Leveraged Securities “LE”

[RotBaron]

As anyone paying attention knows semiconductor and associated companies are hottest investments as a sub sector of tech and have been for a few years. I ran across an ETF that on paper has significantly outperformed other semiconductor LE. Before I get to, yes I know LE’s come with every warning possible that they are for very short term and risks are significantly amplified.

But tbh sifting through all the warnings about you “better understand” what you’re getting yourself into and the explanations and comparisons get confusing. I’m looking for some insight, clarification and possibly wisdom.

I understand that in the most extreme case the ETF/Fund/LE could go bankrupt, but from cursory research that generally happens with LE’s with less than $100 million in assets. 100’s of funds and ETFs close/bankrupt and open every year.

I’m not currently interested in any market segment atm other than semiconductors. I’ve learned the difference between 2x and 3x targets.

Rebalancing is something I do NOT completely understand yet, as it seems to involve treasuries maturing (daily, weekly, monthly?)

Yes, I do understand semiconductors are the biotechs of the last decade and ALL good/bad things come to an end. But while semiconductors themselves may be more at their respective height, AI interest is the current gasoline and that appears to be in infancy.

I differ to you all because in the past so many of you have posted your securities investment knowledge/experience even if for being a hobby.

Before I go on, this ETF is of specific interest to me, it’s 2x “ultra”:
https://www.morningstar.com/etfs/arcx/usd/quote   USD ETF if the link doesn’t work.

Before expenses/fees removed (and differing individual tax liabilities) this fund says $10k over last 10yrs would = $460k.

Every warning is LE’s are NOT “buy & hold” yet unless I missing something during any 3yr period this fund at least beat, if not clobbered the S&P.

I don’t dream this will yield me anything like like %228 increase of 2023, but vs. another ETF such as: https://www.morningstar.com/etfs/xnas/smh/quote

The ROI difference between those two currently is stark and SMH is widely, heavily praised.

What goes up must come down… but what would keep you from holding USD indefinitely, until NVIDIA + others showed weakness? (Nvidia up $150+/share 1 month, ~$550/share 1yr).

Nvidia, AMD, Broadcom and others are certainly benefiting from greed, but their earnings in February showed much support for P/E from “experts” I read.

Forgive my naivete, but the profuse/stern warnings (in this case) currently just seem LE boilerplate.

Thanks in advance.

[Animl-AW]

Thanks, I needed a nap. <S>

[CptTrips]

LoL.

I have to assume your account has been hacked.

I wouldn't touch leveraged ETF's (especially at this moment) even with Animl's money.  Well, maybe with Animl's money, but not with any of mine.

I'd rather just go blow that money in Vegas on whiskey and hookers.

[AKIron]

I lived in Vegas early 90's. Was family friendly then. Went back to visit in '07. The Strip was covered with "business" cards advertising "escorts" and the sidewalks crowded with "people" handing them out.

Go to Durant. Much closer for you.


<edit>

We were sitting at the pool at our hotel. Wife spotted Bucky from American Idol. She went over to talk to him and our two daughters followed. He came back over and we talked for a bit. Nice kid.

[RotBaron]

Vegas always goes back and forth between “family friendly” and then more openly adult. Currently more af a balance and night ladies not as visible.

Anyhow you can start a thread about Vegas, I’ve spent a lot of time there and some players live near in Henderson.

[RotBaron]

LoL.

I have to assume your account has been hacked.

I wouldn't touch leveraged ETF's (especially at this moment) even with Animl's money.  Well, maybe with Animl's money, but not with any of mine.

I'd rather just go blow that money in Vegas on whiskey and hookers.

Pretty much read as, I won’t ever consider Leveraged Equities, under any circumstances, but especially now, is that correct? If so why not ever?
Everyone technically engages in leveraging equities, financing anything comes somewhat close and borrowing against your equity certainly is. Do you just not trust others to do it, namely fund managers or is it the multiplier?

[AKIron]

If I had a crystal ball that actually sees the future what would I use it for?

[CptTrips]

Pretty much read as, I won’t ever consider Leveraged Equities, under any circumstances, but especially now, is that correct? If so why not ever?
Everyone technically engages in leveraging equities, financing anything comes somewhat close and borrowing against your equity certainly is. Do you just not trust others to do it, namely fund managers or is it the multiplier?

Bon Appetite.

[RotBaron]

Well since Vegas is obviously more popular, I’ve actually had spectacular luck playing craps and rigidly following a strategy until one-two instances appear.

I only play the “don’t” and lay triple odds on the point and each number up to three bets total (not counting odds laid).
The exception is when a 4 or 10 are rolled, I’ll go max odds on those now since 10x is the most I can find. I can remember Casino Royale, Horseshoe, Golden Nugget, Plaza, Fremont and a few others once had 100x odds.

Playing the “don’t” and corresponding Don’t Come doesn’t make many friends but it keeps ppl from distracting your attention. Statistically, the don’t with these odds laid instead on Pass line + 6 & 8 max odds is the same because 7 is a winner on Come Out. My luck has just been different 🤷

Anyhow I’ve managed to smash the house ($1000’s) countless times this way, many nights winning this way by a few hundred up to 2k, numerous nights breaking even, some mild losses and only a handful of  . I’ll walk away when it gets cold, or stay out for many rolls when luck turns.

Oops, forgot, I’ll switch to the Pass for a lady… you’ll get clobbered otherwise, “Lady Luck”…

Last time I visited though though the minimums are so high most I can’t play my strategy as a $10 min requires me to have ~$800 bankroll to lose.

No Hardways, no Field, No lays or calls…

Hope you’ve enjoyed another nap Animal  😴

Fun times! Wish I had this luck in other things

[sparky127]

VanEck?  Why not?

[RotBaron]

VanEck?  Why not?

I wasn’t familiar with them until looking into them re: SMH etf.

Small(er) family company, 70+yrs, 5 foreign offices and ~100 billion in assets gives me a better feeling than with the BlackRocks or Schwab’s of the world.

Hopefully these beatings as of late are short-term adjustments to Powell/Fed delays.