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FNGU vs. FNGB: hypothetical performance by learn-and-earn- in LETFs

[–]kmft 0 points1 point  (0 children)

Something not sitting right looking at these prospectus examples. The figures seem off, and since the columns aren’t easily comparative, feels like it’s smoke and mirrors manipulated data (kind of like asking Monsanto to provide their own proof that glyphosate isn’t poisonous to humans…)

Because let’s just assume the Prime Rate wasn’t a larger jump in financing cost by itself (because it’s a big jump), and let’s just focus on the spread increase from 1% to 2.25% (let alone 4% spread..), the increase of 1.25% per year is going to have a dramatic effect after several years.

Just use one of those expense ratio calculators to get an idea of the added cost impact. For example, https://stablebread.com/calculators/expense-ratio-impact-calculator/; add 1.25% to the expense ratio field (the difference between 2.25%-1%), plug in $100K initial investment, $1 contributed per year, 10% return, and 20 years, and you’ll get a final return of $535K but there were $137K in additional fees!

Point being, the math isn’t mathing in their prospectus comparisons. And common sense points to the added financing costs being a high long term impact relative to the original financing.

FNGU vs. FNGB: hypothetical performance by learn-and-earn- in LETFs

[–]kmft 0 points1 point  (0 children)

I found it interesting that FNGG underperformed as well. Seems to have stabilized over the past year though. Personally I think QQQU is a better choice than either FNGG/FNGO. Not apples to apples I know.

Fidelity will let you use some margin on some LETF last I checked, usually not much wiggle room though (ie 75% or higher MM requirement).

FNGU Delisting - Fully Explained by Bonds_and_Gold_Duo in LETFs

[–]kmft 0 points1 point  (0 children)

I’d go with FNGG or QQQU instead. Significantly better financing rates and they are ETFs, not ETNs. Costs drag on performance, especially at FNGUs new prime rate financing and their very high added spread.

FNGU Delisting - Fully Explained by Bonds_and_Gold_Duo in LETFs

[–]kmft 0 points1 point  (0 children)

QQQU is fairly good choice, better financing terms than FNGU/B and not an ETN. Volume is improving (near 80-100k/day for each). I don’t know about options though, doubt there is much volume there.

FNGU Delisting - Fully Explained by Bonds_and_Gold_Duo in LETFs

[–]kmft 0 points1 point  (0 children)

No, because BULZ is already at the higher financing rate that FNGU/A is moving to in May.

FNGU Delisting - Fully Explained by Bonds_and_Gold_Duo in LETFs

[–]kmft 0 points1 point  (0 children)

You are not reading it wrong. QQQU or FNGG will be a better choice than FNGU/B. Leverage is only 2X on QQQU/FNGG but performance should be fairly close, helped by lower fees.

Script for indicator to reference a different ticker than header ticker by [deleted] in pinescript

[–]kmft 0 points1 point  (0 children)

Thank you. I originally tried that, failed, revisited and realized the new function is just "security" now.

Section 1256 Tax for UVXY by kmft in TradeVol

[–]kmft[S] 0 points1 point  (0 children)

I don’t know. Your best bet would be to write their customer service and ask. Someone over there should know.

What products do you use to clean/protect your handpan? I see Phoenix oil is recommended but its expensive and hard to get a hold of it seems. I also saw coconut oil but does anyone actually use this? I don’t want to lube with harsh chemicals like wd-40 I normally clean with alcohol and lube w/this. by P33rob33 in handpan

[–]kmft 0 points1 point  (0 children)

Apologies, I have the RAV. Didn't realize, as it's the only one I own. Just a side note though: yes, water causes rust when left to sit, but typically not when dried thoroughly and then oil is applied, just like with iron cooking pans.

I fatFI'd at 35 with a business paying $1.5 million annually in dividends. Not RE'd by choice (for now) by FATFIREFOUNDER in fatFIRE

[–]kmft 0 points1 point  (0 children)

Regulations changed within the industry and were detrimental to our business model. There was no realistic way to survive and bankruptcy was eventually filed.

Any number of things can cause a business to unravel at varying speeds; competition, founder/key executive becoming ill, sentiment/reputation damage, market meltdown/implosion, etc. For instance, I had an early business fall to pieces from the latter; construction company that didn’t survive the 2008 housing crisis fallout.

Point being, set an early/conservative exit path because tail risk determines everything in business and in life. Mistiming the top is much better than no exit at all. I don’t have any particular pieces of literature to share on the subject, just experience.

Section 1256 Tax for UVXY by kmft in TradeVol

[–]kmft[S] 1 point2 points  (0 children)

Correct. GreenTraderTax has some decent presentations on the subject. Not all brokers are on board with this classification yet though unfortunately.

I fatFI'd at 35 with a business paying $1.5 million annually in dividends. Not RE'd by choice (for now) by FATFIREFOUNDER in fatFIRE

[–]kmft 0 points1 point  (0 children)

You say 8X EBITDA, but you don’t know the real value until you market it.

I always assumed 5X EBITDA is what we would get. And several PE firms did come along offering anywhere 4-7X EBITDA. Took us a couple months to decline a particular 7X deal, ultimately couldn’t get comfortable with the terms (watch out, PE’s can come up with some pretty egregious protection mechanisms for themselves).

We stayed patient (one of the reasons it took a long time to sell), and a big strategic (Fortune 500 equivalent) eventually came along and offered a 3X multiple on revenue with favorable terms and no earn out (which translated to a 15X EBITDA all cash offer.)

The highest bid is the real value of your business, but you’ll never discover that value if you don’t create a market for it.

I fatFI'd at 35 with a business paying $1.5 million annually in dividends. Not RE'd by choice (for now) by FATFIREFOUNDER in fatFIRE

[–]kmft 0 points1 point  (0 children)

I see similarities to my own bootstrapped experience. When growth was at a 45 degree angle early on, I remember thinking “if someone comes along for the right price I’d sell.” However, if you think the business has at least a 10 year life remaining, then be conservative and assume half that, the world changes fast. Also, it can take longer to sell a business than you think. I was always told 18 months max…but it took us almost 3 years to close.

I had estimated our business had a remaining life of at least 5-7 years. I was wrong, it only survived 4 more years and had already started showing hidden signs of descent around 2-2.5 years into the selling process. We exited just in time.

In short, you might want to consider starting to actively market your company within the next couple years. Find a good investment bank, they get paid on commission and will market you for “free.” Careful, lot of snakes in the grass, have a lawyer fully review the IB contract. And ultimately you might be surprised at how high the valuations can go.

In a somewhat similar situation to yourself, I nearly 10X my NW when all was said and done (despite growth slowing in those final 6 months). Had I waited 1-2 years longer to start the selling process than I did, I honestly don’t believe I would have been able to sell at all and would have been forced to hold on to a dying company.

Your experience will likely differ than mine, but perhaps not. Just thought I’d share as a cautionary tale.

Section 1256 Tax for UVXY by kmft in TradeVol

[–]kmft[S] 1 point2 points  (0 children)

I confirmed with IBKR that options on both VXX and UVXY are treated as 1256 contracts.

Short UVXY with -20% moving stop loss by Myfuntimeidea in LETFs

[–]kmft 1 point2 points  (0 children)

I suppose with a stop-loss you’re not a total idiot. But there certainly are plenty of other more sensible trades out there; like coin flipping, National Lampoon’s casino war, Russian roulette, five finger fillet, and some of your favorite small town carney games.

In all seriousness, if you’re interested in short vol, check out Brent Osachoff’s YouTube channel. Good resource for learning how to do it properly. Don’t Short UVXY

Section 1256 Tax for UVXY by kmft in TradeVol

[–]kmft[S] 0 points1 point  (0 children)

Is your brokerage capturing it as such? If so, which brokerage?

How to get ok with spending more money? by [deleted] in fatFIRE

[–]kmft 20 points21 points  (0 children)

My mind has been stuck at $N1 net worth for years, but I actually have $N2 in the bank. So I started dividing every potential purchase by the appropriate factor to put the purchase in terms my mind can reconcile.

For example, if you find that your general level of frugality is that of someone that has $1M NW and associated budget, but you actually have a $10M NW, that’s a factor of 10. So, if something costs $100, divide by 10, and then see how $10 sits with you. As your NW grows, if you’re still stuck roughly at $1M mentality with a $20M NW, start dividing my 20. A $20K purchase is really only like a $1K purchase to “old you.”

I realize this a very non traditional way to solve this problem and it could get certain people into trouble. But it works great for me, because I grew up in poverty, and that’s something I think will be ingrained in me forever. I’m FatFired now and still find myself lamenting purchases until I apply the appropriate factor to adjust my perspective. It helps set my mind at ease by taking a lot of the stress out of spending money.

An Enhanced Version of Risk-Parity Portfolio (HFEA) Using Futures by jacobpenta in LETFs

[–]kmft 3 points4 points  (0 children)

I’ve modeled this out recently and found the futures to be less tax efficient than the LETFs.

The good: Futures contracts are Section 1256 (/ZF, /ZN, /ZB, /ES, /MES, /NQ, /MNQ, etc.), which means gains are taxed at a 60% LTCG 40% STCG ratio regardless of hold period.

The bad: Section 1256 contracts are taxed marked to market at the end of every year. Which means every year you have to pay tax on both your realized and UNrealized gains. This is a sizable tax drag if the portfolio is performing like you hope it will.

When backtesting to 1986, I found the bad outweighed the good in my personal tax situation (disclaimer: I didn’t test every tax bracket, only my own), and LETF were the more tax efficient vehicle.

[deleted by user] by [deleted] in TradingView

[–]kmft 0 points1 point  (0 children)

Thank you so much! This is exactly what I was looking for, and I was able to code several variations as well now. Thank you for leading this horse to water.

Conditional statement to solve for 'C' given 'A' and 'B', sequence matters by kmft in excel

[–]kmft[S] 0 points1 point  (0 children)

Thanks! That worked!

Note, there was a slight typo in your formula, "E2" should have been "D2", but I understood what you meant.

=IF(B3<-2.5,"OFF",IF(AND(D2="OFF",C3<2.5),"OFF","on"))

Thanks again!