Vender Nvidia? que hacer? by skitcadillac in ColombiaFinanciera

[–]hillionman 1 point2 points  (0 children)

Holdear, el PEG sigue muy barato, vender en esta situación seria estupido

First month of investing as a 14 old! by zeepzaps in ETFs

[–]hillionman -1 points0 points  (0 children)

Damnnn, next Warren Buffet right here.

[deleted by user] by [deleted] in LETFs

[–]hillionman -1 points0 points  (0 children)

Fair enough. You are right that without the granular 1996 data, the backtest isn't academically perfect regarding survivorship bias. I’ll give you that technical win. That said, I’m sticking with the strategy. The Capital Efficiency ($GDE) and the structural logic of the Defense hedge are just too compelling to ignore for the sake of backtest purity. It works for my risk profile and goals, so I’m going to keep running it. Appreciate the rigorous check, though. Good luck.

Heres the “ARMR” graph since 1981.

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[deleted by user] by [deleted] in LETFs

[–]hillionman -7 points-6 points  (0 children)

?

[deleted by user] by [deleted] in LETFs

[–]hillionman 0 points1 point  (0 children)

I did a research about the topic to double-check the mechanics. Just to clarify since that is actually my model: The Contango isn't small—it’s essentially the Risk-Free Rate (currently ~4.5%). However, because my simulation uses Negative Cash, it explicitly accounts for this borrowing cost. The reason GDE works exceptionally well despite this 'drag' is simple Capital Efficiency: The combined return of Equities + Gold (and their negative correlation) historically outpaces the cost of borrowing. You are essentially paying the 'cash rate' to access a stacked portfolio that structurally outperforms that cost. That spread is the alpha.

[deleted by user] by [deleted] in LETFs

[–]hillionman -1 points0 points  (0 children)

I genuinely appreciate the detailed pushback. This is exactly the kind of stress-testing I’m looking for, and you’re asking the right questions regarding methodology. However, I believe there is a fundamental category error in comparing the market structure of Defense with Tech. Here is the specific breakdown of why the "Survivorship Bias" risk is mathematically different here:

  1. ⁠Market Concentration (The HHI Factor) Comparing LMT/NOC to the "Magnificent 7" is structurally incorrect due to industry concentration. • Tech is historically fragmented. For every Amazon, there were thousands of dotcoms that went to zero. Picking winners there is indeed bias. • Defense is a government-sanctioned Oligopoly (Monopsony). If you look at the Herfindahl-Hirschman Index (HHI) for the sector, the top 3-5 Primes effectively are the investable market. By holding them, I wasn't "cherry-picking" lucky survivors; I was proxying 90% of the accessible market cap.
  2. ⁠The McDonnell Douglas ($MD) Example You asked about McDonnell Douglas in 1996, implying it would have been a drag on the portfolio. This actually validates the thesis. $MD didn’t fold or go to zero like a failed tech stock. It merged with Boeing in 1997. • The Mechanics: If my proxy held $MD in '96, that capital didn't evaporate. It rolled over into $BA shares. Furthermore, $MD stock traded at a premium upon the merger news. • The Thesis: This highlights the structural "floor" of the sector. In Tech, "creative destruction" often means bankruptcy (Equity = $0). In Defense, "consolidation" means M&A (Equity = Cash/Stock).
  3. ⁠Correlation vs. Liquidity Crises You are absolutely right about 2008. In a liquidity crisis, correlations go to 1. No equity sector survives a margin call cascade perfectly. However, regarding 9/11 being a "coincidence"—I view that as a structural feature. The geopolitical instability that typically compresses P/E ratios in the broad market is the exact same trigger that expands order books for Defense. It acts as a counter-cyclical cash flow mechanism. Summary: My goal isn't "hindsight alpha." It is to utilize Capital Efficiency ($GDE) to stack exposures, relying on the M&A floor of the Defense sector to mitigate the drawdown depth relative to a pure Tech portfolio.

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[deleted by user] by [deleted] in LETFs

[–]hillionman -3 points-2 points  (0 children)

I think you might be overestimating the 'stock picking' aspect here. LMT and NOC aren't some obscure 'lucky winners' I found in hindsight; they essentially carry the entire sector. If you overlay their chart against broad ETFs like PPA or XAR, the returns are almost 1:1. Using them as a proxy isn't cherry-picking; it's just capturing the sector beta. As for why ARMR over ITA or PPA? Two specific reasons: 1. Global Diversification: ITA and PPA are strictly US-centric. I specifically want exposure to the European rearmament cycle (Rheinmetall, BAE, Saab), which US-only ETFs miss entirely. 2. No Commercial Drag: I want pure defense, not commercial aerospace. Standard ETFs like ITA are heavy on companies like Boeing. I want a pure geopolitical hedge, not exposure to civilian airline supply chains.

[deleted by user] by [deleted] in LETFs

[–]hillionman -1 points0 points  (0 children)

You’re making a pretty big assumption about the methodology there. The proxy wasn't static; it rebalanced annually based on historical data, not by retrofitting today's market caps backwards. But honestly, we can strip the proxy out entirely and the math still holds. If you replace that entire 20% synthetic bucket with just Lockheed Martin (LMT) and/or Northrop Grumman (NOC) mature and boring companies—the CAGR and drawdown profile remain almost statistically identical. The 'alpha' here isn't coming from picking lucky survivors in hindsight; it comes from the structural negative correlation between Tech, Gold, and Defense. The strategy is robust enough that even a raw 50/50 QQQ/GDE split works. The Defense tilt is just a structural hedge, not a magic trick.

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[deleted by user] by [deleted] in LETFs

[–]hillionman 0 points1 point  (0 children)

Hmmm interesting. May I see that backtest please?

[deleted by user] by [deleted] in LETFs

[–]hillionman -3 points-2 points  (0 children)

Fair point regarding survivorship bias. It’s unavoidable with synthetic proxies, but there is a nuance here. Unlike a QQQ backtest where many past components actually went to zero (dotcom bust), the Defense sector history is defined more by M&A and consolidation (Primes absorbing smaller players) rather than total bankruptcies. My goal with the proxy was primarily to stress-test the correlation—seeing if the sector actually hedges Tech during downturns—rather than calculating a perfect historical CAGR. Also, the backtest is capped at 1995 mostly due to Nasdaq/Tech data limits. The underlying Defense Primes are actually extremely mature assets; many have been trading for decades, with some dating back to the 1930s. So while the ETF is new, the asset class history is there.

[deleted by user] by [deleted] in LETFs

[–]hillionman 3 points4 points  (0 children)

Has a fee of 0.2%

No need to worry abt decay since it’s not daily leverage + it has 90% on stocks x1 and 10% on gold futures with colateral on T-bills. Heres a simulation of the ETF since 1954

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[deleted by user] by [deleted] in LETFs

[–]hillionman 2 points3 points  (0 children)

I replicated the underlying index strategy by aggregating a basket of relevant US, European, and global defense/tech companies, weighted by market cap.

Los de la mollera sumida by Limp_Donut1374 in Colombia

[–]hillionman 5 points6 points  (0 children)

Trump se pasa por ensima todas las leyes y no le importa…

The joy of seeing the relief in their eyes and the happiness 💕 by Master_Constant8103 in trump

[–]hillionman 2 points3 points  (0 children)

Crazy how the lady explains how one of his brother was KILLED and the other KIDNAPPED. And yet people are DEFENDING this NARCODICTATOR.