BBOZ - BetaShares Australian Equities Strong Bear Hedge Fund

Gunnerguy · 1 May 2021

pozindustrial said:
Speaking from experience it takes nerves of steel to invest in bboz because of the losses that quickly mount if the market goes up. There have been many opportunities to make a great return, but our market has been hard to predict, going sharply down and then up, so you make a killing then lose more than that in the same day.
I am about even, but I am not as willing to risk it as I was. I am trying to figure out what a trigger is, but sometimes we go down and the US goes up and vice versa so I can't say that if the US overnight goes up that we will the next day like I was hoping. However in major crashes there seems to be plenty of time to get in and reap rewards, but you need cash at the time. I have cashed out because it is too volatile for me at present, so I will sit and wait. Luck will play its part I am sure, both good and bad.

When I started in ETF’s 10 years ago I had the standard suite of International ETF’s with varying percentages based on my perceived growth prospects of different countries. I dipped in to leverage growth and bear funds and it was a real eye opener and quick educator. Very difficult as you say and played havoc with ones emotions and sleep. Having not looked at bear funds for a long time I thought with the current market they may be worth a look again. As you say they move quickly and one can never predict the market, however for the monthly stock game it might be an idea. Also would force me to keep a closer look at the overall index and if I ‘feel lucky’ and the market is falling / volatile I may take a punt with a few shekels.
Gunnerguy

Smurf1976 · 2 May 2021

pozindustrial said:
it takes nerves of steel to invest in bboz because of the losses that quickly mount if the market goes up.

Never forget that BBOZ is leveraged by its very nature and will amplify % moves in the underlying market.

Your position sizing needs to take this into account since a $1000 position in BBOZ is really a roughly $2400 position in terms of how it will move (approximate figure there not precise).

If you wanted to trade it without leverage then you could reverse engineer that. Eg you want a $10,000 position so buy $4000 worth of BBOZ and that's roughly correct. If your $4000 becomes $5000 then view that as a 10% gain in $10,000 not a 25% gain on $4000 and vice versa if it falls.

Note that I'm not recommending that you should buy BBOZ, just drawing attention to its internal leverage.

qldfrog · 2 May 2021

Smurf1976 said:
Never forget that BBOZ is leveraged by its very nature and will amplify % moves in the underlying market.

Your position sizing needs to take this into account since a $1000 position in BBOZ is really a roughly $2400 position in terms of how it will move (approximate figure there not precise).

If you wanted to trade it without leverage then you could reverse engineer that. Eg you want a $10,000 position so buy $4000 worth of BBOZ and that's roughly correct. If your $4000 becomes $5000 then view that as a 10% gain in $10,000 not a 25% gain on $4000 and vice versa if it falls.

Note that I'm not recommending that you should buy BBOZ, just drawing attention to its internal leverage.

BEAR is similar wo leverage from memory.
And remember there is a slow erosion on bboz so a flat market will make you loose a bit, but not as bad as GEAR...well feels like so when i use it..did not investigate if it is fees, use of options etc.

pozindustrial · 2 May 2021

I have already made good money with bboz and lost those gains again so I know it works as pointed out above. The sting of losing gains still remains so I am trying to look at market patterns to indicate when to invest in it again. If you look at a typical bust it goes on for months so during those times it would be hard not to make great profits, but you need cash. I think the safest way is to buy bboz after the first day of a big drop (and pray that it continues). I will continue to try to identify patterns that tell me when to buy.

I am convinced there will be a big crash, but nobody can predict the timing. I have taken a punt and turned all investments into cash so I am ready. My situation is that I want to give my new SMSF a big boost so I can retire more comfortably in a few years. I aspire to be the person who sold out at the top and bought in at the bottom. Using leveraged investments I can profit from a downturn too which in the past could be done with bonds. Having been a bystander over many crashes I have seen that the person who pulled their money out at the top was always seen as a God (The Big Short movie is an example). After a crash the regrets are everywhere - "if only I had.... not been as greedy, listened to all the signs that were flashing in my face, got out of the fire and cooled down, taken notice of ..., put more into cash and invested as the market crashed rather than panicked to get out etc."

I view being in the market at present as dangerous. Hey, most people become more conservative in older age so don't be too harsh on me.

ducati916 · 2 May 2021

Some basic facts.

1. We have 3 asset bubbles concurrently: (a) stocks, (b) Bonds, (c) Real Estate.
2. The most important of those 3 bubbles is (b) Bonds. The other 2 bubbles key off of rates.
3. The Central Banks are (again) responsible for inflating (a) and (b) and (c) is an indirect consequence of (b).

4. Picking the TOP of the market is far, far harder than getting the bottom. The bottom, among other variables, usually occurs quite quickly after a 500 basis point easing from the Fed.

5. Why is it harder to pick the top?

Now we shift into very subjective musings.

1. At the bottom, short sellers are far quicker to cover their shorts and take profits. This provides initial buying pressure added to Central Bank support, this often brings in the Value chaps and a bottom of sorts is established. This happened in 2003, 2009, but not so much in 2020. 2020 was much more akin to 1987.

2. Because of the short seller phenom., Bear rallies are common. The inexperienced, BTD, thinking that a bottom has been reached, when all it is is largely short covering. This BTD mentality takes a while to be beaten out of people. Which makes the topping process very difficult to time. You will often be stopped out of your positions. If you are 'cash', then you have to guard against BTD, thinking it is the bottom.

3. In the GFC, blogoland was highlighting the issues from 2006, many from 2005. The final straw took until 2008 to break the market. That topping process took between 2 and 3 years. In 2000, pundits had been calling a bubble etc. since 1998. 1999 was a massive up year. So 2 years to get to that top. Many stocks outside of NASDAQ stocks, SPY held on into 2001. That was a really tricky topping process.

4. Currently there is no consensus on what the actual issue is: (i) Deflation or (ii) Inflation. Issue (i) will cause a faster topping process than (ii). So if (ii) this process could easily take another 18 mths+ before a really serious break comes, which could morph from (ii) back into (i) as the Fed. will likely move to YCC. first, triggering a type (i) break.

5. (a) Where are you going to watch for trouble, (b) what will it look like, (c) how fast will it be?

6. The problem with issues is that they are hidden until they can't be hidden any longer. So take sub-prime mortgages: everyone and their granny knew they were utter sh**e. They knew the dates of the resets. They were blowing up but being concealed. The market moved higher until really Bear Stearns blew up and LEH was the bridge too far. Not because it blew up...but because it was allowed to blow up. Had the Fed moved fast(er), the market may not have blown up to the same degree.

7. Now this time is I agree different, In 2009, the Fed. was doing $80B/month QE at the height of the crisis. Currently we are doing $120B/month.

8. The 'issue' will become live if/when Powell talks 'Taper'. I doubt that will happen until later this year, possibly even 2022.

9. Until then, for an inflationary bust, we need commodities to go far higher. They are still to cheap to trigger a bust in stocks on an inflationary basis. Or, DXY tanks massively, down into the 70's.

10. The point is: all of this will take some time. Not weeks, months if not longer. In the meantime, stocks will continue to inflate. I agree it is a horribly dangerous market currently.

11. Psychologically, you will be fighting FOMO. That is a tough fight, especially when you are waiting for a bust to get back in. Really, really hard. We will have any number of garden variety pullbacks or corrections, say 3% to 5%, possibly out to 8%. These will be BTD opportunities. The difficulty will be to give up that upside. Then, when it really is the TOP, the first wave down will bring out the conditioning to BTD. That bounce, creates the issue. The next leg down, traps many.

What might you try.

12. BBOZ is not the correct way to play this. What you need are long dated (LEAPS) PUTS. They give you the downside profit, but automatically cap your losses to the premium paid. It will allow you to sit and wait without incurring open ended losses in something like BBOZ. There is however no upside.

13. Even better, go market neutral. You limit your upside to less than being outright long. You also benefit in a crash. This is my current stance. I am 100% market neutral. I'll grab (reduced) upside, but cannot be hurt in a crash.

So this post is way longer than I intended.

jog on
duc

pozindustrial · 2 May 2021

ducati916 said:
Some basic facts.

1. We have 3 asset bubbles concurrently: (a) stocks, (b) Bonds, (c) Real Estate.
2. The most important of those 3 bubbles is (b) Bonds. The other 2 bubbles key off of rates.
3. The Central Banks are (again) responsible for inflating (a) and (b) and (c) is an indirect consequence of (b).

4. Picking the TOP of the market is far, far harder than getting the bottom. The bottom, among other variables, usually occurs quite quickly after a 500 basis point easing from the Fed.

5. Why is it harder to pick the top?

Now we shift into very subjective musings.

1. At the bottom, short sellers are far quicker to cover their shorts and take profits. This provides initial buying pressure added to Central Bank support, this often brings in the Value chaps and a bottom of sorts is established. This happened in 2003, 2009, but not so much in 2020. 2020 was much more akin to 1987.

2. Because of the short seller phenom., Bear rallies are common. The inexperienced, BTD, thinking that a bottom has been reached, when all it is is largely short covering. This BTD mentality takes a while to be beaten out of people. Which makes the topping process very difficult to time. You will often be stopped out of your positions. If you are 'cash', then you have to guard against BTD, thinking it is the bottom.

3. In the GFC, blogoland was highlighting the issues from 2006, many from 2005. The final straw took until 2008 to break the market. That topping process took between 2 and 3 years. In 2000, pundits had been calling a bubble etc. since 1998. 1999 was a massive up year. So 2 years to get to that top. Many stocks outside of NASDAQ stocks, SPY held on into 2001. That was a really tricky topping process.

4. Currently there is no consensus on what the actual issue is: (i) Deflation or (ii) Inflation. Issue (i) will cause a faster topping process than (ii). So if (ii) this process could easily take another 18 mths+ before a really serious break comes, which could morph from (ii) back into (i) as the Fed. will likely move to YCC. first, triggering a type (i) break.

5. (a) Where are you going to watch for trouble, (b) what will it look like, (c) how fast will it be?

6. The problem with issues is that they are hidden until they can't be hidden any longer. So take sub-prime mortgages: everyone and their granny knew they were utter sh**e. They knew the dates of the resets. They were blowing up but being concealed. The market moved higher until really Bear Stearns blew up and LEH was the bridge too far. Not because it blew up...but because it was allowed to blow up. Had the Fed moved fast(er), the market may not have blown up to the same degree.

7. Now this time is I agree different, In 2009, the Fed. was doing $80B/month QE at the height of the crisis. Currently we are doing $120B/month.

8. The 'issue' will become live if/when Powell talks 'Taper'. I doubt that will happen until later this year, possibly even 2022.

9. Until then, for an inflationary bust, we need commodities to go far higher. They are still to cheap to trigger a bust in stocks on an inflationary basis. Or, DXY tanks massively, down into the 70's.

10. The point is: all of this will take some time. Not weeks, months if not longer. In the meantime, stocks will continue to inflate. I agree it is a horribly dangerous market currently.

11. Psychologically, you will be fighting FOMO. That is a tough fight, especially when you are waiting for a bust to get back in. Really, really hard. We will have any number of garden variety pullbacks or corrections, say 3% to 5%, possibly out to 8%. These will be BTD opportunities. The difficulty will be to give up that upside. Then, when it really is the TOP, the first wave down will bring out the conditioning to BTD. That bounce, creates the issue. The next leg down, traps many.

What might you try.

12. BBOZ is not the correct way to play this. What you need are long dated (LEAPS) PUTS. They give you the downside profit, but automatically cap your losses to the premium paid. It will allow you to sit and wait without incurring open ended losses in something like BBOZ. There is however no upside.

13. Even better, go market neutral. You limit your upside to less than being outright long. You also benefit in a crash. This is my current stance. I am 100% market neutral. I'll grab (reduced) upside, but cannot be hurt in a crash.

So this post is way longer than I intended.

jog on
duc

Such wonderful knowledge shared, thanks. I wish I understood half of what was said, but I will now have to find out about PUTS.

basilio · 2 May 2021

Investing or gambling ?

It seems to me that the conversation around a number of topics on ASF is closer to pure gambling plays. There is little if any inherent value in the investments themselves. The process is attempting to identify stories/plays that can attract sufficient interest from punters to get onboard and be agile enough to sell before the tide goes out.

The risk is that a widespread collapse of these schemes can undermine the structures that support the real economy. Simply speaking will our banking system survive if it's exposure to a wide range of shonky deals undermines it's viability ?

Gunnerguy · 2 May 2021

ducati916 said:
Some basic facts.

1. We have 3 asset bubbles concurrently: (a) stocks, (b) Bonds, (c) Real Estate.
2. The most important of those 3 bubbles is (b) Bonds. The other 2 bubbles key off of rates.
3. The Central Banks are (again) responsible for inflating (a) and (b) and (c) is an indirect consequence of (b).

4. Picking the TOP of the market is far, far harder than getting the bottom. The bottom, among other variables, usually occurs quite quickly after a 500 basis point easing from the Fed.

5. Why is it harder to pick the top?

Now we shift into very subjective musings.

1. At the bottom, short sellers are far quicker to cover their shorts and take profits. This provides initial buying pressure added to Central Bank support, this often brings in the Value chaps and a bottom of sorts is established. This happened in 2003, 2009, but not so much in 2020. 2020 was much more akin to 1987.

2. Because of the short seller phenom., Bear rallies are common. The inexperienced, BTD, thinking that a bottom has been reached, when all it is is largely short covering. This BTD mentality takes a while to be beaten out of people. Which makes the topping process very difficult to time. You will often be stopped out of your positions. If you are 'cash', then you have to guard against BTD, thinking it is the bottom.

3. In the GFC, blogoland was highlighting the issues from 2006, many from 2005. The final straw took until 2008 to break the market. That topping process took between 2 and 3 years. In 2000, pundits had been calling a bubble etc. since 1998. 1999 was a massive up year. So 2 years to get to that top. Many stocks outside of NASDAQ stocks, SPY held on into 2001. That was a really tricky topping process.

4. Currently there is no consensus on what the actual issue is: (i) Deflation or (ii) Inflation. Issue (i) will cause a faster topping process than (ii). So if (ii) this process could easily take another 18 mths+ before a really serious break comes, which could morph from (ii) back into (i) as the Fed. will likely move to YCC. first, triggering a type (i) break.

5. (a) Where are you going to watch for trouble, (b) what will it look like, (c) how fast will it be?

6. The problem with issues is that they are hidden until they can't be hidden any longer. So take sub-prime mortgages: everyone and their granny knew they were utter sh**e. They knew the dates of the resets. They were blowing up but being concealed. The market moved higher until really Bear Stearns blew up and LEH was the bridge too far. Not because it blew up...but because it was allowed to blow up. Had the Fed moved fast(er), the market may not have blown up to the same degree.

7. Now this time is I agree different, In 2009, the Fed. was doing $80B/month QE at the height of the crisis. Currently we are doing $120B/month.

8. The 'issue' will become live if/when Powell talks 'Taper'. I doubt that will happen until later this year, possibly even 2022.

9. Until then, for an inflationary bust, we need commodities to go far higher. They are still to cheap to trigger a bust in stocks on an inflationary basis. Or, DXY tanks massively, down into the 70's.

10. The point is: all of this will take some time. Not weeks, months if not longer. In the meantime, stocks will continue to inflate. I agree it is a horribly dangerous market currently.

11. Psychologically, you will be fighting FOMO. That is a tough fight, especially when you are waiting for a bust to get back in. Really, really hard. We will have any number of garden variety pullbacks or corrections, say 3% to 5%, possibly out to 8%. These will be BTD opportunities. The difficulty will be to give up that upside. Then, when it really is the TOP, the first wave down will bring out the conditioning to BTD. That bounce, creates the issue. The next leg down, traps many.

What might you try.

12. BBOZ is not the correct way to play this. What you need are long dated (LEAPS) PUTS. They give you the downside profit, but automatically cap your losses to the premium paid. It will allow you to sit and wait without incurring open ended losses in something like BBOZ. There is however no upside.

13. Even better, go market neutral. You limit your upside to less than being outright long. You also benefit in a crash. This is my current stance. I am 100% market neutral. I'll grab (reduced) upside, but cannot be hurt in a crash.

So this post is way longer than I intended.

jog on
duc

Nice post.
I agree with your comments about picking a top, taking a long time to really be the top, and your idea about Puts.
Some of my stop/losses were triggered on Friday resulting in some sales. I was 12% cash and now 25% cash.
I've been looking at options the last couple of weeks (see my other posts) just simple stuff, selling covered calls to get some income on held shares, and buying some Index calls/puts.
The old BTD has been rammed through for years. Its always tempting and nice when it works out.
I think in the current market what is required is flexibility, controlled emotions, having cash to use when you think, but ultimately holding a long term view, even longer than when the taper comes.
I remember the last taper tantrum, can't remember when it was 4,5,6 years ago ? There was a lot of volatility and emotions going up and down.
Geared GGUS has a nice graph, not surprising, and BBOZ could look similar if the market turns.
I'm still staying long, tightening my stops on those stocks that have done really well, and keeping some powder dry.
Still like the idea of options tho.

As always I have to remember that I am investing (75%) but also doing some speculation (25%) or maybe gambling.
Some would say 'Core' and 'Satellite'.

Gunnerguy

Smurf1976 · 2 May 2021

ducati916 said:
4. Picking the TOP of the market is far, far harder than getting the bottom. The bottom, among other variables, usually occurs quite quickly after a 500 basis point easing from the Fed.

5. Why is it harder to pick the top?

Now we shift into very subjective musings.

Same applies to a lot of non-financial market things too, even in nature.

Eg the top of the rain cycle gives way to drought in a very gradual manner. Rain tapers off, the ground starts to dry out, it's months after the peak before anyone's talking about a drought.

At the other end however, well it's factually correct that the end of a dry period isn't always but often is followed by a flood the occurrence of which is extremely obvious and immediately changes the situation drastically.

Bottoms are an event, tops are a process. That occurs not just in markets but also many completely unrelated things.

As a passenger, it's much easier to know that the plane has landed (bottom) than to know that you've reached the highest altitude you'll reach on that flight (top).

over9k · 3 May 2021

Addressing the elephant in the room here:

What makes you confident there's going to be a slump @pozindustrial ?

pozindustrial · 3 May 2021

over9k said:
Addressing the elephant in the room here:

What makes you confident there's going to be a slump @pozindustrial ?

I am not trying to convince anyone, just searching whatifs, this is just my personal view. It could take two years, or two weeks. Here are some videos.

From my previous posts:

"The signs of a bust I see are:
Things are way off balance. P/E ratios are off the scale, there is 'fashionable' investing and talk of easy money on the streets, the markets have continued to rise at an accelerated pace during bad economic times, fortunes have been publicized with tech stocks that lack fundamentals, historically busts follow booms (like night follows day) and this boom has gone on way too long. Even though there are whackos talking doom and gloom all over the internet competing with their opposite numbers spruiking fortune, there are some very respectable people issuing warnings with good fundamental reasons and I believe them. In my opinion it is all coming together and the longer it goes on or the higher the market rises the bigger the fall will be. That is simply the law of nature or balance. To me a bust is correctly predicted, but nobody can predict the timing accurately. I regard the present as 'High Fire Danger' times, that is my gut feeling."

"I am convinced there will be a big crash, but nobody can predict the timing. I have taken a punt and turned all investments into cash so I am ready. My situation is that I want to give my new SMSF a big boost so I can retire more comfortably in a few years. I aspire to be the person who sold out at the top and bought in at the bottom. Using leveraged investments I can profit from a downturn too which in the (high interest rate) past could be done with bonds. Having been a bystander over many crashes I have seen that the person who pulled their money out at the top was always seen as a God (The Big Short movie is an example). After a crash the regrets are everywhere - "if only I had.... not been as greedy, listened to all the signs that were flashing in my face, got out of the fire and cooled down, taken notice of ..., put more into cash and invested as the market crashed rather than panicked to get out etc."

I view being in the market at present as dangerous. Hey, most people become more conservative in older age so don't be too harsh on me."

qldfrog · 3 May 2021

pozindustrial said:
I am not trying to convince anyone, just searching whatifs, this is just my personal view. It could take two years, or two weeks. Here are some videos.

From my previous posts:

"The signs of a bust I see are:
Things are way off balance. P/E ratios are off the scale, there is 'fashionable' investing and talk of easy money on the streets, the markets have continued to rise at an accelerated pace during bad economic times, fortunes have been publicized with tech stocks that lack fundamentals, historically busts follow booms (like night follows day) and this boom has gone on way too long. Even though there are whackos talking doom and gloom all over the internet competing with their opposite numbers spruiking fortune, there are some very respectable people issuing warnings with good fundamental reasons and I believe them. In my opinion it is all coming together and the longer it goes on or the higher the market rises the bigger the fall will be. That is simply the law of nature or balance. To me a bust is correctly predicted, but nobody can predict the timing accurately. I regard the present as 'High Fire Danger' times, that is my gut feeling."

"I am convinced there will be a big crash, but nobody can predict the timing. I have taken a punt and turned all investments into cash so I am ready. My situation is that I want to give my new SMSF a big boost so I can retire more comfortably in a few years. I aspire to be the person who sold out at the top and bought in at the bottom. Using leveraged investments I can profit from a downturn too which in the (high interest rate) past could be done with bonds. Having been a bystander over many crashes I have seen that the person who pulled their money out at the top was always seen as a God (The Big Short movie is an example). After a crash the regrets are everywhere - "if only I had.... not been as greedy, listened to all the signs that were flashing in my face, got out of the fire and cooled down, taken notice of ..., put more into cash and invested as the market crashed rather than panicked to get out etc."

I view being in the market at present as dangerous. Hey, most people become more conservative in older age so don't be too harsh on me."

I do not believe anyone reasonable would rubbish your view:
The issue is : how do you counter balance exposure
Market have been overinflated for a while and be8ng pessimistic, i run up the safer holltop quite quickly, but my investment experience is that bull can have amazing resilience in front of even facts.look how long it took even for the covid crash to start.you will find posts of mine here from end December.there was 2 months of obvious in your face potentially earth catastrophic events before the bulls went to sleep, and only to recover very quickly
So what are the options
-Go 100% cash
But anyone who shop, pay council rates or insurance premiums knows it will not go far that way as real life inflation is really biting right now around 3 to 4% while you can not get 1% interest before tax...
-bonds..well i put a part of my assets in a bond balanced old style safe mix...outch.
-gold and pm..yep but gold is not immune to crash, when **** happens, everything goes down sharply
-Options and bear ETFs
They both suffer from aging decrease

So ideally you want to capture gain if any and also be protected.
I believe MrDuc @ducati916 gave some good informed advices.
I got into more bboz a couple of weeks ago but will probably reduce exposure this week if we still go nowhere.
You can not keep bboz long term, but definitively a good idea on a bear fall

One area missing is currency exposure/btc
USD tends to go up during crash, still... but that's getting challenged..as for btc..and crypto currencies..well who knows

pozindustrial · 3 May 2021

qldfrog said:
I do not believe anyone reasonable would rubbish your view:
The issue is : how do you counter balance exposure
Market have been overinflated for a while and be8ng pessimistic, i run up the safer holltop quite quickly, but my investment experience is that bull can have amazing resilience in front of even facts.look how long it took even for the covid crash to start.you will find posts of mine here from end December.there was 2 months of obvious in your face potentially earth catastrophic events before the bulls went to sleep, and only to recover very quickly
So what are the options
-Go 100% cash
But anyone who shop, pay council rates or insurance premiums knows it will not go far that way as real life inflation is really biting right now around 3 to 4% while you can not get 1% interest before tax...
-bonds..well i put a part of my assets in a bond balanced old style safe mix...outch.
-gold and pm..yep but gold is not immune to crash, when **** happens, everything goes down sharply
-Options and bear ETFs
They both suffer from aging decrease

So ideally you want to capture gain if any and also be protected.
I believe MrDuc @ducati916 gave some good informed advices.
I got into more bboz a couple of weeks ago but will probably reduce exposure this week if we still go nowhere.
You can not keep bboz long term, but definitively a good idea on a bear fall

One area missing is currency exposure/btc
USD tends to go up during crash, still... but that's getting challenged..as for btc..and crypto currencies..well who knows

Agree, Duc's post was great. I think keeping a large proportion in cash is the only way to go if you know what to do with it when things go South. Warren Buffet as everyone knows has $130B in cash and he is not financially stupid. For me, I choose 100% cash because I realise I am not experienced enough in the markets to keep investing with safety, I will try to make some extra through BBOZ when a crash happens and then take advantage of some etfs if they drop like FOOD, FUEL, GEAR and SGP which all recovered quickly after March 2020 and are in areas that might offer solid growth in the future. I personally believe I can do better by waiting with all my money than risking a large part of it to make more hay while the sun shines. Holding BBOZ is not an option for me, just another gamble which I tried and luckily broke even on before getting out. I feel guilty about doing nothing with my money on a forum that is dedicated to investing it, but discussions have been interesting.

qldfrog · 3 May 2021

pozindustrial said:
Agree, Duc's post was great. I think keeping a large proportion in cash is the only way to go if you know what to do with it when things go South. Warren Buffet as everyone knows has $130B in cash and he is not financially stupid. For me, I choose 100% cash because I realise I am not experienced enough in the markets to keep investing with safety, I will try to make some extra through BBOZ when a crash happens and then take advantage of some etfs if they drop like FOOD, FUEL, GEAR and SGP which all recovered quickly after March 2020 and are in areas that might offer solid growth in the future. I personally believe I can do better by waiting with all my money than risking a large part of it to make more hay while the sun shines. Holding BBOZ is not an option for me, just another gamble which I tried and luckily broke even on before getting out. I feel guilty about doing nothing with my money on a forum that is dedicated to investing it, but discussions have been interesting.

What about cash as usd or euro or swiss franc/yen?

pozindustrial · 3 May 2021

Too sophisticated for me and I need the cash to be readily available. The other thing is that AUD could outperform USD because our debt to gdp ratio is far better. Also, my safety is knowing I have gotten out at a high point and I have it all.

Smurf1976 · 3 May 2021

pozindustrial said:
I am not trying to convince anyone, just searching whatifs, this is just my personal view. It could take two years, or two weeks.

As someone who recalls the events of 1999-00 rather well, there's an awful lot of warning signs around at the moment indeed it's eerily similar with the same sector, tech, and much the same sort of mainstream interest and incredibly high valuations.

I won't claim to know when it'll peak but caution is warranted at this point in my view.

For the record, my trading account is presently 27% cash, 73% stocks. That was below 1% cash on 17 April and has gone up from there. That's not a recommendation, just disclosing my position. I do not hold BBOZ but have traded small amounts in the past.

over9k · 3 May 2021

Smurf1976 said:
As someone who recalls the events of 1999-00 rather well, there's an awful lot of warning signs around at the moment indeed it's eerily similar with the same sector, tech, and much the same sort of mainstream interest and incredibly high valuations.

I won't claim to know when it'll peak but caution is warranted at this point in my view.

For the record, my trading account is presently 27% cash, 73% stocks. That was below 1% cash on 17 April and has gone up from there. That's not a recommendation, just disclosing my position. I do not hold BBOZ but have traded small amounts in the past.

Mmm they were saying this 6 months ago though.

There were very clear bubble signs (endless pumps & dumps) back then vs some very strong long term tailwinds this time. Not to mention the fact that so much of it is concentrated just in the fangs alone.

They you have the very simple reality of extremely low interest rates which are stated to be extremely low for a long time keeping P/E's on the moon.

pozindustrial · 3 May 2021

Bill Gates recently sold 100% and 50% of some big stock names and bought 1. What is the sentiment around this?

over9k · 3 May 2021

You'd have to ask him that. Buffet sees a "red hot" economy for example: https://www.bloomberg.com/news/arti...ees-a-red-hot-economy-with-creeping-inflation

Gates does a lot of things - I wouldn't go shadowing his moves.

pozindustrial · 3 May 2021

I think Blind Freddie could see the economy is Red Hot. That is the problem, the signal, the warning. Doesn't mean it will crash next week or in a month or even a year, but it will crash. These bubbles always crash. Having been in business since the late 1970's I have seen this happen quite a few times.

BBOZ - BetaShares Australian Equities Strong Bear Hedge Fund

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