *checks notes* September (or May for NASDAQ).

Always kinda interesting how it feels like such a major crash, but the past two years have been absolutely legendary. People definitely get spoiled

Four days in, I'm still in the red with SQQQ on my my idiot-genius scale, how long until I go full idiot again?

We are all guessing here, and I don't know any better than anyone else, but I think this drop has more room to run. Y'all are nearly through omicron (another few weeks to get past the worst of the hospitalizations and deaths), but there's a bigger storm brewing just beyond the horizon, and if it blows our way, this roller coaster might accelerate.

Fingers crossed for everyone I end up looking like the idiot I am again sometime soon... :-)

Market opens at 9:30 a little ahead and then immediately heads down.

Anyone know what the House has in store next?

investing noob wrote:

Sold SARK too soon. My next limit sell order is $55. Considering changing it to $60.

😂

Hey bud, put up or shut up. Like I said, talk to someone who ACTUALLY trades on margin. I have yet to consider your scenario, I’m not sure why I should devote to it any bandwidth.

Idiot, oooooohhhhhh,,,the cryptic drama! You referring to Ukraine, the Olympics, Keith Richards, rate hikes, or spring?

52 week low small caps

el flusho

TSLA down around 35% from highs

that's got to hurt

Maser wrote:Idiot, oooooohhhhhh,,,the cryptic drama! You referring to Ukraine, the Olympics, Keith Richards, rate hikes, or spring?

mas,

we all have access to the same news sources (or fake news, depending on your point of view), don't make me hold your hand...

Sorry, I couldn't resist. I know I'm being cryptic, but no more cryptic than 99 out of every 100 mas posts. :-D Feel free to reach out at the old gmail if you want a bit more.