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What are you buying today?


LowIQinvestor

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Canfor (CFP.TO) at C$14.35. Time to scratch my (monthly?) lumber itch. 
 

Market cap is $1.7 billion. Net debt is a positive $300 million (net cash position). So enterprise value is about $1.4 billion.
 

They also have +$900 million of duties on deposit. This is worth something.

 

The stock is selling off aggressively because interest/mortgage rates have moved higher. 

Edited by Viking
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I'll build a 3x KWEB ETF position on monday with a planned allocation of 3-5% of my PF. 

 

If we hit 2021 Valuations again in the next 5 years its gonna be close to a 10-bagger. Valuation in China are nuts and company quality is at least as high in the US, KWEB is cheap: 

 

image.thumb.png.6ddd944b3a3ca07d9d9ebe4f1fa294bf.png

 

image.thumb.png.8c74639e1284483892c7bb391828aca3.png

 

 

Edited by Luca
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5 minutes ago, Luca said:

I'll build a 3x KWEB ETF position on monday with a planned allocation of 3-5% of my PF. 

 

If we hit 2021 Valuations again in the next 5 years its gonna be close to a 10-bagger. Valuation in China are nuts and company quality is at least as high in the US, KWEB is cheap: 

 

image.thumb.png.6ddd944b3a3ca07d9d9ebe4f1fa294bf.png

 

image.thumb.png.8c74639e1284483892c7bb391828aca3.png

 

 

Btw, these slides are a bit older. Tencent got cheaper, PDD grew a lot and is now at 10-15x earnings. JD.com buying back, Net-ease, Baba, Meituan...

Edited by Luca
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These 3x ETF’s get killed by volatility if the underlying index goes nowhere and the index just seesaws. It’s going to essentially buy high and sell low all the time due to the inherent 3x  leverage. 

Edited by Spekulatius
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20 minutes ago, Spekulatius said:

These 3x ETF’s get killed by volatility if the underlying index goes nowhere and the index just seesaws. It’s going to essentially buy high and sell low all the time due to the inherent 3x  leverage. 

Yep, and a -30% crash will get you down to -90% and that can happen but I also think that with all the buybacks, sentiment bottom and ongoing recovery that the window to go into china with leverage looks relatively attractive here, ill leave some space to DCA into this too. 

Edited by Luca
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1 minute ago, Luca said:

Yep, and a -30% crash will get you down to -90% and that can happen but I also think that with all the buybacks, sentiment bottom and ongoing recovery that the window to go into china with leverage looks relatively attractive here, ill leave some space to DCA into this too. 

 

That likely is not what @Spekulatius was referring to.  3x funds rebalance on a daily basis.  So, over time they do not track 3x the cumulative performance of the index.  A simple example:

 

Buy at 100

Day 1: index goes to 105, so up 5% -- 3x goes up 15%, so 3x fund to 115.

Day 2: index goes back to 100.  This is down 5/105 = down 4.7619%, so 3x fund will be down 3 x 4.7619 = 14.2857%.  115 * (1 - .142857) = 98.57.  The 3x fund has underperformed (3 x cumulative return of the index). 

 


This effect will magnify over time and can be particularly brutal in volatile but overall flat markets.  

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Just now, KJP said:

 

That likely is not what @Spekulatius was referring to.  3x funds rebalance on a daily basis.  So, over time they do not track 3x the cumulative performance of the index.  A simple example:

 

Buy at 100

Day 1: index goes to 105, so up 5% -- 3x goes up 15%, so 3x fund to 115.

Day 2: index goes back to 100.  This is down 5/105 = down 4.7619%, so 3x fund will be down 3 x 4.7619 = 14.2857%.  115 * (1 - .142857) = 98.57.  The 3x fund has underperformed (3 x cumulative return of the index). 

 


This effect will magnify over time and can be particularly brutal in volatile but overall flat markets.  

👍

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19 minutes ago, Luca said:

Yep, and a -30% crash will get you down to -90% and that can happen but I also think that with all the buybacks, sentiment bottom and ongoing recovery that the window to go into china with leverage looks relatively attractive here, ill leave some space to DCA into this too. 


if you buy it using margins , it will outperforms the 3x etfs. The 3x ETFs are a ripoff and a big profit source for banks trading it. You basically being front run because people know how much the index must buy at eod especially when there’s large movements . 

Edited by sleepydragon
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On 4/20/2024 at 11:20 AM, KJP said:

 

That likely is not what @Spekulatius was referring to.  3x funds rebalance on a daily basis.  So, over time they do not track 3x the cumulative performance of the index.  A simple example:

 

Buy at 100

Day 1: index goes to 105, so up 5% -- 3x goes up 15%, so 3x fund to 115.

Day 2: index goes back to 100.  This is down 5/105 = down 4.7619%, so 3x fund will be down 3 x 4.7619 = 14.2857%.  115 * (1 - .142857) = 98.57.  The 3x fund has underperformed (3 x cumulative return of the index). 

 


This effect will magnify over time and can be particularly brutal in volatile but overall flat markets.  


I experimented with a trade several years back where you went short on both long and short etf’s and then tried to keep them balanced to try to capture the time decay, don’t remember exactly what happened but I think I closed out with a small profit. 

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55 minutes ago, Luca said:

Starter in 3x KWEB 

 

ISIN:XS2399370043

 

 

I’m sure you already know, but these 3x ETFs have horrible decay in their value when held for the long term.  Be careful with these.

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21 minutes ago, Sweet said:

I’m sure you already know, but these 3x ETFs have horrible decay in their value when held for the long term.  Be careful with these.

Yeye, i like the setup here, didnt play around with this kind of product before and will gain some experience...no investment advice 😄 

Edited by Luca
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