ETFs Of The Month: HIBL, SOXL

This month, I bought two new triple-levered ETFs - HIBL and SOXL, representing high-beta and semiconductor stocks respectively - under the investing thesis previously posted here.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 25/75 split between stocks and yield.  As seen below, it is currently 38/62.

I am in no rush to flip into yield. I would rather let my winners run forever.  However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, leveraged ETFs and/or covered call ETF/Ns. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.09T market cap
• no dividend
• $477.8B revenue
• 7% revenue growth
• $66.4B cash
• $147.3B debt
• $39.3B operating cash flow
• $-9.0B free cash flow

Microsoft (MSFT)

• $1.89T market cap
• 0.9% dividend yield
• $192.6B revenue
• 18% revenue growth
• $104.7B cash
• $78.0B debt
• $87.1B operating cash flow
• $48.9B free cash flow

Here's my current portfolio (buy, hold, and sell).  As always, I believe in all of these stocks/ETF/ETNs - until I sell them.

Microsoft (MSFT) 15.00%

Credit Suisse X-Links Crude Oil Shares Covered Call ETNs (USOI) 14.13%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 11.68%

Global X U.S. Preferred ETF (PFFD) 11.26%

Amazon (AMZN) 10.12%

Invesco NASDAQ 100 ETF (QQQM) 6.55%

Global X NASDAQ 100 Covered Call ETF (QYLD) 6.01%

Credit Suisse X-Links Silver Shares Covered Call ETN (SLVO) 5.89%

Global X Russell 2000 Covered Call ETF (RYLD) 5.16%

Global X S&P 500 Covered Call ETF (XYLD) 4.08%

Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) 3.61%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.49%

UnitedHealth Group (UNH) 1.80%

Costco Wholesale (COST) 1.69%

ProShares UltraPro QQQ (TQQQ) 0.11%

ProShares UltraPro S&P 500 (UPRO) 0.07%

ProShares UltraPro Russell 2000 (URTY) 0.06%

Direxion Daily CSI China Internet Bull 2X Shares (CWEB) 0.05%

Direxion Daily S&P Biotech Bull 3X Shares (LABU) 0.03%

Direxion Daily Semiconductor Bull 2X Shares (SOXL) 0.01%

Direxion Daily S&P 500 High Beta Bull 3X Shares (HIBL) 0.01%

ETFs Of The Month: CWEB, LABU

Back in June 2021, I asked myself the question "why not dollar-cost average monthly into triple-levered index funds for the next several decades?" - a question so good that I didn't want to know the actual answer - and began a commitment to ongoing purchases of TQQQ, UPRO, and URTY for the foreseeable future.

Nearly a year later, those "risky" investments have not blown up (yay!) and I began to look for additional leveraged investments outside of the indices.  This plan calls for all of the following:

• Monthly dollar cost averaging, a strategy that has served me well for my first two decades of investing, DCA is an absolute necessity when dealing with...
• Investment vehicles subject to significant daily/monthly volatility, which double- and triple-leveraged ETFs certainly qualify for, hence the advertised "risk".  To be clear:  the short-term downside potential is a feature, not a bug, when coupling the magic powers of DCA with...
• Massive multi-decade outperformance potential (duh).

So I put on my Warren Buffett/Rip Van Winkle hat and found two instruments of choice:  SynBio via LABU, and China via CWEB (an investment of which Charlie Munger might approve).

As one last step before diving into the pool that I had dipped my toes in, I asked myself the follow-up question:  "is this really going to work?  really?"  The short answer is yes; the long answer is here, which itself contains links to math and other details that underline the premise that I intuitively knew to be correct immediately upon asking the original question.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 25/75 split between stocks and yield.  As seen below, it is currently 41/59.

I am in no rush to flip into yield. I would rather let my winners run forever.  However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, leveraged ETFs and/or covered call ETF/Ns. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.62T market cap
• no dividend
• $469.8B revenue
• 9% revenue growth
• $96.1B cash
• $139.4B debt
• $46.3B operating cash flow
• $-0.8B free cash flow

Microsoft (MSFT)

• $2.26T market cap
• 0.8% dividend yield
• $184.9B revenue
• 20% revenue growth
• $125.4B cash
• $80.4B debt
• $83.9B operating cash flow
• $46.5B free cash flow

Here's my current portfolio (buy, hold, and sell).  As always, I believe in all of these stocks/ETF/ETNs - until I sell them.

Microsoft (MSFT) 15.54%

Amazon (AMZN) 12.01%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 11.02%

Global X U.S. Preferred ETF (PFFD) 10.62%

Xtrackers USD High Yield Corporate Bond ETF (HYLB) 10.19%
Invesco NASDAQ 100 ETF (QQQM) 6.86%

Global X NASDAQ 100 Covered Call ETF (QYLD) 6.19%

Credit Suisse X-Links Crude Oil Shares Covered Call ETNs (USOI) 5.65%

Credit Suisse X-Links Silver Shares Covered Call ETN (SLVO) 5.42%

Global X Russell 2000 Covered Call ETF (RYLD) 4.62%

Global X S&P 500 Covered Call ETF (XYLD) 3.01%

Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) 2.54%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.51%

Costco Wholesale (COST) 1.84%

UnitedHealth Group (UNH) 1.74%

ProShares UltraPro QQQ (TQQQ) 0.11%

ProShares UltraPro S&P 500 (UPRO) 0.05%

ProShares UltraPro Russell 2000 (URTY) 0.03%

Direxion Daily S&P Biotech Bull 3X Shares (LABU) 0.02%

Direxion Daily CSI China Internet Bull 2X Shares (CWEB) 0.02%

ETFs Of The Month: TQQQ, UPRO, URTY

Have you ever asked a question that you didn't want to know the "real" answer to?

Such as "why not dollar-cost average monthly into triple-levered index funds for the next several decades?"

My brief research led to the following answer:

The risk with this investing strategy is to sell too late.  An 80-90% decline at some point in the future seems inevitable.  I will be required to time the market by "getting out when the getting is good."  Of course, if the declines occur in the early and/or middle years, DCA'ing will work its magic.

The hedge to this risk is the tiny percentile allocated numbers at the bottom of this post.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and yield. As seen below, it is currently 52/48.

I am in no rush to flip into yield. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, and/or index covered call ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.63T market cap
• no dividend
• $419.1B revenue
• 44% revenue growth
• $73.3B cash
• $101.5B debt
• $67.2B operating cash flow
• $31.4B free cash flow

Microsoft (MSFT)

• $1.87T market cap
• 0.9% dividend yield
• $160.0B revenue
• 19% revenue growth
• $125.0B cash
• $81.7B debt
• $72.7B operating cash flow
• $37.8B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Microsoft (MSFT) 13.25%

Amazon (AMZN) 12.58%

Global X U.S. Preferred ETF (PFFD) 12.57%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 12.42%

Xtrackers USD High Yield Corporate Bond ETF (HYLB) 12.34%
Invesco NASDAQ 100 ETF (QQQM) 6.42%
Alphabet (GOOGL) 5.12%

Global X NASDAQ 100 Covered Call ETF (QYLD) 3.40%

Facebook (FB) 3.10%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.89%
Intuitive Surgical (ISRG) 2.50%

Global X Russell 2000 Covered Call ETF (RYLD) 2.29%

Global X S&P 500 Covered Call ETF (XYLD) 2.19%
UnitedHealth Group (UNH) 1.46%

Visa (V) 1.31%
Costco Wholesale (COST) 1.28%

Verizon (VZ) 1.27%
AT&T (T) 1.26%

ProShares UltraPro QQQ (TQQQ) 0.03%

ProShares UltraPro Russell 2000 (URTY) 0.01%

ProShares UltraPro S&P 500 (UPRO) 0.01%

ETFs Of The Month: QYLD, RYLD, XYLD

I have sold all of my previous holdings in the iShares Core U.S. Aggregate Bond ETF (AGG) at a slight loss.  The proceeds from this sale, plus some of my existing cash reserves, were used to:

• add the usual monthly purchases of HYLB, QQQJ, QQQM, and USHY;
• add a large "catch-up" purchase to PFFD; and
• initiate purchases in three "Covered Call" ETFs:  QYLD (NASDAQ 100), RYLD (Russell 2000), and XYLD (S&P 500).

These covered call ETFs are an idea I've been looking for ever since I started investing - I've just discovered that they actually exist.  Everybody knows that on average over the long term, the market goes up 8 to 12 percent per year...just not in a straight line.  Covered call ETFs approximate these long term returns by owning the underlying assets (in these cases, stock indices) and selling calls (in these cases, stock index options) against those assets, turning capital gains into monthly dividend payments.  The prices of these ETFs follow the overall performance of the assets, with dampened volatility:  investors are forgoing the potential of excess total returns (and paying an expense ratio of 0.6%) for more immediate cash flows.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 53/47.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.54T market cap
• no dividend
• $386.1B revenue
• 44% revenue growth
• $84.4B cash
• $101.2B debt
• $66.1B operating cash flow
• $36.6B free cash flow

Microsoft (MSFT)

• $1.77T market cap
• 1.0% dividend yield
• $153.3B revenue
• 17% revenue growth
• $132.0B cash
• $82.9B debt
• $68.0B operating cash flow
• $34.8B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Microsoft (MSFT) 12.91%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 12.89%

Global X U.S. Preferred ETF (PFFD) 12.89%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 12.84%
Amazon (AMZN) 12.49%
Invesco NASDAQ 100 ETF (QQQM) 6.11%
Alphabet (GOOGL) 4.63%

Global X NASDAQ 100 Covered Call ETF (QYLD) 3.50%

Facebook (FB) 2.86%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.80%
Intuitive Surgical (ISRG) 2.28%

Global X Russell 2000 Covered Call ETF (RYLD) 2.20%

Global X S&P 500 Covered Call ETF (XYLD) 2.17%
UnitedHealth Group (UNH) 1.40%

Verizon (VZ) 1.39%
AT&T (T) 1.38%
Visa (V) 1.27%
Costco Wholesale (COST) 1.25%

(Preferred) Stock(/Bond ETF)s Of The Month: AGG, HYLB, PFFD, QQQJ, QQQM, USHY

I skipped November's post because...excuses. Here's what happened: 

• Bought more AGG, HYLB, PFFD, USHY
• Swapped my previous holdings of QQQ into mostly QQQM (just like QQQ, but with a lower expense ratio) and some QQQJ (an entirely new ETF consisting of "minor-league prospects" of the Nasdaq - it's what one might wish the Russell 2000 to be, instead of the perpetual underperformer that it is).

Detail-oriented readers will note that these same six ETFs are in the title of this post, as they were bought in December as well.

Also, a trigger sale!  Salesforce (CRM) just reported a so-so quarter and a high-priced acquisition of Slack, which sent its stock below my previously-established threshold.  First bought in October 2013 and purchased on three additional occasions, it posted a 178% gain (15% annualized).

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 56/44.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.60T market cap
• no dividend
• $347.0B revenue
• 37% revenue growth
• $68.4B cash
• $96.8B debt
• $55.3B operating cash flow
• $33.7B free cash flow

Microsoft (MSFT)

• $1.63T market cap
• 1.0% dividend yield
• $147.1B revenue
• 12% revenue growth
• $138.0B cash
• $83.2B debt
• $66.2B operating cash flow
• $32.2B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Amazon (AMZN) 13.22%
iShares Broad USD High Yield Corporate Bond ETF (USHY) 12.33%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 12.30%
iShares Core U.S. Aggregate Bond ETF (AGG) 11.07%
Microsoft (MSFT) 10.02%
Global X U.S. Preferred ETF (PFFD) 8.00%
Invesco NASDAQ 100 ETF (QQQM) 4.59%
Alphabet (GOOGL) 4.18%
Facebook (FB) 2.84%
Intuitive Surgical (ISRG) 2.41%
Adobe (ADBE) 2.05%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 1.90%
Costco Wholesale (COST) 1.35%
UnitedHealth Group (UNH) 1.32%
Visa (V) 1.27%
Autodesk (ADSK) 0.73%

(Preferred) Stock(/Bond ETF)s Of The Month: HYLB, PFFD, USHY

I'm buying yield.

In a few days, I'll receive the first dividend payments from last month's substantial turn from growth to yield. It is...dare I say...kind of exciting!


Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 58/42.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.60T market cap
• no dividend
• $321.8B revenue
• 40% revenue growth
• $71.4B cash
• $91.4B debt
• $51.2B operating cash flow
• $33.7B free cash flow

Microsoft (MSFT)

• $1.59T market cap
• 1.1% dividend yield
• $143.0B revenue
• 13% revenue growth
• $136.5B cash
• $82.1B debt
• $60.7B operating cash flow
• $34.3B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Amazon (AMZN) 13.64%
iShares Broad USD High Yield Corporate Bond ETF (USHY) 11.75%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 11.73%
iShares Core U.S. Aggregate Bond ETF (AGG) 10.79%
Microsoft (MSFT) 10.13%
Global X U.S. Preferred ETF (PFFD) 7.47%
Invesco QQQ Trust (QQQ) 3.72%
Alphabet (GOOGL) 3.52%
Facebook (FB) 2.75%
Intuitive Surgical (ISRG) 2.32%
Adobe (ADBE) 2.13%
Salesforce (CRM) 1.81%
Costco Wholesale (COST) 1.34%
Visa (V) 1.28%
UnitedHealth Group (UNH) 1.25%
Autodesk (ADSK) 0.63%

The End Of The Innocence: Sold TSLA, NVDA, AAPL, AMD

Remember when the days were long
And rolled beneath a deep blue sky
Didn't have a care in the world

I've been meaning to write my September update for a while now, but things kept on happening...

On September 1st, I bought (more) of AGG, HYLB, PFFD, and USHY.

On September 4th, the first of my recently-established stop-losses triggered for TSLA.  I used the (substantial) proceeds from this to buy (even more) AGG, HYLB, PFFD, and USHY; and also establish a new holding in QQQ.

On September 8th, my stop-loss triggered for NVDA.

On September 11th, my stop-loss triggered for AAPL and AMD.

It is difficult to overstate how important these particular stocks have been for my portfolio.

Tesla - due to both the size of the investment, and its extraordinary performance - had an especially large importance.  The gains from TSLA alone exceeded the value of my entire portfolio through the first 19 years of my investing career.

The result of these sales is a lot of cash...now my largest holding.  I plan to use the proceeds primarily towards QQQ, AGG, HYLB, PFFD, and USHY over the upcoming months.

As if that wasn't enough, the super-secret high-conviction stock in my Roth IRA was also sold on September 3rd via stop-loss trigger.  The proceeds from this sale re-established a 50/50 split between AGG and two new high-conviction stocks.  I will soon update my Grand Unified Theory accordingly.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 66/34.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.58T market cap
• no dividend
• $321.8B revenue
• 40% revenue growth
• $71.4B cash
• $91.4B debt
• $51.2B operating cash flow
• $33.7B free cash flow

Microsoft (MSFT)

• $1.58T market cap
• 1.0% dividend yield
• $143.0B revenue
• 13% revenue growth
• $136.5B cash
• $82.1B debt
• $60.7B operating cash flow
• $34.3B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Amazon (AMZN) 11.90%
iShares Broad USD High Yield Corporate Bond ETF (USHY) 9.55%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 9.53%
iShares Core U.S. Aggregate Bond ETF (AGG) 9.53%
Microsoft (MSFT) 8.87%
Global X U.S. Preferred ETF (PFFD) 4.94%
Invesco QQQ Trust (QQQ) 3.27%
Alphabet (GOOGL) 3.20%
Facebook (FB) 2.49%
Intuitive Surgical (ISRG) 2.07%
Adobe (ADBE) 1.92%
Salesforce (CRM) 1.59%
Visa (V) 1.14%
Costco Wholesale (COST) 1.13%
UnitedHealth Group (UNH) 1.06%
Autodesk (ADSK) 0.57%