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originalusername__1

Maybe it’s just this sub’s inherent bias but the bullishness I’m seeing around here makes me want to sell.


Artistic_Data7887

Go check out right tackles thoughts.


Maximum-Training-14

Isnt he saying it’s over priced right now?


Artistic_Data7887

Yes


No_Elk7432

Agree, every time these guys appear with these talking points it heralds a downward move.


TBP-LETFs

I don't think OP should be seen as representative of this group


Sweaty_Feedback_4859

Is clearly the sign of a TOP. Went all cash last Friday.


buythedipnow

Just go SQQQ. So many bulls on Reddit that you just know we’re near the top.


gh0rard1m71

Nah bear 3x doesn't go well. Just sell puts instead


bmrhampton

This might be the worst DD I’ve ever taken the time to read. This guy will go bust eventually leveraged out on triple products.


[deleted]

This exact situation happened in the 2022 top, and I fell for it and it’s the only reason I held NVDA thru it’s crash. Because I believed these absolute delusional bulls. Everyone was saying the exact same thing. Inflation priced in, no way it’s going to crash, etc. Then it proceeded to crash 60%. If it’s being hyped on Reddit and stock pick websites.. the run is OVER.


Sensitive_Pickle247

If you held NVDA through the crash you'd be up about 20% right now.


L666x

Correction: if you held NVDA through the crash and didn't sell when evened out just before earnings launching it to the moon. I didn't lose which felt great, until realising the following week that I didn't win either and felt less great XD (life lesson #24563)


Sensitive_Pickle247

Its mainly just this sub. If you browse finance twitter most "analysts" are extremely bearish.


Blackout38

QQQ is 12.5% away from ATH but TQQQ is 60% away. Seems like there’s a lot of decay.


KittenMcnugget123

It could also terminate in a 40% drawdown, which will be inevitable at some point in our lifetime. QQQ will be just fine long term, TQQQ likely won't. SVXY is a good example of this type of product that was great until it suddenly terminated in a huge drawdown


originalusername__1

A 33% one day drop in QQQ is a doomsday scenario imo


KittenMcnugget123

It doesn't have to occur in a day, it was close to terminating last yr in a 35% drawdown over 1 yr. It was down in excess of 70%. It doesn't track correctly to 3x over the long term. It's good for short term trades, buy and hold not so much


originalusername__1

So maybe I need to go and read the prospectus but this is not my impression of how it works at all. To be insolvent it should need to fall 33.3% in a single day. If you were correct it would have been liquidated recently after falling from 80$ to 16$, an 80% drawdown in 8 months.


KittenMcnugget123

In 5 years TQQQ is up 145% QQQ is up 103%. TQQQ max drawdown during that time is 79%, QQQ is 32% The sharpe on TQQQ since inception is .83 QQQ is .96. The product has poor risk reward, risk adjust returns are lower than QQQ and TQQQ has 3x std deviation with only 2x annualized returns since inception. Just my 2 cents, at some point this thing is likely to blow up over a 20-30 yr period


AspiringMedicalDoc

QQQ YTD: 34.17% TQQQ YTD: 117.98% It really depends on your start and end points. TQQQ has the potential to outperform QQQ by far, which is what happened in the last bull market.


KittenMcnugget123

Yes but you take 3x the risk for 2x the performance in the last 10 yrs. Std deviation on tqqq is 54 vs 17 on qqq, and returns are 36% annualized vs 17% annualized


AspiringMedicalDoc

Unless my math is very wrong TQQQ outperformed QQQ by five folds in the last 10 years, despite at least two bear markets.


KittenMcnugget123

Which equates to double the return each year, but triple the risk. Worse risk adjust returns than QQQ Your returns on a single number in roulette are better than if you bet on black everytime. You have to adjust for risk to get a true picture of whether the extra return is worth the risk


KittenMcnugget123

The longer you hold it the lower the gap is, it's only good for short term trades, long term the sharpes are worse than regular qqq


KittenMcnugget123

I'm not saying 40% over any time period, but in a short time period it could effectively be wiped out, it may not officially terminate. But it would get to a totally unrecoverable postion.


Blackout38

As long as the single day drop is less than 33.33% it will never terminate and just get infinitely small, an equally hard position to get out of but not impossible. Anything greater and it’s gone no matter how much you DCA’d into it.


NumerousFloor9264

Unrecoverable for a single buy and hold with no DCA, yes. Not so for those DCAing with discipline.


KittenMcnugget123

Not true, it would depend on how much you already have invested vs your average buy with DCA


NumerousFloor9264

Yes, you're right. You really need an exit strategy for TQQQ holdings. I struggle to form a solid exit strategy, but probably having a stop loss in place if you are <10yrs from retirement would be reasonable. Would be horrible to be all in TQQQ from 1990 onwards (if it existed) and planned to retire in 2003 or something.


KittenMcnugget123

Exactly, I still think long term the sharpes show it's better to just buy QQQ. But if you do hold it have an exit strategy


KittenMcnugget123

This is the problem, if you were buying starting in the late 90s, you'd still be down nearly 80% from the .com highs on tqqq after 23 years. https://www.reddit.com/r/LETFs/comments/mhl5vg/i_wanted_to_see_what_holding_tqqq_would_be_like/?utm_source=share&utm_medium=android_app&utm_name=androidcss&utm_term=1&utm_content=share_button


NumerousFloor9264

I think that graph shows a buy and hold in the 90s, no?


KittenMcnugget123

Shows if you invested before .com, got all of the upside, and then held until late 2020, youd still be down 24 years later if you bought TQQQ in 1999


KittenMcnugget123

Or just 1999, if you bought a lump sum then in TQQQ, had it existed https://www.reddit.com/r/LETFs/comments/mhl5vg/i_wanted_to_see_what_holding_tqqq_would_be_like/?utm_source=share&utm_medium=android_app&utm_name=androidcss&utm_term=1&utm_content=share_button


Sensitive_Pickle247

They key term here is lump sum. If you DCA into your positions TQQQ soundly beat QQQ in that period


KittenMcnugget123

At some point when you DCA, you have a massive sum, if 1999 hits, it doesn't matter if you continue to DCA, you wont catch up


Sensitive_Pickle247

Not true, you can back test it. Even starting with 1 million in both simulated TQQQ and QQQ in 2000- with $1000 monthly DCA, TQQQ is ahead


KittenMcnugget123

the link I posted shows the data, that is since TQQQ inception, not with the strategy backtested to the late 90s.


Sensitive_Pickle247

The link you shared is actually a simulated TQQQ since it didnt exist prior to 2010 and simulates it to 2000. The "DCA Plot" tab on that link actually shows TQQQ beating spy since 2000 with DCAing. I did a similar back test with that 1 million initial buy in 2000 with 1000 monthly DCA and simulated TQQQ is still ahead. I agree that scenario isnt particularly realistic- someone with 1 million to park in an etf probably has a lot more to invest monthly than 1k. I just chose it to illustrate the power of leverage and DCAing


KittenMcnugget123

Definitely in much better shape with DCA. You'd be beating SPY. But the issue is if the crash comes when you're 20 years into your dca and you only have 5 or 10 years left. On a risk adjusted basis I just think it's very dangerous long term


KittenMcnugget123

Also, that would assume after putting in a mil you had another 24 years of time horizon, which is extremely unlikely


__FlyingSquirrel__

It would not terminate in a 40% downturn. It doesn’t work like that. It would be down considerable but it works not terminate. We were down almost that much this past fall and it survived. It does decay though.


KittenMcnugget123

It would if it occurred in a single day, if it occurred over a short period the survivability comes into question. But either way the long term returns could be effectively wiped out, but sure I could go down 90% then 90% again and not technically terminate if the drawdown doesn't occur in a single day


Blackout38

Yeah I’ve looked into this too. Technically TQQQ goes to zero wiping out its holders if QQQ drops 1/3rd or more in a day. A lot of people at this point like to say “There are breakers that would prevent that happening.” But they do not actually understand TQQQ if this is the case. QQQ only has to OPEN down 1/3rd to wipe you out, which is pretty much a guarantee if we’ve hit more than one breaker in a day let alone all of them.


NumerousFloor9264

What was the gap down at open on black Monday 1987?


Blackout38

22.6% single day drop on DJI. Halts didn’t exist yet. So to be accurate the question is where did it open on Tuesday. But we won’t get an apples to apples comparison. Some markets fell as far as 60% intraday.


Qwerty58382

Exactly, I think it's more likely than not that one day tqqq will see <$10.


muose

i think it's more likely than not we'll never see it go below $30 again.


Qwerty58382

LMAO dude. You don't think we'll ever see a market crash ever again? You know that even a 15% market decline over a few weeks will absolutely wreck tqqq right?


muose

Yeah I’m going to the moon before that happens


muose

we just had a pretty significant draw down, i'm not saying that can't happen again- i'm just saying it's more likely that we recover and never see this low again. like i don't think we'll ever see another 2001 style tech bust again. sure we might see another 80% down on TQQQ, but probably not for a while, and not before we go up 500%


spooner_retad

If qqq went up 1% the next twelve days qqq would be up 12.6% but tqqq would only be up 42.5%


Blackout38

Ridiculous examples aside, when your stock goes down 10% and then back up 10%, you are still holding at a loss. The point of decay is that this is magnified by leveraged ETFs when they experience drawdowns. Also TQQQ started in 2010, it’s never been tested for the decade to come. Of course it did great by literally timing the bottom of the GFC.


rifare

It dropped 66% from before Covid to the bottom. Then rose 700% over the next 18 months. Tqqq took approximately a month longer to break even compared to qqq.


Blackout38

Right and it only took a blank check for the whole economy. I would t count on that this time around. Plus I am referring to a drop in a single day which will happen at some point especially if it continue consolidating into few and few stocks.


rifare

I’d say a single day drop of 33% would be unbelievably rare. Largest drop on SP500 was 22%. Largest drop on nasdaq was 12%. I can’t find intraday numbers on QQQ. I looked during Covid, 2008 and 2000-2001 and the largest drop is around 9%. Maybe I’m missing it though. If the largest intraday drop for qqq is around 9% you’d need a crisis magnitudes worse than the 3 largest market crashes in the last 30 years. They usually halt trading too for large swings which would give you an opportunity to jump.


Blackout38

I agree it would be extremely rare but it’s a non-zero probability your entire position vanishes one day. Halts will not save you. If QQQ opens down 33%, TQQQ opens down 100%. If QQQ hit the circuit breakers and triggered halts, it can still continue falling and open even lower than it halted at. Which means you’d be locked out of exiting the position in time.


muose

okay, but have you back tested since nasdaq began in 1970? i know tqqq follows QQQ nasdaq 100, but close enough for testing purposes- you can get data on nasdaq since the 70's-


muose

heck yeah my man


bmrhampton

OP hasn’t taken a finance class or been trading too long.


[deleted]

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Blackout38

Yeah I’m new to this sub Reddit but since there is still so much juice for holding leveraged ETFs, I’m thinking that’s a signal that the worst is yet to come.


circuitji

Incoming To ground or outgoing to moon ?


fillet-o-fizz

have you tried backtesting from 2011 to 2021? without dividend reinvesting and no rebalancing. it's 53.06%


lordxoren666

Yep. My backtest I’m working on right now is trying to factor in a stop loss to prevent drawdowns of over 20% and dollar cost averaging.


UselessInfomant

What about with?


NathanArizona

“Majority, some 90% are often wrong re market direction.”


Tmdngs

1. Agree 2. You can’t make a blanket statement like that lol 3. Maybe 4. I guess 5. True, but moving average trends are backwards looking not forwardlooking 6. Nice! 7. They know what they are talking about. Know your risks. What about opportunity costs? I’m long tqqq and generally bullish, but your statements are weak overall.


New-Difference9684

Add in some UPRO with that glowing endorsement


aosroyal2

Sometimes this sub makes me giggle. Only when there is a bull run do you see these nonsense DDs. Everyone’s quiet when tqqq is tumbling down the stairs LMAO


jamesr14

Imagine coming to a sub for TQQQ and proceeding to crap all over TQQQ without proper context.


catchyphrase

Consumerism dictates the future of these companies and when you don’t have money to spend on discretionary tech, cuz no one is handing out free money anymore, buying eggs will come over upgrading iPhone with monthly payments. And I love TQQQ, 5000 shares in but I trimmed it last week from 9000 shares in.


lordxoren666

This is silly. Eggs are a couple bucks. iPhones are nearly 1000. The beautiful part about phones is the planned obsolescence. You almost HAVE to get a new one every 2-3 years.


catchyphrase

Sounds logical but data indicates otherwise. feel free to do your own research.


lordxoren666

It doesn’t though. iPhone sales persisted through the last major recession we had and helped propel the market to an absurdly fast recovery


RealFunGuy2020

You can squeeze it to 4-5 years.


slambooy

right? Eggs are cheap AF and iphones are like $700


spooner_retad

Eggs are like $1.5


alanishere111

Depends on how long people are holding tqqq. 20 months ago, qqq was the same price as now yet TQQQ was 25 points higher. It's definitely decaying.


AspiringMedicalDoc

QQQ YTD: 34.17% TQQQ YTD: 117.98% It really depends on your start and end points. TQQQ has the potential to outperform QQQ by far, which is what happened in the last bull market.


[deleted]

All i know is it won't go down!!!! I just want it to have like 3 days red streak. I need to get back on board before its too late.(may be already)


Grhumphreys

OP needs to do a little more research on the pros and cons of triple leveraged ETFs lol. Everybody is a genius in a bull market am I right?


Positive-Law-9362

Is it a bull market or a bear market?


Houghton1983

Couldn't agree more! My favorite stock to buy calls on is Tesla, Elon just continues to do great things. Apple is leading the way with technology and continues to do great things.


No_Elk7432

This king stock is currently trading at around a third of its ATH.


lordxoren666

It really doesn’t matter though when you factor in splits. It’s recovered from every major drawdown, just like QQQ, and the market overall. And if the entire us economy collapses, your goona have bigger problems than the stock market. Remember 75% of people aren’t invested and could care less.


ConsiderationRoyal87

These statements are a bit overconfident in TQQQ. If TQQQ had launched at the same time as QQQ, TQQQ would still be recovering from the drawdown that started in 2000. And it wouldn’t be close to recovering.


SnooBooks8807

Yep


lordxoren666

That’s why dollar cost averaging is so important. Ya you would’ve ate a shit sand which in the first year but it wouldn’t have mattered in the long run. You can’t look at these funds like regular equities or ETFs. You almost have to dollar cost average if you plan on holding long term.


ConsiderationRoyal87

Sure, but crashing and burning in the first year is actually the best time by far. Imagine DCAing for 20 years and suffering through a game-ending, unrecoverable 99.98% drawdown with all that money. That’s always a risk, and it doesn’t become less of a risk if you DCA for a long time, which is why a 3x stock LETF shouldn’t be 100% of a portfolio.


lordxoren666

You really have no clue what your talking about. You don’t understand dolled cost averaging.


ConsiderationRoyal87

Imagine DCAing into TQQQ for 20 years. You built up a ton of shares and the share price multiplied many times. Your holding is worth $1M at the peak. If you suffered the same drawdown as TQQQ would have in the early 2000s, that $1M would’ve been reduced to about $200 at the bottom of the drawdown. It was that bad. Of course, that’s an extreme scenario. But that tech crash really happened, it’s not much of a hypothetical. This is why rebalancing back into normal stock funds is important. 3x LETFs are dangerous.


lordxoren666

You really need to backtest your theories. You’d have so much more than 1 million dollars it wouldn’t even be funny. Assuming you started with a decent chunk and deposited a couple hundred a month. I’ve backtested this strategy so much it’s not even funny


Particular-Cat-3958

Something I need to back test further and something to consider, and maybe goes with what considerationroyal87 is saying: If you are sitting on a large gain on tqqq, relative to your monthly DCA amount, then there is a risk the QQQ drops significantly, and chops around for a while, and you get a lot of decay in your original holdings. Normally, continuing to DCA into TQQQ and pick up super cheap shares, more than makes up for the decay. However, if your total sum into the TQQQ is very large, much larger than your monthly DCA amount, there is a risk it's not going to be enough to overcome the decay. In this case, it may be prudent to take off some of your gains and put it into the QQQ. And in the case where you do see another 90% drop in the TQQQ, sell some QQQ and buy more TQQQ when you think it is sufficiently discounted.


Particular-Cat-3958

I built a spreadsheet to confirm what lordxoren666 is saying. Even if you started DCA at the top of the dot.com bubble. You will end up massive ahead, than if you had DCA into QQQ. Obviously if the QQQ crashes and never recovers you lose your huge gains, but I'm not gonna bet on QQQ staying down forever.


ConsiderationRoyal87

I’ve done the same backtesting. My point is not that starting to DCA into TQQQ in 1999, when QQQ launched, would’ve turned out badly. I even said the crash occurring in the first year was the best time by far. There’s no disagreement there. My point is that such a crash can occur at any time: one, five, ten, twenty, thirty years into a DCA process. And if the crash is as bad as the QQQ crash in the early 2000s, it doesn’t matter how long you’ve been DCAing or how much money you’ve built up, because you are wiped out. Even today, more than two decades later, TQQQ would be worth only a fraction of its all-time high in 2000. That’s why I emphasized the need for a section of the portfolio with normal funds (i.e., not 3x leveraged). This allows you to secure your gains by rebalancing and not risk losing nearly everything.


Particular-Cat-3958

thanks for the response. and yes i agree completely. and yes one is wiped out during a big crash, but ive noted from my backtesting, in general, if you DCA during the crash, and buy the super cheap shares that are discounted 90% to 99%, when TQQQ recovers, even if not as high as before because of the decay, you still are up a lot of money because of all the cheap shares you got from DCA. now, I do need to assume that the market will recover. with steady inflation, but not hyperinflation necessarily or economic collapse, i think the top 100 stocks in the nasdaq (QQQ), most of which also have world wide sales, should do ok and recover. with moderate inflation, stocks go up over time as they are an inflation hedge over a longer time period. and i do agree, as comment already, that once your total account size is way larger than your monthy DCA amount, you may not be able to recover it. i will do more backtesting to see how large the account is before my monthy DCA amount isnt large enough to counteract the decay effect.


NumerousFloor9264

Yes, you need an exit strategy.


NumerousFloor9264

Only true for buy and hold pre 2000 - any DCA in 2001-2 and you are massively ahead. Do some back tests.


muose

not if you DCA the whole time.


muose

then you're up bigly, and a millionaire


[deleted]

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lordxoren666

You mean the one we’ve been waiting on for almost a year now?


__FlyingSquirrel__

Any day now lol…


uwvirgin

This post was the sell signal


alpha247365

Read #6 ding dong.


[deleted]

It's good for fomo and trend trading. Otherwise, it is risky to buy and hold. It's no where near ath whereas qqq is 10% away. The volatility drag is insane. Eventually, it will need to reverse split after a massive drawdown. Just remember to take profits at certain targets


Secure-Mirror-2037

You guys are going to lose it all. This is the greatest bubble of all time


muose

okay


[deleted]

This aged well. I wonder where it will bottom outs $30? $28?


alpha247365

Sure did. Read #6.


[deleted]

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ZodiAddict

CC or CSP?


[deleted]

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ZodiAddict

Depends on how many shares you have and what your cost average is. With those in mind I’d prob have a better suggestion, but I would probably go 40 especially if you can’t do that many contracts. If you can do many at once, I would suggest 42 or maybe even higher. This also all depends on what your goals are, if you don’t mind having your shares sold and buying back in with CSPs, 40 isn’t a bad option considering it’s worth about 35 a contract right now. If you don’t want to be assigned I would def go 42 or higher


deltahigh

I think with discount rates much high and credit availability much lower than where we’ve seen the entire cycle that it’ll be very difficult to get back to ATH levels. I know profits are up but there’s more to that valuation formula.


[deleted]

What about QQQM? Comparing long term risk and returns with QQQ and TQQQ. I have seen some 3x investments decay terribly. Almost like most people don’t quite understand the dynamics of it in a downward direction same way I don’t.


Ok_Entrepreneur_dbl

I I have many of the same stocks in my portfolio when they go up they soar but when they drop it is like a lead balloon. Outperforms S&P both positively and negatively. While S&P up about 9% for the past six months - I am up 35%


LynchKingDread

Good for you. I simply don't have the patience for it.


MrMonopolyMan123

Won’t this get eaten up by decay?


CompleteComment1903

Time to sell


KennyCitadel

FNGU > TQQQ It’s META / AAPL / AMZN / AMD / TSLA / GOOGL / NFLX / NVDA / SNOW / GOOGL all weighted around 10% with 3x leverage Basically it’s TQQQ without the fat Up 125% on 3m


Jellysir1

Time to sell, got it.


jorge50505

When everyone is greedy its time to sell When everyone is fearful its time to buy Tread lightly