Author: Patience to Invest

Crypto has taken quite the hit in the last few days. I certainly find myself unsure of where it will go next. The portion of my crypto that I have designated as America doomsday insurance I am just hanging on to and haven’t made any changes. The algorithmic portion of my portfolio that trades BITO has been out completely since it sold its last shares on August 10th, 2023 at $15.21 avoiding the roughly 10% drop since.

I have been tempted though to open another position in crypto within my portfolio that is my discretionary entry and exit section. In general I think crypto isn’t going away and when drops like this happen it does seem like a decent buying opportunity. I don’t have much in terms of free cash on hand at the moment. Though I am very familiar with options I don’t trade them frequently. So I’m going to double dip here and open a small options position on BITO in one of my small taxable accounts.

This isn’t a trade that is going to be recorded in my collective2 strategies because I am doing it in a very small roughly $10,000 taxable account that C2 doesn’t track.

This is almost more of a experiment and silver lining trade. I don’t want to miss out completely on this dip buying opportunity but don’t want to go in big, because I just really don’t know what will happen with crypto in the coming months.

The first position is designed to be a play that I can leave open until expiration without even thinking about it through December. The max loss of $1,140 is something I can live with. At that point I would be more disappointed about my buy and hold crypto portfolio which is larger than this.

The second play is designed to similarly be a loss I can live with but I gave it a shorter window to move.

These will be interesting to watch, but the truth is I really have no idea what direction BITO will take or how fast, but I am bullish on BITO in the long-run so I would say based on that the average day I can expect a positive move. Hopefully this period is a good period for crypto.

Disclaimer

This is not investment advice for you. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site contains generic information that does not have the capability of taking your personal risk tolerance, goals, assets, or other factors into account. Therefore, this site and all of its related content is for entertainment, informational, and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others. Should you decide to make or avoid any investments or use any service due to the information on this site or related information you assume full responsibility and risks and will not hold howiinvest.com it’s associated sites or its owners responsible. You also acknowledge investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

This is one of the most interesting strategies I have seen in a while. It has done extremely well. The leader is a real person you can find on LinkedIn with what seems to be a very successful career. Chris Page has also given some very interesting details in his strategy descriptions and I find them quite compelling. Plus Collective2 has verified that the user is trading with real money in their own account. The trade leader has been very helpful and informative in the forums as well. The results so far for the strategy have also been very very good.

But before I consider allocating any money to any investment strategy I try to poke holes in it then only invest in it should I remain convinced the strategy is good. So in this post I am going to document myself trying to poke holes in the strategy. If anyone including Chris is reading this I hope you know that I can be wrong. This strategy could be the best investment opportunity of the decade. So please take no offense. This is just me documenting my process. I hope it is the investment strategy of the decade and I can’t poke holes in it – resulting in me investing it myself. This is simply my process.

Links

For sake of ease I am going to post the relevant links here.

• Strategy Page
  • Live
  • WayBack
• User Page
• Forum Discussion
  • Live
  • WayBack
• LinkedIn Profile

Notes from Description

I love that the user trades this with real money. It makes me feel like there should be some motivation to not just blow up the account. I also like that the strategy is only trading S&P 500 futures. There is no weird manipulation of penny stocks etc.

I find it very interesting that the system is algorithmic and using AI that each weekend is tuned. Being tunned each weekend in my opinion isn’t inherently a good thing. It causes me to worry that things could be changed due to shorter-term performance being poor. I think performance chasing can cause problems in the long run.

I find it interesting that the strategy is running on a dedicated trading server with very small latency. I think that is interesting but it surprises me that it is mentioned. As a subscriber to a collective2 strategy there is inherently going to be some built in latency for subscribers. Therefore, it doesn’t seem to matter. I’m not saying there are not algo traders that do use latency differences to their advantage, but Collective2 in my opinion is inherently not the place for this. The trades in the strategy so far seem to not be so short in length that the 2ms latency would seem to matter though. All in all the latency discussion seems like something the user is proud of but doesn’t matter. That seems slightly odd to me.

The user says they have been trading as a full-time gig for the last five years. Normally I would just disregard that, but since they seem to be a person using their real name via linkedIn it does seem like a good thing. Of course, I never thought about this until just now but I guess it is possible someone could be utilizing the Chris Page without actually being Chris Page. You know like a catfisher. Chris Page doesn’t say anything on their LinkedIn about collective2 from what I can see. However, I think this is unlikely.

Long & Short strategies inherently cause me hesitation when a user regularly shorts appreciating assets such as stocks, treasuries, etc. The shorting concerns me because the odds are so strongly against having success shorting stocks long term. Even a really bad trader sticking to only going long has decent odds of making money. The odds of shorting the S&P 500 are much much lower.

I will say thought that I find it very impressive that the performance of the short trades is positive. That is a good sign.

The description mentions that the LIVE ROI since May 2022 is 93.5%. Now I would love to make 93.5% long-term but I can’t help think that it just isn’t realistic. So when i see see someone promote the strategy and highlight that it worries me. I’m sure I have done similar, but I don’t find it compelling. There are so many types of investment methods that give amazing returns like 93.5% for a year then do terrible in the following years.

I do like that the strategy is using the VIX index. I believe the VIX index is a decent indicator to be using, but I would like to see more details to really convince me.

Performance Analysis

At first glance this performance looks amazing and is very tantalizing. But I am here to poke holes right. The average leverage use is 4.66. That is a bit higher than I like but not crazy. Since this strategy is trading only S&P 500 futures I thought I would compare investing in the S&P500 with a buy and hold position of 4.66 leverage. The chart below is only monthly close data, so the intramonth drawdown was likely higher. Likewise the start date isn’t the exact same. I started at the end of January as the results are more conservative, but the results are actually better than the C2 strategy.

I don’t plan to buy and hold the S&P with that level of leverage, but this does seem to be evidence – not proof – that the performance of the strategy could just be a good streak. It is hard to say.

Current Conlusion

More time will be needed to show if this is really a strategy worth following for me. I have added this strategy but it just seems to plausible to me that the great performance is simply because it has been a good period of growth. For now I will wait and observe and hope to get some indication that the strategy is a good one.

Disclaimer

This is not investment advice for you. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site contains generic information that does not have the capability of taking your personal risk tolerance, goals, assets, or other factors into account. Therefore, this site and all of its related content is for entertainment, informational, and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others. Should you decide to make or avoid any investments or use any service due to the information on this site or related information you assume full responsibility and risks and will not hold howiinvest.com it’s associated sites or its owners responsible. You also acknowledge investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

If you have been following you will know that I just said I thought Ethereum may be at a good buying opportunity. Then exactly like I predicted…oh wait. Then exactly unlike I predicted Ethereum dropped pretty strongly below its 200 day moving average. That is not a good sign in my opinion, but I still find myself bullish on Ethereum. No support like a 200 day moving average is an exact yes or no indicator. If we take a look at Bitcoin it had a similar drop, but is still not quite at its 200 day moving average. However, the total crypto market cap has broken through its 200 day moving average. So we have a mix of signals here. My active trading strategies at Collective2 were mostly out of crypto already. However, my discretionary trading elsewhere does still have some crypto exposure. I am still hopeful that the bull trend in crypto continues but it certainly isn’t a great sign that the total market cap and Ethereum have both broken their 200 day moving average.

Disclaimer

This is not investment advice for you. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site contains generic information that does not have the capability of taking your personal risk tolerance, goals, assets, or other factors into account. Therefore, this site and all of its related content is for entertainment, informational, and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others. Should you decide to make or avoid any investments or use any service due to the information on this site or related information you assume full responsibility and risks and will not hold howiinvest.com it’s associated sites or its owners responsible. You also acknowledge investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

It’s impossible to know where Ethereum will go but it is currently right at its 200 day moving average. The last two times it did this it bounced off it and continued higher. I don’t know if it will go higher or lower but I think the odds are in favor of it being a good buying opportunity.

I was introduced to Robert Kiyosaki’s material as a child, and it did inspire me in some ways. Like most people he is neither all good or all bad. However, over the years I am less and less impressed with him.

A reddit user recently uploaded a tweet of his from June 2022 where he says quote

Best INVESTMENT: Cans of Tuna Fish. Inflation about to take off. Best Investments are cans of tuna & baked beans. You can’t eat gold, silver, or Bitcoin. You can eat cans of tuna and baked beans. Food most important. Starvation next problem. Invest in the solution. Take care.

Robert Kiyosaki on Twitter Jun 12, 2022

If you have already checked the answer key he was either way wrong or way too early. I’m not opposed to the idea the apocalypse is coming – I’m just opposed to the idea that someone can predict it if it is. As I like to say a broken clock is right twice a day so if an apocalypse does happen it will have been “predicted” since there are always people calling for one.

Just to document how wrong he was take a look at the image below.

I want to be very clear, it is okay to be wrong about the market but your delivery matters.

Saying “I think inflation is likely to go higher because of x, y, and z” is not the same as saying “inflation is about to take off!”

Sometimes I run into futures traders that act as though futures leverage is “free.” Aside from the risk of using leverage there is no free lunch and it isn’t ever free. Below I have taken the relationship between the front and second month E-Mini futures and converted it to an annual interest rate. The data source is a bit sporadic, but you can quickly see it follows the pattern of the fed funds interest rate. There is likely a similar relationship with spot and the front contract but because of the data feed, the second and front are much easier to graph.

Leveraged ETFs, my friend, are like roller coasters for your portfolio—only the highs are higher, and the lows might give you a wedgie. If you’ve got the risk tolerance of a daredevil and a time horizon that stretches longer than an ‘80s rock ballad, then these bad boys might just be your cup of adrenaline-infused tea. But, fair warning, buckle up and hold on tight because we’re about to dive into the wild world of leveraged ETFs, where rewards and risks collide like two clumsy synchronized swimmers.

Now, picture this: You’re sitting at your trading desk, your cape of bravado billowing behind you. You want more than just average returns; you want to make those profits scream “Whee!” as they fly sky-high. Leveraged ETFs can make that happen. With their fancy financial magic tricks and leverage powers, they aim to deliver double or even triple the daily performance of their underlying index. That means if the market goes your way, your returns will be dancing like nobody’s watching.

For the adventurers among us, leveraged ETFs can be the Holy Grail of portfolio performance. They’re like turbo boosters strapped to your investments, propelling them towards the moon. So, if you believe that certain sectors or indexes are destined for greatness, these funds can be your secret weapon to harness those gains and pump up your portfolio like a ’90s workout video.

But, hey, remember the rule of thumb: the greater the rewards, the higher the risks. And leveraged ETFs are no exception. They’re like that one friend who always takes things a bit too far—sure, they might bring excitement to the party, but they can also make your stomach churn like a tilt-a-whirl gone rogue.

One risk you gotta watch out for is amplified losses. Just as leveraged ETFs can multiply your gains, they can do the same for your losses. A prolonged downturn in the market could eat away at your investment like a pack of seagulls at a beachside picnic. So, it’s important to keep an eye on these funds like you’re guarding the last slice of pizza at a party—you don’t want to lose it!

Oh, and let’s not forget about tracking errors. These sneaky buggers can throw a wrench in your plans. Sometimes leveraged ETFs don’t quite track the intended multiple of the underlying index, resulting in surprises that are about as welcome as a mosquito at a summer barbecue. It’s like trying to follow a GPS that keeps taking you to the wrong destinations—frustrating, right?

Lastly, brace yourself for the volatility roller coaster. Leveraged ETFs are known for their wild price swings, making your heart race faster than a caffeine-infused cheetah. If you’re not prepared for these ups and downs, you might find yourself on a wild ride of emotions, shouting, “I regret everything!” faster than you can say “sell, sell, sell!”

So, my fearless friend, if you’re considering leveraged ETFs, remember to approach them with caution. Understand their mechanics, actively manage your positions, and keep an eye on your stomach as you navigate the twists and turns. And if you’re feeling overwhelmed, don’t hesitate to seek guidance from a financial advisor—they’re like the seatbelt to your investment roller coaster, keeping you secure and helping you enjoy the ride.

But hey, in the end, investing should be a mix of excitement and prudence, like trying to eat a hot dog without getting ketchup on your white shirt. So, embrace the risks, enjoy the potential rewards, and remember, even in the world of leveraged ETFs, a little laughter and a good sense of humor can go a long way.

Disclaimer

This is not investment advice for you. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site contains generic information that does not have the capability of taking your personal risk tolerance, goals, assets, or other factors into account. Therefore, this site and all of its related content is for entertainment, informational, and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others. Should you decide to make or avoid any investments or use any service due to the information on this site or related information you assume full responsibility and risks and will not hold howiinvest.com it’s associated sites or its owners responsible. You also acknowledge investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

This post was written with the assistance of ChatGPT.

Today I checked to see whether it was better to use Rocketpool or Uniswap to get rETH. I had to get way down in the decimals to see that Uniswap seemed slightly better. I got about 0.22% more rETH per ETH sent to Uniswap vs Rocketpool. This is a pretty minor difference, but certainly worth taking advantage of in the future.

The best way to reduce costs when converting from ETH to rETH seems to be waiting for network fees to be low. I did the transactions when the gas market was at about 32 gwei (cost of transactions). As can be seen in the ultrasound.money chart below. That was close to the low of the last 1 day and nearly 1/4 of what it would have been to do yesterday at a different time. Another key to consider is trying to minimize taxes. Perhaps the most effective thing to do is try and convert the ETH I have with the highest cost basis to reduce realized capital gains in the conversion. The other item to consider is reducing transactions by doing larger batches when possible.

Disclaimer

This is not investment advice for you. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site contains generic information that does not have the capability of taking your personal risk tolerance, goals, assets, or other factors into account. Therefore, this site and all of its related content is for entertainment, informational, and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others. Should you decide to make or avoid any investments or use any service due to the information on this site or related information you assume full responsibility and risks and will not hold howiinvest.com it’s associated sites or its owners responsible. You also acknowledge investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

Staking crypto is something I haven’t really dabbled in much before now. However, I have some ETH (Ethereum) that I plan to hold for a long period of time. Admittedly, I don’t know where ETH will go in terms of dollars. However, I like that ETH is a very green crypto since it has reduced its carbon emissions by 99.5%. I don’t know where crypto will go. I think a big part of how well it does will depend on government regulations, etc. However, even if things stayed as they are, I believe the long-term inflation rate for the USD may be around 2%. That seems reasonable since the Fed keeps stating that as their goal. Additionally, ETH will have an estimated burn rate (deflation) of 1.8% per year. Plus, if I allocate my ETH to a staking pool, such as the ones listed here, I may be able to earn about 3% (as of now) in additional ETH control.

Obviously, if ETH does terribly in the future due to some problem with quantum computing or being replaced by some other crypto, these yields won’t help much. However, I think the odds are not too bad for ETH to have moderate to large success over the next 10 years.

As far as purchasing the ETH, I already have it. I don’t have enough or the expertise to run my own node/validator at this time. So, I have been looking at Lido and Rocketpool. From my analysis, it seems Rocketpool is a better choice, better for the ETH community, and has a tax structure that will prevent me from having to realize yield income each year for taxes. Essentially, I can exchange my ETH for rETH, which has a dynamic conversion factor to ETH. At this time, the ETH I plan to use is not in a large unrealized profit position. Therefore, I won’t have to realize a large amount of taxable income to convert to rETH. Then, when I eventually have funds I want to spend, I can set the rETH for ETH under long-term capital gains rates.

I love that with BTC, ETH, and rETH it is possible to take full custody of them and not have exposure to an exchange like FTX or Coinbase. I have been in crypto since about 2017. I have seen massive runs up and down. I have done pretty well overall, but I think it may be time to carve out a section of my portfolio that is primarily a buy and hold venture.

I will likely try and see if I can get lower fees to convert to rETH either by using Uniswap or going directly to rocketpool. I will also be checking to see if I can get lower fees by waiting for a weekend or low demand time period. So I likely won’t make any swaps yet. I am still in the research phase, but I will likely start to get a crypto position that I intend to keep in crypto whether that is BTC, ETH, stablecoins etc. I like the idea of having a part of my net worth in an permissionless access vehicle that also isn’t stored in my home.

	RocketPool (estimated Prices now)	Uniswap (estimated prices now)
ETH	1	1
rETH	0.93684	0.93646
Transaction Cost	0.02360 ETH	0.00813017 ETH
Transaction Cost a few hours later (after original post)	0.01640 ETH	0.00433 ETH

Disclaimer

This is not investment advice for you. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site contains generic information that does not have the capability of taking your personal risk tolerance, goals, assets, or other factors into account. Therefore, this site and all of its related content is for entertainment, informational, and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others. Should you decide to make or avoid any investments or use any service due to the information on this site or related information you assume full responsibility and risks and will not hold howiinvest.com it’s associated sites or its owners responsible. You also acknowledge investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

If you want to avoid losing your money in a crash like the one Ark 1 experienced in the image below you should consider the following steps.

1. Check for Real Trades

Some strategies on collective2 are built purely on hypothetical data. Others are built on actual trade data compiled from the trade leader’s account and/or subscribers. It may seem like simulated data is enough. In some cases it is. However, there are some significant difference. If you don’t know how to tell if simulated data is reliable, then I would disregard all trades that don’t have AutoTrade history as demonstrated in the images below.

2. Check For Too Much Leverage

It has become very easy to check for leverage use on collective2. I am very happy about that. Per the screenshot below you want to be checking that there are not massive spikes in leverage use and that the overall leverage use isn’t excessive.

Disclaimer

This is not investment advice for you. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site contains generic information that does not have the capability of taking your personal risk tolerance, goals, assets, or other factors into account. Therefore, this site and all of its related content is for entertainment, informational, and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others. Should you decide to make or avoid any investments or use any service due to the information on this site or related information you assume full responsibility and risks and will not hold howiinvest.com it’s associated sites or its owners responsible. You also acknowledge investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.