Point is that if the SP doubles and you get your four bagger in the SSO, those in DXO, leveraged commodity plays (not gold) will be enjoying ten baggers. Even if earnings come back, which they won't in 5 years (you do realize that last year earnings were at a record high), the leverage that drove stock prices so high will not be back in 5 years. Demand for commodities though was a function of a richer world and a weak USD. Population growth,a weakening USD, trade flowing again, demand from infrastructure projects world wide, and decreased production (happening now) will also feed the next commodity bull. On the equity side you have the headwind of bommers starting to pull money from 401Ks to retire. Again I say that if the stock market doubles in the next 5 years (and I don't think it will, at least not currency adjusted) commodities will out pace substantially. If we crash then commodities will also fare better than equities. Better risk, better reward.
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My trade for the next 5 years
- Thread starter bwolinsky
- Start date
Quote from Mvic:
Point is that if the SP doubles and you get your four bagger in the SSO, those in DXO, leveraged commodity plays (not gold) will be enjoying ten baggers. Even if earnings come back, which they won't in 5 years (you do realize that last year earnings were at a record high), the leverage that drove stock prices so high will not be back in 5 years. Demand for commodities though was a function of a richer world and a weak USD. Population growth,a weakening USD, trade flowing again, demand from infrastructure projects world wide, and decreased production (happening now) will also feed the next commodity bull. On the equity side you have the headwind of bommers starting to pull money from 401Ks to retire. Again I say that if the stock market doubles in the next 5 years (and I don't think it will, at least not currency adjusted) commodities will out pace substantially. If we crash then commodities will also fare better than equities. Better risk, better reward.
Nah, you're just echoing the whole of Wall Street. Financials and commodities are a problem. They brought us down single handedly by 35%. Just by themselves. The paltry amounts we're down beyond that is a perception that if those stocks are down, others should be down, too.
Analysts have overshot significantly to the downside. Most S&P companies by sheer size will start their earnings growth soon enough.
As I said in the blog, earnings forecasts were already cut in half. Cut them some more and you are pricing in zero to negative growth for the next 10-20 years. Not likely. That's not going to happen.
Quote from trackstar:
History and cycles say you are wrong. Commodities would earn you more money quicker with less risk.
I don't think so. Historically commodities have performed terrible. I don't expect a big tear to the highs for any major commodities, including gold, oil, or any of the grains.
It's really retarded to talk about gold. It's lifetime APR since the futures were created is about 3-4%.
Quote from trackstar:
History and cycles say you are wrong. Commodities would earn you more money quicker with less risk.
Which part of the cycle am I missing? The fact that we are in a recession doesn't really matter to me, mainly because we'll eventually be out of it.
The trough has been formed.
Quote from bwolinsky:
Hey, here's my trade as an investment, not really to trade with:
Buy SSO with 100% of the account. Wait 5 years. I expect it to triple, possibly quadruple.
So far i've risked about 10% from the initial entry to make 200-300%. I consider this cheap risk, but I know probably that most of you wouldn't be into it.
truthfully I think your better bet would be to buy S&P future contracts and leverage yourself w/ the leverage you want. The real cost of the S&P future contracts is an interest rate of like 1.5%. I wonder what cost you are paying with your ETF and don't forget about management fees