TLDR – I bought $170,000 worth of triple leveraged etfs FAS and SPXL in May 2010 in the depths of the Great Recession. Held for almost ten years now. I convinced myself last month to finally take profits and close both trades within a week, then valued at over $1,350,000. My reasoning was entirely political, that I doubted any resolution of the China trade war anytime soon and my conviction that the market would tank at first sign Trump, Warren or Biden would be the clear favorite to win, that the further left the Democratic candidate would be, the harder the selloff due to the looming, structural tax and budgetary changes.
What made me change my mind to not sell that week? The sudden emergence of moderate candidates in the Democratic primary. In particular, the rise of Mayor Pete in the polls in Iowa, he went from firmly in the pack of 12 to into the lead while Biden has faltered pretty dramatically. Pete hates Medicare for All and he’s called out Warren’s lack of substance in her ultra progressive program proposals. It’s clearly resonating with fiscally conservative but independent voters in the state. The second thing that happened is that Mike Bloomberg has filed for the Democratic primary in Alabama and Arkansas, with several more to come if he does decide to run. Bloomberg is as establishment an anti-tax, pro-business moderate as you can get, I’m biased in that I’ve wanted him to run for over 10 years now. Bloomberg is polling pretty terribly so far but I think he has the money and the time to make a big dent in the Super Tuesday states in March if he declares soon.
So, by holding off a month, my trade is up another ~$200,000 currently at around $1,550,000. We got the final Fed cut everyone was planning for and earnings were surprisingly solid, everyone’s refound their risk appetite I guess. i.imgur.com/AmNrICF.jpg
The new plan now is to hold into Super Tuesday, I’m willing to pay to find out how Pete and Bloomberg do in the states that matter. If Warren or Bernie emerge as the clear leaders, I am out. Trump being impeached and tried by the Senate would not impact markets much, imho. I have since adjusted my stops higher to the prices FAS and SPXL were at when I made my original thread, so worst case scenario I’m selling close to where I originally intended. We’ll see what happens.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.