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Link Posted: 3/27/2015 10:30:46 AM EDT
[#1]
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Quoted:

Give us a specific inverse ETF that you are recommending.  If you can.  
 
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hold a position in cash (money market etc) unitl the market drop a good deal, maybe 20% then buy back in.  One coudl wait for a 30-50% drop but that would be greedy,  maybe it won't go down that much and you might miss the oportunity to buy back in when things are echeap.  Maybe you buy back in and you "cath a falling knife" and the market tubmles down to half way from its peak, but it will come back eventually and having bought back in after  a 20% drop, you are in a much better position long term than if you ate the 20% drop from the peak.
Link Posted: 3/27/2015 10:35:10 AM EDT
[#2]
never underestimate bull markets, bubbles and now the power of the fed which is new to the equation.  If you're short now you might be a damn fool.  DOW at 20,000+ isn't out of the question, the big question is how long can it go on for? 1, 5, 10 years? The fed will step in at every chance and give confidence back to the market and shorts will continue to get burnt.
Link Posted: 3/27/2015 10:54:10 AM EDT
[#3]
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Quoted:
Inverse ETFs are a remarkably "safe" way to short the market.  Much better than actually shorting or buying a put option (which only lasts a limited time frame).

Even if you only put $5000 in one, you could gain up to 10x that amount on a large crash.

Then flip around and put it in at the bottom and it grows more.

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Look at the chart on SDS back in 08.  a small investment could have been worth a fortune if timed right.
Link Posted: 3/27/2015 10:57:19 AM EDT
[#4]
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Quoted:

Look at the chart on SDS back in 08.  a small investment could have been worth a fortune if timed right.
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Quoted:
Inverse ETFs are a remarkably "safe" way to short the market.  Much better than actually shorting or buying a put option (which only lasts a limited time frame).

Even if you only put $5000 in one, you could gain up to 10x that amount on a large crash.

Then flip around and put it in at the bottom and it grows more.


Look at the chart on SDS back in 08.  a small investment could have been worth a fortune if timed right.


Yeah, good luck with that.  There's a reason people advocate things like dollar cost averaging.
Link Posted: 3/27/2015 11:26:15 AM EDT
[#5]
Link Posted: 3/27/2015 12:00:30 PM EDT
[#6]
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Quoted:
Does anyone here buy insurance?  Why would you bet that your house is going to burn down or that you will get cancer?

Or carry a gun?  You looking to get into a gun fight?
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I don't need insurance on my portfolio. I've got time on my side. A big drop just puts everything on sale before it rebounds again.  Your "insurance policy" is just a gamble more likely than not to lose money.
Link Posted: 3/27/2015 12:18:09 PM EDT
[#7]
Link Posted: 3/27/2015 12:19:07 PM EDT
[#8]
If you keep casting a fishing line out your bound to catch something eventually.
Link Posted: 3/27/2015 4:45:49 PM EDT
[#9]

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Quoted:
what you said is like saying the market has done the best ever under Obama while ignoring the fact that he got in at the bottom.



Before ending 2008 down 10%, RWM nearly doubled which corresponds with the inverse of Russell 2000  at the end of 2008.



These aren't long-term investments like tulips or gold.  They are hedges.
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Quoted:




Quoted:



Someone already mentioned an example earlier: TZA.



TZA
tracks the Russell 2000 and aims to match the 3x the opposite of it
daily.  If you wanted less risk but still wanted to track the small
caps, you could use RWM which is a 1x inverse ETF.



I'm not going to tell you which one (or more) to pick.  Look at a few. See how they did in 2008.  Look at which sectors might be hit hardest, and pick one (or more).





Quoted:

I looked up the performance of the two recommended in your post, to see how they did in 2008:

- TZA - Didn't start until November 2008

- RWM - Down ~10% in 2008



Any more Inverse ETF recommendations?  

 
what you said is like saying the market has done the best ever under Obama while ignoring the fact that he got in at the bottom.



Before ending 2008 down 10%, RWM nearly doubled which corresponds with the inverse of Russell 2000  at the end of 2008.



These aren't long-term investments like tulips or gold.  They are hedges.


No, I'm proving that your advice is wrong.  

You're suggesting that we buy TZA and RWM, and to "see how they did in 2008".  TZA and RWM were either nonexistent or down in 2008.

Link Posted: 3/27/2015 6:16:54 PM EDT
[#10]
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Quoted:


this is true.  i have a buddy trying to be self subsistent.  he still has a job, but him and his wife have zero life, constantly scrambling to pull weeds and water the rabbits/chickens etc.  

They are learning a lot and all, and its their life to live, its just a hard grueling life.  Its not so bad if you just really gradually ease into it and set things up to be low maintenance and automated as possible to reduce the need for daily labor (ie refilling water bottles daily etc).  But they just dove headlong into it and locked themselves into an inescable cycle of massive daily chores
.
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For the reasons Adam Smith didn't like it.  Specialization is how economies work.  Unless you're already rich and don't need to work, the amount of time and energy you have to put into becoming self-sufficient is going to reduce your standard of living.  


this is true.  i have a buddy trying to be self subsistent.  he still has a job, but him and his wife have zero life, constantly scrambling to pull weeds and water the rabbits/chickens etc.  

They are learning a lot and all, and its their life to live, its just a hard grueling life.  Its not so bad if you just really gradually ease into it and set things up to be low maintenance and automated as possible to reduce the need for daily labor (ie refilling water bottles daily etc).  But they just dove headlong into it and locked themselves into an inescable cycle of massive daily chores
.


Any new skill has a steep learning curve.  No big surprise there.  If there is one thing we've learned as gun owners it's what happens during a panic.  Supply evaporates.  Partial self-sufficiency is a hedge against that.




Posted Via AR15.Com Mobile
Link Posted: 3/28/2015 12:32:21 AM EDT
[#11]
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Quoted:

hold a position in cash (money market etc) unitl the market drop a good deal, maybe 20% then buy back in.  One coudl wait for a 30-50% drop but that would be greedy,  maybe it won't go down that much and you might miss the oportunity to buy back in when things are echeap.  Maybe you buy back in and you "cath a falling knife" and the market tubmles down to half way from its peak, but it will come back eventually and having bought back in after  a 20% drop, you are in a much better position long term than if you ate the 20% drop from the peak.
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Quoted:
Quoted:

Give us a specific inverse ETF that you are recommending.  If you can.  
 

hold a position in cash (money market etc) unitl the market drop a good deal, maybe 20% then buy back in.  One coudl wait for a 30-50% drop but that would be greedy,  maybe it won't go down that much and you might miss the oportunity to buy back in when things are echeap.  Maybe you buy back in and you "cath a falling knife" and the market tubmles down to half way from its peak, but it will come back eventually and having bought back in after  a 20% drop, you are in a much better position long term than if you ate the 20% drop from the peak.


People have been saying this since 2009.

Waiting for significant dips as an overall investing strategy does not work.
Link Posted: 3/28/2015 12:43:29 AM EDT
[#12]
Op if you believe it put your money where your mouth is... Put most of or everything you have on shorts, puts, and other assets that will do well if the market tanks.

Then and only then will you have the gravitas to say I told you so.  Just as that one member made millions on but coins so can you prove to everyone that you are right.

Link Posted: 3/28/2015 12:46:18 AM EDT
[#13]
Link Posted: 3/28/2015 12:46:55 AM EDT
[#14]
Link Posted: 3/28/2015 12:48:01 AM EDT
[#15]
it will come down sooner or later, we will see
Link Posted: 3/28/2015 1:11:31 AM EDT
[#16]
I'm going to say in the next 90 days.
Link Posted: 3/28/2015 6:58:48 PM EDT
[#17]
Link Posted: 3/28/2015 7:05:51 PM EDT
[#18]
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Quoted:

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Quoted:
Quoted:
Op if you believe it put your money where your mouth is... Put most of or everything you have on shorts, puts, and other assets that will do well if the market tanks.

Then and only then will you have the gravitas to say I told you so.  Just as that one member made millions on but coins so can you prove to everyone that you are right.




If it's a sure thing...
Link Posted: 3/30/2015 7:08:57 PM EDT
[#19]
Link Posted: 3/30/2015 7:09:55 PM EDT
[#20]
Link Posted: 3/30/2015 7:13:29 PM EDT
[#21]
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Quoted:
Everyones beens saying that at the end of 2009, 2010, 2011, 2012, 2013, 2014. Feds wont allow a drop. they'll keep interest rates low.
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They won't allow a drop until asset values have reached hysterical levels and then they'll be unable to stop a drop.

Instead of having small corrections, we have major catastrophes.  Same story as 2000 and 2008.  Surely this time they'll get it right.  
Link Posted: 3/30/2015 7:32:18 PM EDT
[#22]
Won't happen. The market is completely controlled now.
Link Posted: 3/30/2015 7:43:20 PM EDT
[#23]
Ducky, they just don't get it.

If they examined Shiller's historical CAPE they'd see prices today are in the highest 5%.
Link Posted: 3/30/2015 7:52:46 PM EDT
[#24]
I don't see anything but a bunch of charts with random data points and lines that could mean anything.  Sift enough data and you'll find what you want to find.  I predict doom because of so much imaginary funny money being bet on other imaginary funny money.  Even the Wikipedia articles make my head hurt.  
Link Posted: 3/30/2015 9:33:53 PM EDT
[#25]
Link Posted: 3/30/2015 9:39:53 PM EDT
[#26]
Each political party gives the next a major recession.  Carter to Reagan, Reagan/Bush to Clinton, Clinton to Bush, Bush to Obama.  Obama will do the same.

Crash?  Who knows.  Ask yourself what meaningful has changed since the "Great Recession".
Link Posted: 3/31/2015 12:25:52 PM EDT
[#28]
Some CAPE (Cyclically Adjusted P/E) History:

1950-2014
654 rolling 10-year periods

Average 10yr annualized return: 10.31%
Average 10yr annualized return for periods which started with a CAPE of over 25:  3.69%
Number of 10yr periods which started with a CAPE of 25 or higher: 87  (No kidding. 80-freakin-7)
Number of 10yr periods starting with a CAPE of 25 or higher that achieved a 10% or greater return: NONE



The median P/E for US stocks is now at the highest level on record.
Link Posted: 3/31/2015 7:11:48 PM EDT
[#29]
Link Posted: 4/1/2015 12:36:47 PM EDT
[#30]
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Quoted:
Nice, where did you find that write-up?  I can find articles that talk about 3-yr averages, but not 10.
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Not published. I pulled it from in-house research.
You could easily replicate it though.
You can grab the CAPE monthly numbers  here
And match them up to a total-return market index (i.e., SP500 TR vs SP500) in excel. Then calculate your rolling period returns.

Sorry. That's as far as the rules let me go.
Link Posted: 4/1/2015 12:43:39 PM EDT
[#31]

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Quoted:
If you bought some "insurance" in RWM in 2007, you would have bought between $65 and $75.  Then if you sold when RSI of RWM first went below 70 (after first going above) in the week of 10/20/2008, you would have sold for between $110 and $90.



(I would have bought week of 7/2/2007 based on when monthly macd goes negative which would have been for $65)



Anywhere from 20% to 70% is better than 0% or negative when it happens.



RUT lost 60% of its value from the high in 2007 to the low in 2008.



Then, if on that date you just flipped and went long in IWM (russell 2000 long 1x etf), you would have bought in for $45 to $55. which is now at $120 for a gain of %118 to %167.



Using that strategy, $100 becomes from $262 to $321 if I calculated correctly.  This is 162% to 221% gain.



The increase in RUT from the low in 2007 to now is only 72% total.



Granted, I haven't extensively backtested this for all possible large crashes in the past. Many inverse and leveraged ETFs are relatively new. But backtesting would still be possible to estimate just by using the daily gains from the indexes.
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Quoted:



Quoted:


Quoted:

...

what you said is like saying the market has done the best ever under Obama while ignoring the fact that he got in at the bottom.



Before ending 2008 down 10%, RWM nearly doubled which corresponds with the inverse of Russell 2000  at the end of 2008.



These aren't long-term investments like tulips or gold.  They are hedges.


No, I'm proving that your advice is wrong.  

You're suggesting that we buy TZA and RWM, and to "see how they did in 2008".  TZA and RWM were either nonexistent or down in 2008.





If you bought some "insurance" in RWM in 2007, you would have bought between $65 and $75.  Then if you sold when RSI of RWM first went below 70 (after first going above) in the week of 10/20/2008, you would have sold for between $110 and $90.



(I would have bought week of 7/2/2007 based on when monthly macd goes negative which would have been for $65)



Anywhere from 20% to 70% is better than 0% or negative when it happens.



RUT lost 60% of its value from the high in 2007 to the low in 2008.



Then, if on that date you just flipped and went long in IWM (russell 2000 long 1x etf), you would have bought in for $45 to $55. which is now at $120 for a gain of %118 to %167.



Using that strategy, $100 becomes from $262 to $321 if I calculated correctly.  This is 162% to 221% gain.



The increase in RUT from the low in 2007 to now is only 72% total.



Granted, I haven't extensively backtested this for all possible large crashes in the past. Many inverse and leveraged ETFs are relatively new. But backtesting would still be possible to estimate just by using the daily gains from the indexes.


So why didn't you buy it on 7/2/2007?  



We'll see how your recommendation (in March 2015) to buy TZA and RWM turns out later this year.  

Link Posted: 4/1/2015 12:55:42 PM EDT
[#32]
I predict that Adam And Eve will eventually screw up big time.....
Link Posted: 4/1/2015 1:34:04 PM EDT
[#33]
Link Posted: 4/2/2015 2:55:32 PM EDT
[#34]
Link Posted: 4/2/2015 7:28:13 PM EDT
[#35]
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Why?
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I'm going to say in the next 90 days.


Why?


because the Market Timer's Hall of Fame is one big empty room.

ar-jedi
Link Posted: 4/2/2015 9:03:37 PM EDT
[#36]
Link Posted: 4/2/2015 10:14:23 PM EDT
[#37]
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Quoted:


Ever heard of Jesse Livermore?
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Quoted:
Quoted:
Quoted:
I'm going to say in the next 90 days.


Why?


because the Market Timer's Hall of Fame is one big empty room.

ar-jedi


Ever heard of Jesse Livermore?


yes, he lived in an age when the information related to the finances of corporations was known to a select few at Morgan, Paine Webber, and so on.
now, it's a different story -- that same information is easily available and can be analyzed in seconds with three mouse clicks.

anyway, he shot himself in the head and died broke.

ar-jedi

Link Posted: 4/2/2015 11:24:43 PM EDT
[#38]
Link Posted: 4/4/2015 6:25:10 PM EDT
[#39]
Link Posted: 4/4/2015 7:14:53 PM EDT
[#40]
I said if Obama hadn't killed it by 2013, it will probably keep going as long as he's in. We are in new territory. The Fed seems to be able to only print money. Now that the rates have been so low, so long, if they even talk of raising rates, it causes panic. We are doubling our national debt now at he rate of every 8 years. This can't last forever. It's a when question, not if. The crash or slow burn isn't what is so scary as what the Feds will do to fix it. Since they refuse to go back to a value/market based system.

Prepare for the worst, hope for the best.
Link Posted: 4/4/2015 10:29:26 PM EDT
[#41]
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What's the criteria to define ups and downs in a geopolitical cycle?  It looks like it was created to fit the data.
Link Posted: 4/4/2015 10:36:54 PM EDT
[#42]
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Quoted:


What's the criteria to define ups and downs in a geopolitical cycle?  It looks like it was created to fit the data.
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What's the criteria to define ups and downs in a geopolitical cycle?  It looks like it was created to fit the data.


you_dont_say.JPG



ar-jedi

Link Posted: 4/4/2015 10:42:38 PM EDT
[#43]
Won't happen; mark my words.  But great fodder for speculation, as always.
Link Posted: 4/4/2015 10:54:39 PM EDT
[#44]
Link Posted: 4/4/2015 10:56:04 PM EDT
[#45]
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Quoted:
Quoted:
Quoted:


What's the criteria to define ups and downs in a geopolitical cycle?  It looks like it was created to fit the data.


you_dont_say.JPG



ar-jedi



en.m.wikipedia.org/wiki/Laws_of_science


Unless you're making a joke, then no.
Link Posted: 4/4/2015 10:58:45 PM EDT
[#46]
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Quoted:
Quoted:


What's the criteria to define ups and downs in a geopolitical cycle?  It looks like it was created to fit the data.


you_dont_say.JPG



ar-jedi


en.m.wikipedia.org/wiki/Laws_of_science


i did not realize that equity markets were behaviorally deterministic; i had thought they were stochastic.  my bad.

i'll save some clicking:

https://en.wikipedia.org/wiki/Deterministic_system
https://en.wikipedia.org/wiki/Stochastic

ar-jedi

Link Posted: 4/5/2015 12:59:16 AM EDT
[#47]
Link Posted: 4/7/2015 7:39:52 PM EDT
[#49]
Link Posted: 4/7/2015 7:49:27 PM EDT
[#50]
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Quoted:



Can you explain this in modern public school english please
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Quoted:
Inverse ETFs are a remarkably "safe" way to short the market.  Much better than actually shorting or buying a put option (which only lasts a limited time frame).

Even if you only put $5000 in one, you could gain up to 10x that amount on a large crash.

Then flip around and put it in at the bottom and it grows more.




Can you explain this in modern public school english please



An ETF can only go down to zero, so you can only lose what you invest.

If you short a stock, it can go up to 87 trillion, so you can lose an infinite amount.

If you buy an option, it can expire.  So you still only lose what you paid for it, but you have to get your timing right to make money.
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