David's avatar
$2.1m follower assets
Question for my $QQQ buyers/ bulls
At what point in this market do you consider everything oversold and start buying $TQQQ instead of $QQQ ? I asked a similar question yesterday regarding plain margin and it seem like nobody is willing to do margin right now
Conor's avatar
You need a straight line up for TQQQ...I would say the next year will NOT be a straight line up
David's avatar
@conorvalue could you expand on what you mean by needing a straight line up? If we were to see a lot of volatility from here but in the positive direction (even if not that drastic) wouldnt $TQQQ still be higher than $QQQ ?
Conor's avatar
@avid6ix the ETF resets every day so if the market went up 3% then down 4% then up 2% then down 3% and so on and so on you wouldn't actually get triple the returns even it were up for the year. I do agree with you on looking at the 5 year return and even YTD for the SQQQ (short verison) has crushed QQQ in terms of return.



Why do you think $TQQQ and not $SQQQ?
David's avatar
@conorvalue ahh ok I think I get it, but does that means that this returns are actually wrong?
David's avatar
@conorvalue Also, the reason Im thinking $TQQQ instead of $SQQQ is because I think we are closer to the bottom but I tend to be really optimistic so I could definitely be wrong
Conor's avatar
@avid6ix Those returns are correct if you bought at $8.21 a share and
held your shares even after the price went from $28.64 to $8.88 in March of
2020 then continued to hold to the peak.

You would have been
better off just buying at the end of March of 2020 but that's impossible to
time out. Honestly, people just got really lucky. March 2020 to November 19,
2021 it went straight up. I wouldn't think this market will behave remotely
close to that period of time.

I wouldn't play either of them right now unless your holding period is very short.
Benjamin Buchanan's avatar
I'd prefer to do leverage my own way, with options or just margin - these levered products don't track well at all over time, only if the march up is a straight line
David's avatar
@01core_ben maybe I dont really understand how it works but if you look at the 5y returns of $TQQQ vs $QQQ on google we get ~360% vs ~130%. Having said this, what do you mean by "these levered products don't track well at all over time"?
Benjamin Buchanan's avatar
These products are designed to track over a single day, not over time. If you start with $100, note how the daily performance on the right is twice daily performance on the left, but after 6 moves you have $60 instead of $88 - this is a highly exaggerated version of what happens to these products in choppy/bear markets.
David's avatar
@01core_ben gotcha! Thanks for going out of your way to explain!

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