The Ultimate Leverage Investment Thread

[john kane]

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Leveraged investments are for finding an opportunity, going after it using leverage to bump up the returns, and eventually getting out and back into more stable positions.

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i understand this, but say you have investment A. priced at $100. you think it is very unlikely to drop to $80. so you leveraged 5 times with a stop loss at $80.

2 years time it is at $170, as you expected. +$70. leveraging cost you 7% annually, costly you $15, so you only made $55. but you leveraged at 5 times, so youve made $275, rather than the $70 you would have.

surely it is better to leverage than not?

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I think you're looking at your stops the wrong way around. Your stop loss should be determined by the market and not how much you can afford to lose. Place your stops at a pre-determined level.

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sorry i probs didnt explain myself properly, but i try to decide on a stop loss, and then decide how much i am willing to put on it, and then leveraging accordingly. so in that sense i think it makes sense. i think it automatically then makes my portfolio weighted - those with higher volatility, so higher stop losses, are leveraged less.

im a bit annoyed still i havent jumped into silver, oil, hong kong and india before the recent jumps, makes me tempted to wait a bit for a dip, but i cant face trying to time the markets, i just want to buy and hold.

thanks for the replies, helps a lot.

[john kane]

just put a stop buy on northern rock at 192p, ill sell at 240p or so, stop loss at 130p, $50 per 1p so $3k at risk.

gogogogo northern rock tomorrow.

[CrushinFelt]

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i understand this, but say you have investment A. priced at $100. you think it is very unlikely to drop to $80. so you leveraged 5 times with a stop loss at $80.

2 years time it is at $170, as you expected. +$70. leveraging cost you 7% annually, costly you $15, so you only made $55. but you leveraged at 5 times, so youve made $275, rather than the $70 you would have.

surely it is better to leverage than not?


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You're missing my point. My point is that you should probably try to set a target price to get out. Maybe either adjust your "stop loss" up (just mentally) as the asset pirce goes up or just pick a price and say "if it goes up x% I'm getting out." I would just hate to see something go from 100 to 170 and then back down to 110 or 120 with you having given up a lot of profit.

[john kane]

ah sorry crushinfelt, i see what you mean. to be honest i would like to come up with such a plan but ill probably 'play it by ear' in that my only investments are all long term trends and when i start reading the good times are over, then ill end the position and look elsewhere (much easier said than done, but ill do my best). the stop losses are more indicative of where ill be getting out becuase the trend is no more.

ive added silver today, it shot up early, dip down a little, and ive bought just now.

also i ended my position in shorting dollar vs GBP, it was more a hedge and but i think i can find a better return in other forex positions.

so far:

spot price gold: $200 per $1 swing
spot price silver: $23 per $1 swing
JPY/USD: $330 per 1 yen swing per $1
Hong Kong index: $1 per 1 point(?) swing (currently about 31,800)
India 50 index: $4 per 1 point(?) swing (currently about 5,900)


and as a short term: $50 per 1p swing in northern rock.

total deposit so far: £12k
current balance: £16.4k

gogogogogoog.

[john kane]

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also i ended my position in shorting dollar vs GBP

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wp john...wp....fckuckufucukck!!!

[CrushinFelt]

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also i ended my position in shorting dollar vs GBP

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wp john...wp....fckuckufucukck!!!

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bad today, probably good over the next 6 months

[john kane]

yeah, some donk from BoE or something said rates would likely not be decreased for a while.

this looks like a good time to short GBP? other than JPY or CNY, what would be a good currency to long vs GBP? i can trade most currencies i think.

oil up 5% makes me almost physically ill, though gold at $795 now is awesome.

[DcifrThs]

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yeah, some donk from BoE or something said rates would likely not be decreased for a while.

this looks like a good time to short GBP? other than JPY or CNY, what would be a good currency to long vs GBP? i can trade most currencies i think.

oil up 5% makes me almost physically ill, though gold at $795 now is awesome.

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gold at 900-$950 to me is a short.

USD/GBP is a long now. $2.07 is unsustainable given the likely direction of the interest rate diffs over the next year (and given the state of the relative rate of growth int he 2 economies over the next year)

Barron

[john kane]

im going to hang on to gold for the mega long term (like years), hopefully it'll pay off. i am a bit worried how much it has shot up recently, correction likely to come, but i know not to bother trying to time the market, it's impossible.

barron, is there a particular currency you'd long over the coming months? i dont really want to do USD/GBP as i already have JPY/USD so i might as well do JPY/GBP. maybe this would be wiser? although i'd kinda like 2 currency positions on the go to balance.

up £5k now from £12k deposited since i started this a few weeks ago. sole reason has been £100 per $1 swing in gold, which has swung up $50. i also had £30 per $1 at a swing up of $25 but that was eroded by northern rock and JPY/USD recently.

fingers crossed it'll keep going well/not plummet back down to evens or worse.

[47outs]

Leveraged investing means borrowing to invest. Where does borrowing fit into your plan?

Oh wait... unless you are leveraging other peoples ideas, then I think I get it.