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Omicron Variant Post #1: We’re F***ed, It’s Never Over

Seriously, WHO, could you people be any less helpful? We all agreed on Omicron and now we have to type Omicron all the time? Couldn’t even use Xi?

Replaced "Nu" one too many times?

Open & Welcome Thread November 2021

You're probably looking for UltraStar Deluxe. You may have to transcribe your song with the editor, but many songs have already been transcribed and are available online. Depending on the quality of your .mp3, you may still have to sync the transcription to it with the editor.

May I ask for some help getting started with crypto?

What is scalp trading?

Ether. How confident are you that it isn't already too late to invest in it?

Now is the time of the Stacking*, when the proof of the stake will release the power of the Flippening*. In the end, Ether can be number one.

Ether reached current levels in part due to the recent merge of fee burning. It could easily hit $20k by the end of next year. Squish Chaos makes a compelling case that it could briefly hit $150k or more after illiquidity caused by fee burning and the Triple Halving* due to The Merge of the proof of stake mechanism and likely simultaneous high demand from self-sustaining narrative, upcoming easier access, and expected high yield.

So, no, not too late.

How confident am I? About 15% of my portfolio. I was aiming for a bit less than that, but it's grown since I started. Epistemic status: I'm mostly aping* Squish here, so take my confidence level with a grain of salt. He could be wrong. Partially or totally. Squish says it's 90% of his portfolio though. Ether is extremely volatile, like most crypto: 90% drawdowns have happened in before. That's the size of the risk you're taking. Barbell strategy.

There are probably altcoins* with the potential to grow by greater factors, just because you'd be getting in earlier, when they're still small and have more room to grow before slowing from high–market cap limits. The question is, "Which ones?" Shitcoins* quite frequently rug pull* or implode.

*Crypto slang. (If it's not in there, Google it.)

May I ask for some help getting started with crypto?

It seems like trading competently in crypto requires some degree of proficiency across multiple fields

I mean, that helps, but you don't need all of that to make money. Risk management, an edge, and, you know, a funded account, should suffice.

What mistakes have you made?

I made the mistake of selling most of the Bitcoins I was mining at $13 to pay electricity costs. They're worth like $60k now. Paper hands. Exit strategy matters. When you're tempted to sell, maybe buy insurance instead. I then made the mistake of trying to scalp trade Bitcoins on Mt. Gox. Not your keys, not your coins.

what should I be investing in at the moment?

Totally not financial advice, but I have a lot of Ether right now ;) Also, have you considered non-crypto investments? Diversification is helpful.

Can anyone suggest quality educational resources for getting started?

Start here. Not specific to crypto, and the presentation quality is disputed, but I stand by the principles.

Any other advice, hacks, and pro-tips that may occur to you would be very much appreciated as well.

Also research Nassim Taleb’s Barbell. It's a good approach for speculation.

Bayeswatch 13: Spaceship

Then won't be ready. Ever.


Bayeswatch 12: The Singularity War

How did she remove her cornea before taking of the hazmat suit?

Bayeswatch 10: Spyware

people turns out to be have a body

be have

Betting That the S&P 500 Will Drop Over 30 Percent (i.e. Below 3029)

VIXY does have the advantage of being more granular than the VIX calls. But it also has a strong negative drift. If you hold very much of this, you will lose money quickly. Just look at the chart. Insurance is not free. I actually hold a small amount of the inverse fund, SVXY, most of the time due to its strong positive drift. (Small because of its strong negative skew). I'd say hold no more than 1-3% VIXY in a portfolio for tail insurance. The VXTH weighting schedule is also applicable to VIXY. VIXY probably isn't going to pay you much if the VIX is too high or too low.

NTSX has good tax efficiency, but it holds 90% stocks outright and 10% in 6x leveraged bond ladder, kind of the opposite of SWAN. That means you're still exposed to the tail in a bear market. SWAN is better insurance. You literally can't lose more than 10% on the LEAPS in a short period. The bond component is a separate question, but it tends to have good anticorrelation.

Betting That the S&P 500 Will Drop Over 30 Percent (i.e. Below 3029)

If someone knows the best way for an Australian to buy US Put options, please let me know.

I'm not certain, but I've heard this has been possible with Interactive Brokers at reasonable rates.

There are also some alternatives to directly buying index options worth considering.

The SWAN and ISWN ETFs are insured, but still have ~70% exposure to the upside. They do this by holding 90% bonds and using the other 10% to buy LEAPS calls with a Delta of 70, which are synthetically equivalent to a married put position (with puts at a Delta of -30). If you replace some of your portfolio with these, it would probably handle the next bear market better.

If you want more than the 70% upside, you can replace more of your shares with the LEAPS yourself. Be careful not to over-leverage with LEAPS. The idea is to replace portfolio exposure with something cheaper, so not as much money is exposed (but with similar upside), not to increase exposure when you're expecting a bear market.

Shorting an ETF that sells puts (like PUTW) is like buying puts. (There are also several ETFs that write covered calls, like XYLD, which are synthetically equivalent to selling puts.) Beware of dividends and borrowing fees. Insurance is not free.

For the tail risk, consider the VXTH index's strategy of buying VIX calls. I don't think there's an ETF for this index currently. You'd have to implement the strategy yourself.

And finally, hedging with something uncorrelated to the stock market is good for a long-term portfolio anyway. When you rebalance to your target allocations after a crash, you usually end up buying stocks low and selling the hedge medium to high. 7-20+ year Treasury bonds are a decent investment in their own right, but have actually been anti-correlated with the stock market due to the flight-to-safety effect. Gold, TIPS, and utilities also make good hedges. (Real estate has also been used, but this is a questionable choice, especially if you already own a house.) Diversification is probably wise.

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