Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Triple leveraged drawdown selling rule
#21
Happy Easter!

Yeah I think having a quick hook is essential to owning triples. Don't pull a Grady Little. I just realized Pedro's 8th inning meltdown in 2003 is the equivalent of a triple having a drawdown. The Sox have ZERO offense so far this year. Ugh. Um ... investing right, not baseball. Where was I?

Oh yeah! So I went through the triples list and sorted them into two buckets: those safe for a taxable account, and those that should only be in the ROTH. Safe for a taxable account means infrequent drawdowns, and even if you miss a drawdown, the price comes back in a few months. ROTH only either means more frequent drawdowns, or that when a drawdown does occur, it never comes back to where it was. DFEN is a great example of the latter. It was merrily going along for several years, then bam March 2020 happens, and it has never come close to where the price has been yet.

Taxable: CURE, FAS, HIBL, SOXL, SPXL, TECL, TQQQ, UPRO, WANT, WEBL
ROTH: DFEN, DPST, DRN, DUSL, LABU, MIDU, NAIL, PILL, RETL, TNA, TPOR, UTSL

Also I computed which one would have been the best to buy on that fateful day of March 15th, 2020, and the answer is surprisingly RETL, which is x20 over that period. SOXL, by contrast, is only x9.96, but that actually makes sense because it didn't quite lose all its value in that drawdown. For the record, I put my bonus into SOXL, TECL, and VOO that day.
Reply
#22
(04-04-2021, 07:34 AM)ken-do-nim Wrote: Happy Easter!

Yeah I think having a quick hook is essential to owning triples.  Don't pull a Grady Little.  I just realized Pedro's 8th inning meltdown in 2003 is the equivalent of a triple having a drawdown.  The Sox have ZERO offense so far this year.  Ugh.  Um ... investing right, not baseball.  Where was I?

Oh yeah!  So I went through the triples list and sorted them into two buckets: those safe for a taxable account, and those that should only be in the ROTH.  Safe for a taxable account means infrequent drawdowns, and even if you miss a drawdown, the price comes back in a few months.  ROTH only either means more frequent drawdowns, or that when a drawdown does occur, it never comes back to where it was.  DFEN is a great example of the latter.  It was merrily going along for several years, then bam March 2020 happens, and it has never come close to where the price has been yet.

Taxable: CURE, FAS, HIBL, SOXL, SPXL, TECL, TQQQ, UPRO, WANT, WEBL
ROTH: DFEN, DPST, DRN, DUSL, LABU, MIDU, NAIL, PILL, RETL, TNA, TPOR, UTSL

Also I computed which one would have been the best to buy on that fateful day of March 15th, 2020, and the answer is surprisingly RETL, which is x20 over that period.  SOXL, by contrast, is only x9.96, but that actually makes sense because it didn't quite lose all its value in that drawdown.  For the record, I put my bonus into SOXL, TECL, and VOO that day.
First of all my Minnesota Twins blew their first 9th inning lead during game #1.  At least we got that heartbreak out of the way.  We need to fire up the baseball thread while everybody's team is still alive.

The V-bottom hyper bounce of 2020 was legendary.  The next one is statistically likely to be a little more like the GFC or maybe the tech bubble.  A little harder to pick the bottom as opposed to a dead cat bounce.  Hopefully that's a few years in the future.  I got the GFC right.  You only need to get the last one right during your accumulation phase to not get hurt too bad.
Reply
#23
Congrats on getting GFC right! I did ... decent. I could have done better. I watched my funds shrink for most of 2007. When Lehman Brothers went out of business, I went 100% into cash that day, and stayed there until the market started bouncing back in 2008 and got back in pretty close to the bottom.

With covid ending, I'm predicting a marvelous year ahead of us. But you are right sooner or later a real downturn will hit, and ideally I head into cash sooner than last time.
Reply
#24
Every peak and crash is different. It's apparent the new administration with full control will not be stopped from juicing the economy until the game blows up, whatever year it happens. We aren't even close to tech bubble valuations but that is the direction. Value stocks ran this time so I don't even know where to hide when I decide I should. The economy is surely going to rock soon but that is mostly baked in many months ago with industrials tripling before the economy even recovers. This is never easy to figure out. I'll continue to lean defensive stocks and try to sort it out as we go.
Reply
#25
BMY, Teva, mrk, cvs, wba, glexo, cah are few still undervalued. I think I own a few other names as well.

Lmt, noc, hii, GD were all deals a month back. Still cheap comparatively but not on sale.
Reply
#26
Sold ABBV, TEVA, BMY puts.
Reply
#27
(04-06-2021, 12:48 PM)vbin Wrote: Sold ABBV, TEVA, BMY puts.

You know that scene in Raiders of the Lost Ark, "They're digging in the wrong place."  That's what this reminded me of  Tongue
Reply
#28
Good article on owning triples and the trailing stop percentage which I didn't even know existed! https://seekingalpha.com/article/4059820...rofit-from
Reply
#29
He may never see this post unless you tell him. I will point out those are pretty decent trades though. Not his fault you don't know how to sell puts. J/K Smile
Reply
#30
Yeah, well right now I'm learning about trailing stop % and trailing stop prices so one day at a time Smile Trailing stop price is exactly what I was looking for, and answers the "what if I go on vacation" question nicely. Instead of just tracking the sell-if-it-falls price in a spreadsheet, I will enter these trailing stop price sales, and Etrade will do this for me automatically.
Reply




Users browsing this thread: 1 Guest(s)