Today's Market 2/21-27

Investing
84

It does not decay.

If QQQ goes up 1%, TQQQ goes up 3%
If QQQ goes down 1%, TQQQ goes down 3%.

The issue is here: You need to time it properly.

You have $100 on TQQQ, and

Hypothetically QQQ goes down 30%, TQQQ corrects 90% , i.e. your value goes down $100 to $10.
Now, next day, QQQ goes up 30%, TQQQ goes up 90%

By the end of 2nd day, TQQQ value is $19 while QQQ value is $91

TQQQ = 100 (1 - 90/100)(1 + 90/100) = $19 where as QQQ = 100 (1 - 30/100)(1 + 30/100) = $91

You need to buy TQQQ at market bottom and can hold TQQQ as long as market goes up.

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85

Reminds me of @hanera

86

If the market stays flat for years, TQQQ would perform worse than QQQ.

If the Nasdaq tanks like in 2000, TQQQ would go down so much, some question whether it would be able to avoid totally being shutdown (I have no idea if this is an exaggeration).

Outside of these 2 legitimate risks, buying on the dip could realize bigly gains.

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87

It will shutdown…see here how XIV etn shutdown 3 years before!

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88

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89

TQQQ tracks daily moves. It can deviate from long term moves in some unintuitive way.

For example, if QQQ goes up 1% one day, and down 1% the next, and do it 100 times. Basically have a flat year.

QQQ: (1.01 x 0.99)^100 = 0.99. You’ll lose 1%. (Because it takes more than 1% up to compensate the 1% down.)

TQQQ: (1.03 x 0.97)^100 = 0.91. You’ll lose 9%.

I think 3x funds should not be held for the long term. It’s best to restrict it for short term trading, something shorter than a year say.

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90

Paging perma bear @hanera. Your man Jimbo is turning bullish.

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91

Kindly explain the chart below. TQQQ vs NVDA over 10 years.

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92

Question is, can you hold TQQQ for that long time given the super high volatility? We can always cherry pick another time frame that shows TQQQ massively underperforms NVDA.

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93
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94

Cherry pick the time frame then. Your brain seems to use only a few concepts :wink:

You read a lot of articles and literature but you don’t verify with real data. You could get an A in exam and get a degree BUT not of doctoral quality :rofl:

Hold through high volatility? You have talked to the master who can, another one is @wuqijun. Check share price of AAPL from 1997 through now, and TSLA share price from IPO to now. Sufficiently high volatility? You can’t doesn’t mean people can’t. Projection is not a good logic.

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95

One cherry picked period:

Screen Shot 2021-02-23 at 5.19.24 PM
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96

Things like TQQQ defeats the purpose of investing and turns that into a gambling machine. Invest in good solid companies (no more than 3 imo) for the long haul is good enough. No need to do anything fancy.

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97

Another one. It’s so easy…

:rofl:

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98

Thought TQQQ is good only for 1 year? Appreciated less than NVDA but still pretty GOOD.

Btw, I have checked that already. I am here to prove to you your 1 year logic is :-1: You obviously didn’t follow the Indices & ETFs - #1768 by hanera thread

You have forgotten I didn’t work in USA (hence no ex-colleagues) and have no friends (except people in this forum). Can’t do what you can do. What I can do is to read charts. Always remember context :slight_smile:

99

Well you have so many contexts that you just pick and choose whatever is convenient to your point at the moment…

I seem to recall you said many times you should evaluate things in one complete bull-bear cycle? How do you think TQQQ will fare in your dot-com doomsday scenario? Would you hold to the bitter end like your beloved AAPL? Or rather just trade in and out like a trader?

100

ff
This is what we have been discussing in Indices & ETFs - #1768 by hanera

101

Let’s say we have 10 5% down days in a row in QQQ. As a doomsday dot-com scenario that’s very mild, right? Maybe unlikely but certainly far from impossible. Aren’t you saying we have a dot-bomb waiting to explode?

QQQ: 0.95^10 = 0.6. So you lost 40%. Feeling awful.

TQQQ: 0.85^10 = 0.2. You lost 80%. Since you like going all-in on one stock, depending on your mental state, losing 80% may lead you to put a bullet in your head.

102

Investing is for future growth. Everyone is looking today where to invest today and grow their wealth.

Today TQQQ closed $95.84. Please cherry pick a stock that can defeat TQQQ in 30 days or 90 days or 180 days or 360 days.

We can review at the end of the period. If we succeed this task, we are good stock pickers.

No need to do anything fancy. => It is not fancy, but just Mathematics. QQQ is weighted average of top 100 Nasdaq stocks (good solid companies). TQQQ is daily maintaining 3x of QQQ by using leveraged options.

This is not gambling but a way to grow your wealth by retail investor who does not even need to think about choosing individual companies.

103

Then why don’t you dump a million dollars into it and let it sit there for 5 years. Good luck.

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