The Johnny Doe IBKR portfolio

[wellington]

Slow horses also deserve some affection. I like how @JohnnyDoe take care of cats and slow horses.

Missing the point, if it's sub 12% PA (pre-tax) and more so (post-tax) then it's essentially debased as annualised refinancing of state debt is a case of 8% paid for refinancing cost (stealth tax) that increases balance sheet which then increases assets nominal values (various degrees) then inflation (variable goods inflation) 2/4% (usually double reported).

Then traditional taxes.

 

[wellington]

I sell only to keep the portfolio balanced or if the initial investment rationale is no longer present.

Of course you don’t need to think too much about these details when you average +180%.
With just an annual compounding, the value of your investment x becomes x*(2.8)^n years. That is, every year your investment is multiplied by 2.8, which means that if you invest $10,000 you will have $296,000,000 after 10 years (and almost $9 trillions after 20 years).

It doesn't work like that.

You enter as a macro trade (bottom zone of the liquidity market) which means you have a very volatile first year (may be 95% down), second year you have 100-1000% gains (unrealised or realised to average losses/gains later), third year you have blow off tops so have volatile motions to exit.

Fourth year you've exited and twiddle your thumbs.

 

[wellington]

I.e Liquidity is currently slowing its rate of change - towards peaking/rolling over , means that volatility is there and the best gains have already been secured, its heightened risk period, but also potential of upside moves are wilder so risk/allocate.

But you could also be holding something that goes down 20-95%.

 

[JohnnyDoe]

It doesn't work like that.

You enter as a macro trade (bottom zone of the liquidity market) which means you have a very volatile first year (may be 95% down), second year you have 100-1000% gains (unrealised or realised to average losses/gains later), third year you have blow off tops so have volatile motions to exit.

Fourth year you've exited and twiddle your thumbs.

I prefer the roulette, with a fair and certain 35:1 payout, plus some free drinks and a night at the hotel de Paris with compliment of SBM.

 

[rss]

You enter as a macro trade (bottom zone of the liquidity market) which means you have a very volatile first year (may be 95% down), second year you have 100-1000% gains (unrealised or realised to average losses/gains later), third year you have blow off tops so have volatile motions to exit.

 

[Mercury]

Remember:
Dividends=real money that can be used to buy btc and other stuff
Gains=fairy dust

This. Furthermore dividends will mitigate sequence of returns risk whereas with capital gains one may have to sell assets at loss during a lasting bear market. Capital gains strategy for income is far from passive/reliable as it needs market timing.

 

[Radko]

This. Furthermore dividends will mitigate sequence of returns risk whereas with capital gains one may have to sell assets at loss during a lasting bear market. Capital gains strategy for income is far from passive/reliable as it needs market timing.

That's why a lot of people have 80% Stocks, 20% Cash.
That 20% cash should be enough to live off of for a few years in case of a recession.

 

[Mercury]

That's why a lot of people have 80% Stocks, 20% Cash.
That 20% cash should be enough to live off of for a few years in case of a recession.

Sure if your 20% cash can cover 10 years (worst case scenario) living expense.
The issue here is during this recession period you are not able to invest/DCA down as your cash is used for living (unless you have other income sources), waiting fingers crossed the return of the bull market.

 

[Radko]

Sure if your 20% cash can cover 10 years (worst case scenario) living expense.
The issue here is during this recession period you are not able to invest/DCA down as your cash is used for living (unless you have other income sources), waiting fingers crossed the return of the bull market.

Keep in mind that the 20% cash can return some interest, and the 80% stocks can yield dividends, so you can use some of the interest and dividends for living expenses, and some to DCA down into the market.
Probably the key thing here is living in a country where your monthly living expenses are low, such is the case of Thailand.

Having said that, I don't buy anything when valuations are as high as they are now, so I have a lot of cash ready to deploy, in the meantime I'm getting 4%~5% on that cash.

It's crazy what's happened during the last 2 years, we will see what the next 5 years bring.

 

[JohnnyDoe]

I don't buy anything when valuations are as high as they are now

I’ve been hearing that since when the S&P hit 1000 (or btc 1000). Never try to time the market.

 

[Radko]

I’ve been hearing that since when the S&P hit 1000 (or btc 1000). Never try to time the market.

I was there during the dot.com bubble, and I was there during the financial bubble of 2008, if I learned something is to not buy anything when things are soooo damn expensive , but I get the point.

 

[Butcher82]

Guys, what do you think about these ETFs - they give some nice yields like 50-100% per year. But they are all new kids on the block and there's short history.

The price on these three is not dropping too much over the last 6 months.

YieldMax NVDA Option Income Strategy ETF (NVDY)
YieldMax MSTR Option Income Strategy ETF (MSTY)
YieldMax SQ Option Income Strategy ETF (SQY)

Are they worth looking at or they are some kind of scam?

 

[JohnnyDoe]

Guys, what do you think about these ETFs - they give some nice yields like 50-100% per year. But they are all new kids on the block and there's short history.

The price on these three is not dropping too much over the last 6 months.

YieldMax NVDA Option Income Strategy ETF (NVDY)
YieldMax MSTR Option Income Strategy ETF (MSTY)
YieldMax SQ Option Income Strategy ETF (SQY)

Are they worth looking at or they are some kind of scam?

These are legit funds, not a scam at all, and are good for a certain kind of investors. They are definitely not for everyone.

YieldMax funds aim at generating regular income by writing options on the underlying security, which they don’t own (naked calls). As a result, you will receive a capped appreciation of that security in the form of monthly dividends.

In a bull market your profits will be lower than if you held the underlying security, but these profits will be “real” money deposited in your account every month, not just a number that you see increasing over time until you decide to sell.

In a bear market, you will lose money, and the fund can quite easily blow up (we can only speculate on the conditions that will trigger this event, as we don’t know exactly what they do when prices go down).

 

[Butcher82]

These are legit funds, not a scam at all, and are good for a certain kind of investors. They are definitely not for everyone.

YieldMax funds aim at generating regular income by writing options on the underlying security, which they don’t own (naked calls). As a result, you will receive a capped appreciation of that security in the form of monthly dividends.

In a bull market your profits will be lower than if you held the underlying security, but these profits will be “real” money deposited in your account every month, not just a number that you see increasing over time until you decide to sell.

In a bear market, you will lose money, and the fund can quite easily blow up (we can only speculate on the conditions that will trigger this event, as we don’t know exactly what they do when prices go down).

Thank you so much for the detailed answer. Do you invest in any kind of these funds please? And what do you mean that the fund blows up? It just stops paying or the shares go to zero value rapidly in one day?

 

[JohnnyDoe]

Thank you so much for the detailed answer. Do you invest in any kind of these funds please?

I do not at the moment. I hold some similar products with an index underlying, such as QQQY.

And what do you mean that the fund blows up? It just stops paying or the shares go to zero value rapidly in one day?

It is unlikely that it stops paying dividends, but its value can go to zero. For example, this could happen if they average down and the security enters into a long downtrend.

 

[Butcher82]

I do not at the moment. I hold some similar products with an index underlying, such as QQQY.

It is unlikely that it stops paying dividends, but its value can go to zero. For example, this could happen if they average down and the security enters into a long downtrend.

Are you fine that the value of QQQY is dropping so fast? It is down by 50% last year. Do you estimate your gain as dividends over the loss of the value? And you will exit this product as soon as the gain becomes negative or under the set threshold? What is your strategy please?

 

[JohnnyDoe]

Are you fine that the value of QQQY is dropping so fast?

Yes

It is down by 50% last year. Do you estimate your gain as dividends over the loss of the value? And you will exit this product as soon as the gain becomes negative or under the set threshold? What is your strategy please?

My strategy is not limited to a single position. I currently have 68 holdings in my portfolio, QQQY weights 0.44% and has its reason to be there.

 

[Butcher82]

My strategy is not limited to a single position. I currently have 68 holdings in my portfolio, QQQY weights 0.44% and has its reason to be there.

you obviously know what you are doing thank you for the advise.