Where is all the money going? On the sidelines waiting for the right time?
OT: Stock and Investment Thread
- Thread starter RU05
- Start date
FYI - just got this from the CNBC team. Sounds bullish for the supply chain and languishing Chinese companies:
China plans to pump $5.3 trillion into its economy this year to bolster growth, according to a Bloomberg report. That’s roughly one third of the country’s $17 trillion economy.
China plans to pump $5.3 trillion into its economy this year to bolster growth, according to a Bloomberg report. That’s roughly one third of the country’s $17 trillion economy.
It's a pickle for those scared out of the stock market. Bonds? No. Savings accounts? No. Real Estate? No. This money will end up back in the stock market sooner or later.
Have you back-tested the impacts of a sustained market downturn on leveraged ETF's and did you read FINRA's recent comments about access?
Yes, I have done all the math and reviewed data going back to the dot.com crash (for 2x and 3x ETFs). See my previous posts. Over the past several month, these ETFs have performed exactly as expected.
Under the mattress until the markets capitulate or treasury hit 4-5%. They are very anxious but patience. I hear there will be fireworks in June.
Helped the pre market but the market is fading away later in the day.
FYI - one of my posts from a few months ago, about the 3x ETFs. The 2x are obviously less risky:
I don't know the "correct" timing, but I know the "better" timing and rely on the historic principle that stuff goes up (in general). LOL! I also calculated a few scenarios to test the long hold theory using Morningstar's $10k return chart. If you bought at the absolute worst time over the past 10 years, here is what happened:
2/19/20 - $10,000
3/20/20 - $3,003 (so you lost 70% at bottom)
11/19/22 - $30,002 (so 3x at the ATH peak even if you bought at the worst time possible)
Held until today - you still would have about $15,000
I tested a few other extremely negative scenarios and it worked out fine. The only time that it didn't work out was during the full dot.com and 9/11 crash when the QQQ dumped 85%. That compression of the daily 3x was too strong to survive. You still would not have made your money back today if you bought literally at the dot.com zenith. That's the only scenario where this plan turned out to be a loser.
You probably know this already, but for others reading the post, the math is actually in your favor. Since it 3x's daily, you get a significant multiplier affect beyond just the 3x on the upswing. If the QQQ goes up 20% over 6 months, the TQQQ doesn't go up 60%, but actually much higher. On the flip side, since 0% is the mathematical floor, it works in reverse going down. So a 20% drop in QQQ is only about -50% or so for the TQQQ.
As I mentioned before, I am VERY comfortable with holding onto UPRO for the long haul. I am still thinking about TQQQ. As for SOXL, this is even more nuts that TQQQ. I have already experienced multiple +/- 15% days. I only own $5k of SOXL and may convert to the 2x version or perhaps short term play it.
Interesting stuff! I learned a lot over the past few months on these leveraged funds.
I recall you mentioning that SOXL was too volatile...even for you. I've DCA'd into UPRO and TQQQ - roughly even ATM...and trade USD.FYI - one of my posts from a few months ago, about the 3x ETFs. The 2x are obviously less risky:
I don't know the "correct" timing, but I know the "better" timing and rely on the historic principle that stuff goes up (in general). LOL! I also calculated a few scenarios to test the long hold theory using Morningstar's $10k return chart. If you bought at the absolute worst time over the past 10 years, here is what happened:
2/19/20 - $10,000
3/20/20 - $3,003 (so you lost 70% at bottom)
11/19/22 - $30,002 (so 3x at the ATH peak even if you bought at the worst time possible)
Held until today - you still would have about $15,000
I tested a few other extremely negative scenarios and it worked out fine. The only time that it didn't work out was during the full dot.com and 9/11 crash when the QQQ dumped 85%. That compression of the daily 3x was too strong to survive. You still would not have made your money back today if you bought literally at the dot.com zenith. That's the only scenario where this plan turned out to be a loser.
You probably know this already, but for others reading the post, the math is actually in your favor. Since it 3x's daily, you get a significant multiplier affect beyond just the 3x on the upswing. If the QQQ goes up 20% over 6 months, the TQQQ doesn't go up 60%, but actually much higher. On the flip side, since 0% is the mathematical floor, it works in reverse going down. So a 20% drop in QQQ is only about -50% or so for the TQQQ.
As I mentioned before, I am VERY comfortable with holding onto UPRO for the long haul. I am still thinking about TQQQ. As for SOXL, this is even more nuts that TQQQ. I have already experienced multiple +/- 15% days. I only own $5k of SOXL and may convert to the 2x version or perhaps short term play it.
Interesting stuff! I learned a lot over the past few months on these leveraged funds.
Overall market down, but TSLA down 6.8% today and approaching 50% off it’s high.
I am in TQQQ, UPRO, USD, and one of the small cap 2x'ers. I will probably upgrade my small cap play to URTY. There is a time and play for everything and during a bear market/correction, these ETFs could be valuable. We shall see!
Silly comment. Mismanagement was by screwing up their inventory and impacting profit. D'uh.
No. You backtracked. Perhaps you reassessed and reached the proper conclusion.
Think about these high-volume retailers who need products on their shelves. They were at a critical juncture facing a failing supply chain (domestic and abroad) and had to order based on projected shortages and lagging delivery dates. "Over ordering" was essential to ensure they had product and not empty shelves.
Over-supply results in inevitable discounting the sticker price. Not having product to sell, though, that's so much more costly. They made the best choice. Not mismanagement. Just survival mode.
Didn’t take long, I expected it to be down around 3:00.
brought 2 shares GOOG 2,170 and GTC 2@ AMZN 2,100. The average cost for AMZN 2,170 and GOOG 2,225. I sold half both a couple of days ago and now buying at lower cost. Will continue lowering my cost while I wait for significance movement in other stocks, Might buy TSLA
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Did the exact same thing, sold GOOG at 2264 a couple of days ago and bought back at 2188. Sold amzn the same day, but waiting for more weakness
Overall it’s safe at these level close to their bottom. GOOG PE IS NOW 19
GTC MSFT 10 shares 245 PE 25
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The concerning message from the reportings of Target, Walmart, Kohls was about the consumer, what they weren't doing. They're spending less, not buying big ticket items. The companies themselves will be just fine.
True, inflation is must-factorial. Don't think anyone can disagree with that, but how can one distinguish inflation from supply chain hiccups and war, versus an increase in the money supply (40% more money chasing finite goods) and just a changing world (going Green, re-shoring manf., stronger labor). All that stuff manifested at just about the same time. Although the war raised the price of energy, the world was already facing high inflation. Supply chain problems are a fact, but that doesn't account for wage inflation, unless we are talking about wage price spiral. Undisputed the gov't injected liquidity into the system over last two years, enlarging the money supply by 40% or so. That had to go somewhere, right?
Conceivable that inflation goes down this year, as supply chain issues resolve, but could easily still 4-5% CPI at the end of the year (which really be something like 8-10% at street level!), given long term trends (e.g, transition Green ect). Traditionally you have to raise rates to level of inflation to fight it. I'm not sure how this all will shake out.
Direction and magnitude of the next inflation reading will be telling, one way or the other.
Is there a site where I can see the historical PE of a stock for the last 5-10 years? I know years ago (30 or more) at the library I could look up Standard &Poor and see historical PE for several years. preferably free site or paid site or brokerage acct that access this info
TSLA is in a free fall today. Makes you wonder about the hedge fund guy begging for buy backs earlier in the week. TSLA was the retail traders only salvation and now it’s been pummeled. This morning a CNBC guy mentioned the Reddit crowd losing their minds. Time to invest in the company that makes Ramen noodles?
Rolex probably has a direct correlation with NFT. Prices on luxury watches got to a stupid level.
Sold it at 15 early May. No problem buying it back at 10.QS? Good lord, give it up!
Personally I only see oil prices and prices of oil-derivative product going up significantly over the next decade. There are an insane amount of green initiatives with 2030 as the target date in both the public and private sector.
By hook or by crook these goals will be met or there will be a rug pull by investors. Some of these goals are almost comically lofty but are sometimes the primary driver in investor sentiment. If the country starts to lag behind these goals I would expect a concerted effort to cutting off additional supply avenues to goose prices and decrease demand (demand destruction). You are already seeing this in the EU where carless weekends and legally mandated work from home are currently being debated.
This is going to hammer the transportation and consumer goods sectors. Then again, less travel and less consumption are very clearly stated goals for 2030 so this should come as no surprise.
By hook or by crook these goals will be met or there will be a rug pull by investors. Some of these goals are almost comically lofty but are sometimes the primary driver in investor sentiment. If the country starts to lag behind these goals I would expect a concerted effort to cutting off additional supply avenues to goose prices and decrease demand (demand destruction). You are already seeing this in the EU where carless weekends and legally mandated work from home are currently being debated.
This is going to hammer the transportation and consumer goods sectors. Then again, less travel and less consumption are very clearly stated goals for 2030 so this should come as no surprise.
Nope but I hope it has a trading range.Yeah, sold at 15 after losing a boatload.
They have no product.
This bear run is not done, plenty of downside left. When you have an administration as incompetent as this one it is going to get worse before it gets better. I have been on the sidelines since February and have made strategic trades here and there but most of my money is in the MM fund. Not ideal but beats being down double digits and I have saved myself hundreds of thousands in losses from the ATH’s. Buying opportunity’s are coming but we are not there yet.
I’ve got plenty of cash waiting to deploy. Would have even more if I didn’t get suckered back in March but I bought mostly financials so I’m not down that much. There is no short term catalyst here. The hodlers are crapping their pants on Reddit. What gets scary is when people start talking about suicide on Reddit. Hope that’s just hodler speak.
what’s your estimate for the bottom S&P ? 3,600 25% down , 3,400 29% down , 3200 33% down, 3,000 37.5% down, 2,800 down 42%, 2,600 48% or less.
I think 3,400 by June and between 3,000 and 2,800 for the bottom.
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^^^^^ King of the CLs.
If we get down to $3500, I am converting VOO to SSO. Gotta play the game to win!
Looking into the future is always fraught with being wrong. but I will take a stab based on the information we have today.
I would not be a bit surprised to see the NASDAQ down close to 40% from ATH's, S&P Down around 25 - 30% and Dow down 20 - 30%. then we will hover down there for a few months before recovery begins. I think we hit bottom sometime in late August - october period, then markets get a boost when the Republicans sweep the house and Senate. These are my guesstimates and things can change. We will see.
At 3,500, you should be 80-90% in the market, unless an old boot like you needs the money to live on.
Today felt like capitulation (at least short term). I bought 500 calls of SOXL. Strike price 21 and expiring 05/27 for $0.60. Also bought TQQQ calls expiring 05/27 with strike price 29 for $0.60. Already up big in both those. I am hoping for big up days early next week.