What's your strategy for 2022?

That’s how every crash started, it’s always the same.

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I head someone on YouTube saying that value stocks are making a comeback and money could flow into them from growth stocks. I understand very little about growth/value etc, but I wonder if you guys think that YouTuber had a good point or not.

'Murica has a huge plan to “rebuild”, that includes a lot of construction, highways, manufacturing critical stuff (like the Semiconductor Foundry of Intel), energy networks (utilities), transportation.

These things have been in the “value” business so far (except chip makers), so they might overperform, especially if growth stocks with ridiculous valuations get further plummeted.

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Predictions are very difficult, especially about the future :wink:

True value stocks are never out of fashion, if you buy them with a high enough margin of safety. The problem is, that it’s extremly hard to find such stocks at the current valuations.

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Human nature doesn’t change. We’re bound to repeat the same mistakes. Just in different settings.

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Looks like the market is continue to decline. It would be good to re-test the lows of last week.

I am waiting to see further drop and maybe drop a nice chunk into a triple ETF.

I think there are some sales ongoing. Check out s&p500 biotech ETF is down 45% from peak. The 3x ETF close to 90% down. Valuation on biotech are still a little elevated but if we go down another 30% would be once in a lifetime to try a nice bet. Edit. Once in a 5 or more years opportunity.

I’m also getting antsy but rather on individual stocks to start burning in my cash.
Not naming the tickers, but I believe some stuff is just way oversold on panic. Worst case it’ll be a long buy-and-hold :smiley:

We’re out of the steep channel that was building since March 2020, and so far the 200MA seems to have held up the SPX, but if it does drop, the bottom of that channel is 3500 points. That’ll hurt (but still leaves a bull cycle intact).

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We want tickers!!! :slight_smile:

Everyone is responsible of their own decisions!
I may not invest in the ticker directly but it may spur ideas for a another stock in the same sub-industry.

I can go first. I was tracking:

  • CRISP - still too high for me
  • DTIL - precision biosciences - small cap risky but large upside
  • ANSYS and snowflake - both larger and still priced high - large discount needed yet for me to go there

Also tracking 2 triple ETFs

  • LABU - 3x biotech ETF
  • wisdomtree copper 3x - for the Eletric revolution. It’s holding. If we go down, I may re-assess

While we are all responsible for our decisions, I just want to underline that the title of the thread notwithstanding, what we are talking here are tactics. Just a friendly reminder that the whole point of a strategy is to enlighten further decisions down the road. It’s probably better to make sure our tactics do follow our global strategy and that we don’t get carried away. :wink:

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Wolverine, I think you are very right!

One step back. I positioned my portfolio last year already as follow:

  • decrease US weight
  • add Europe and value tilt
  • overweight oil
  • tilt some small cap growth fund

So far 3 out of 4 proved well.

This year I followed the same strategy but

  • sold some equity to be able to buy if an opportunity arises
  • if a big correction happens invest a large chunk into 3x ETF for UPRO (S&P500) and YINN (China)

What I did not expect was a large correction in biotech and other Nasdaq stock, especially cash negative one with some 50% and more down from ATH.

I don’t feel ready to enter UPRO yet but I increase my attention to biotech as the next level down from last week’s low is a buy signal for me.

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Are you sure about it?

I am playing various investment scenario with my crypto portfolio, which has low value; trading costs are negligible and market moves x20 in comparison with stocks. I tried the constant leverage approach just before the most recent crash, well, I won’t anymore. Felt very stupid when after a crash I was selling my positions in order to repay the margin loan and reduce the leverage.

So, to take a margin loan to invest after a crash and in worst case slowly repay it could have been an option for me, buying a constant leverage ETF - no. Unless my understanding of how they function is wrong, of course.

3x ETF = 3x daily movement.

To go back to even takes you always more than initial drop. E.g. down 10%, it requires 11% to go even.

For me 3x are very risk instruments but they are not 20x futures that can go to zero. It also depends on which 3x. For example 3x S&P 500, you would need 34% daily decline for the S&P500 to wipe out your position. However, there are circuit breakers. I don’t think S&P can go down more than 17-20% in a single day.

Having said to at biotech or other 3x ETF are way more risky as the pool of stocks is smaller. I still don’t think -34% in one day but I would pay attention.

My thinking is when you get a big correction and you buy a 3x ETF near the bottom with 75% of your bet, then you have good chances you may make money and in case it further drops you deploy the other 25%.

Where I don’t think 3x ETF work is long bear markets. You think market has tanked but in reality it didn’t enough and slowly it continues to go down, stabilize, go down again. Then you are screwed, because at every further scale down, it will take always more to go back. At that point it takes you years to go up unless you DCA, which I think you wouldn’t do then. And most likely you will sell your position at a loss.

I think we need to be very careful but if you have an extra pot That can be lost, 3x ETF after a correction could be a nice upside.

And how would you know when “after” is? :grin:

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Statistically you get -10% every year in the S&P500. Last few years were a positive exception.

-20% every 3.5years or more. -30% probably every decade.

Those are entry signal. I acknowledge one thing is theory. The other the guts to enter when there is blood on the street

just to mention, 3x leveraged is broadly discussed at bogleheads:

HEDGEFUNDIE’s excellent adventure [risk parity strategy using 3x leveraged ETFs]

:smiley:

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… and then you’re out of money for the next 20-30% drop - busted. :boom:

a 3x ETF sounds like an all-in, but don’t forget after 2007-2008 there was also 2009 - think about when would you have invested your initial big chunk of 3x ETF and see for yourself what would’ve happened.

As a reminder, let me paste in this chart here.

  • it started at around 1500
  • you might have stepped in at around 1000, thinking ah, -30%, buy the dip.
  • then it fell another 30% from there
  • you would’ve needed about a year to come out with zero

A bit earlier up, the dotcom bust was also 3 years long:

  • you might have bought here at 1150, only to experience another 30% drop over the next 2 years
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All I can say is - best of luck. :cowboy_hat_face:

it sounded all good, until I compared the SP500 with the mentioned PIMCO StockPlus stuff that actually implements this strategy. I’m concluding that it either didn’t work out, or I’m just plain stupid and can’t see the forest from the trees. Please help me. :slight_smile:

Just be mindful of your investment strategy and stick to that. In my case I keep going with my boring VT as main strategy roughly every month (I sometimes try to market time the buy, currently with a pending order at 95$) and beside that I have some satellite parts in Crypto, different stocks (quite some Biotech as this is my field of expertise) and do some mini-futures with the EMA and RSI charts. Specially the mini futures are more for fun and that way I would also recommend to handle a 3x ETF. Never ever I would go with a big amount of cash into such a construct. While understanding the physical ETF’s, I have no idea what’s behind a leveraged ETF, if you do not understand it do not use it :wink:

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Well, there‘s synthetically replicating ETFs as well. Leveraged ETFs aren’t much different - and the beauty of them is that even their price development is strikingly simple.

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