Challenge: Fastest way to lose money in the market?

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Challenge: Fastest way to lose money in the market?

Post by danielc » Thu Feb 13, 2020 11:39 am

Let's say you've hacked into your nemesis' IRA and want to make him lose as much money as possible before he discovers that his account has been compromised. So you can't just burn the money, or buy lottery tickets. You have to buy something that would normally be available in a generic non-margin brokerage account. You can buy ETFs, company stock, or mutual funds.

What would you buy to make him lose as much money as possible, as quickly as possible?

I posit that it is actually very difficult to intentionally lose money quickly in the market. Every investment exists because someone expects a profit, and the market is very efficient at making all investments have a positive expected return.

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Re: Challenge: Fastest way to lose money in the market?

Post by anon_investor » Thu Feb 13, 2020 11:44 am

Some kind of triple leveraged ETF (the kind the Vanguard does not allow you to buy commission free :beer ).

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Re: Challenge: Fastest way to lose money in the market?

Post by Stinky » Thu Feb 13, 2020 11:45 am

Front loaded mutual funds. 5+% loss on day 0.

Churn those funds. 5+% loss every time you sell and buy. Rinse and repeat.

You’ll never get to zero by taking 5% losses. But you can get close.
Last edited by Stinky on Thu Feb 13, 2020 4:35 pm, edited 2 times in total.
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Re: Challenge: Fastest way to lose money in the market?

Post by oldcomputerguy » Thu Feb 13, 2020 4:17 pm

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Re: Challenge: Fastest way to lose money in the market?

Post by andromeda2k12 » Thu Feb 13, 2020 4:26 pm

anon_investor wrote:
Thu Feb 13, 2020 11:44 am
Some kind of triple leveraged ETF (the kind the Vanguard does not allow you to buy commission free :beer ).
Buy & hold Inverse 3x leveraged S&P 500, now that’s a strategy for failure :D

Or if you want an even faster demise, high risk options play. You can have your account go to zero in only a day or two.

Edit: yes you can buy options in a Vanguard Roth IRA. And no I do not know that from personal experience

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Re: Challenge: Fastest way to lose money in the market?

Post by Lee_WSP » Thu Feb 13, 2020 4:32 pm

Short Tesla.

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Re: Challenge: Fastest way to lose money in the market?

Post by danielc » Thu Feb 13, 2020 4:38 pm

andromeda2k12 wrote:
Thu Feb 13, 2020 4:26 pm
Buy & hold Inverse 3x leveraged S&P 500, now that’s a strategy for failure :D
UPRO (3x leveraged S&P 500) has had a CAGR of 32% since inception in 2010. If it had existed in 2008 and you could market time the global financial crisis, you would have been able to lose 97%. But market crashes are famously hard to predict, and the GFC was an uncommonly bad crash.

The underlying idea behind this thread is that if one could come up with a way to make an investment lose a lot of value quickly, it should be possible to do the opposite (e.g. instead of buying X, short-sell X) to get a huge return. So I'm thinking that the efficiency of the market should prevent us from finding a reliable way to intentionally lose money; so I'm very curious to see what people come up with.

andromeda2k12 wrote:
Thu Feb 13, 2020 4:26 pm
Or if you want an even faster demise, high risk options play. You can have your account go to zero in only a day or two.

Edit: yes you can buy options in a Vanguard Roth IRA. And no I do not know that from personal experience
Tell me if I'm wrong: A high-risk options play that can wipe your position in only a day could just as easily make your nemesis filthy rich in one day. Am I right? Furthermore, the expected return of the option should be positive. If markets are even remotely efficient, we shouldn't be able to find an option with an expected negative return. Right?

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Re: Challenge: Fastest way to lose money in the market?

Post by z3r0c00l » Thu Feb 13, 2020 4:40 pm

Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Long Tesla. :twisted:

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Re: Challenge: Fastest way to lose money in the market?

Post by milktoast » Thu Feb 13, 2020 4:40 pm

No options.

Limit order to buy BURG at $10,000/share for all the money in the account.

Stock is currently thinly traded at $0.56.

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Re: Challenge: Fastest way to lose money in the market?

Post by H-Town » Thu Feb 13, 2020 4:41 pm

z3r0c00l wrote:
Thu Feb 13, 2020 4:40 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Long Tesla. :twisted:
Or both... at the wrong time.

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Re: Challenge: Fastest way to lose money in the market?

Post by Independent George » Thu Feb 13, 2020 4:42 pm

A year ago, all you would need to do is engage in a lot of rapid trades regardless of whether you gained or lost, as the commissions would eat up your balances. Now you need to be more creative - I think some kind of leveraged short seems like a recipe for disaster. I've never engaged in either, so I don't know how you'd actually go about doing it.

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Re: Challenge: Fastest way to lose money in the market?

Post by nisiprius » Thu Feb 13, 2020 4:44 pm

It's not surefire because it is possible to make money with a triple-leveraged inverse ETF if you have very good timing. And you can do "better" than the S&P 500. TZA, the Direxion Daily Small Cap Bear 3X fund, TZA, has been an even more powerful engine of wealth destruction.

Ten thousand dollars invested in the fund at inception would, today, now be worth four dollars and five cents.

The fund currently holds $304.6 million in assets. I can only wonder how many dollar had to be put in, in order to have that much left.

Some of the volatility index ETFs did even "better" but the ones that did no longer exist.

source

Image
Last edited by nisiprius on Thu Feb 13, 2020 4:45 pm, edited 1 time in total.
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Re: Challenge: Fastest way to lose money in the market?

Post by willthrill81 » Thu Feb 13, 2020 4:45 pm

Go all-in on commodity options repeatedly. Virtually guaranteed 100% loss and probably more than that.
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Re: Challenge: Fastest way to lose money in the market?

Post by teelainen » Thu Feb 13, 2020 4:46 pm

Stinky wrote:
Thu Feb 13, 2020 11:45 am
Front loaded mutual funds. 5+% loss on day 0.

Churn those funds. 5+% loss every time you sell and buy. Rinse and repeat.

You’ll never get to zero by taking 5% losses. But you can get close.
+1

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Re: Challenge: Fastest way to lose money in the market?

Post by danielc » Thu Feb 13, 2020 4:46 pm

Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Can you short sell in a margin account?

Well, even if you can't short-sell, you've given me an idea: SQQQ is a three times the inverse (-3x) daily leveraged ETF betting against the Nasdaq-100 Index. That fund has lost 99.73% of its value since inception. So that seems like the best candidate to lose money.

But that begs the question: Why does SQQQ even exist? How come it hasn't been dissolved yet?

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Re: Challenge: Fastest way to lose money in the market?

Post by Lee_WSP » Thu Feb 13, 2020 4:47 pm

z3r0c00l wrote:
Thu Feb 13, 2020 4:40 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Long Tesla. :twisted:
You can't lose more than you bet if you take an unleveraged long position. You can lose more than you bet on a bad short.

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Re: Challenge: Fastest way to lose money in the market?

Post by Lee_WSP » Thu Feb 13, 2020 4:48 pm

danielc wrote:
Thu Feb 13, 2020 4:46 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Can you short sell in a margin account?

Well, even if you can't short-sell, you've given me an idea: SQQQ is a three times the inverse (-3x) daily leveraged ETF betting against the Nasdaq-100 Index. That fund has lost 99.73% of its value since inception. So that seems like the best candidate to lose money.

But that begs the question: Why does SQQQ even exist? How come it hasn't been dissolved yet?
The Nasdaq hasn't gained 33.4% in one day, which is what would be required to wipe out the fund.

It continues to exist because traders jump in and out of it depending on whether they think the market is going to be up or down on that day.

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Re: Challenge: Fastest way to lose money in the market?

Post by z3r0c00l » Thu Feb 13, 2020 4:49 pm

Lee_WSP wrote:
Thu Feb 13, 2020 4:47 pm
z3r0c00l wrote:
Thu Feb 13, 2020 4:40 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Long Tesla. :twisted:
You can't lose more than you bet if you take an unleveraged long position. You can lose more than you bet on a bad short.
"You have to buy something that would normally be available in a generic non-margin brokerage account."

Not sure shorting was allowed here.

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Re: Challenge: Fastest way to lose money in the market?

Post by Stinky » Thu Feb 13, 2020 4:50 pm

z3r0c00l wrote:
Thu Feb 13, 2020 4:40 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Long Tesla. :twisted:
Long Tesla. With leverage.
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Re: Challenge: Fastest way to lose money in the market?

Post by veggivet » Thu Feb 13, 2020 4:51 pm

The options market offers the quickest route to zero.
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Re: Challenge: Fastest way to lose money in the market?

Post by Lee_WSP » Thu Feb 13, 2020 4:53 pm

z3r0c00l wrote:
Thu Feb 13, 2020 4:49 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:47 pm
z3r0c00l wrote:
Thu Feb 13, 2020 4:40 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Long Tesla. :twisted:
You can't lose more than you bet if you take an unleveraged long position. You can lose more than you bet on a bad short.
"You have to buy something that would normally be available in a generic non-margin brokerage account."

Not sure shorting was allowed here.
:oops: :(

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Re: Challenge: Fastest way to lose money in the market?

Post by danielc » Thu Feb 13, 2020 4:55 pm

nisiprius wrote:
Thu Feb 13, 2020 4:44 pm
It's not surefire because it is possible to make money with a triple-leveraged inverse ETF if you have very good timing. And you can do "better" than the S&P 500. TZA, the Direxion Daily Small Cap Bear 3X fund, TZA, has been an even more powerful engine of wealth destruction.

Ten thousand dollars invested in the fund at inception would, today, now be worth four dollars and five cents.

The fund currently holds $304.6 million in assets. I can only wonder how many dollar had to be put in, in order to have that much left.

Some of the volatility index ETFs did even "better" but the ones that did no longer exist.

source

Image

Impressive. TZA lost 99.15% of its value since inception. I found another example: SQQQ (ProShares UltraPro Short QQQ = three times the inverse (-3x) of QQQ). SQQQ has lost 99.73% of its value since inception.

Ok, so here's my follow-up question: Why don't we all short SQQQ and TZA and become filthy rich overnight? When I wrote my post I thought it would be difficult to find a strategy to lose a lot of money because any such strategy can be turned into a strategy to beat the market. But evidently I'm wrong; SQQQ and TZA do exist.

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Re: Challenge: Fastest way to lose money in the market?

Post by BeBH65 » Thu Feb 13, 2020 4:56 pm

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Best way to lose $200 in taxable income?
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Re: Challenge: Fastest way to lose money in the market?

Post by PluckyDucky » Thu Feb 13, 2020 4:57 pm

zero-day way OTM options.

99.999% chance of ruin in 1 day

0.0001% chance of fantastic success in 1 day.

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Re: Challenge: Fastest way to lose money in the market?

Post by PluckyDucky » Thu Feb 13, 2020 5:01 pm

danielc wrote:
Thu Feb 13, 2020 4:38 pm
Tell me if I'm wrong: A high-risk options play that can wipe your position in only a day could just as easily make your nemesis filthy rich in one day. Am I right? Furthermore, the expected return of the option should be positive. If markets are even remotely efficient, we shouldn't be able to find an option with an expected negative return. Right?
Wrong, you can buy far OTM options all day long because brokers/market makers like free money. However, you generally can't sell these unless you get lucky and find some doofus buying them while your order is pending.

On the very slim off chance that there is a 20% jump in one day, then sure, fantastic success. Or 20% each in 2 days like TSLA last week. :twisted:


ETA: To add some reality,

MSFT Feb 21 265 Calls are $0.01 each. The "chance of profit" if you sold them is 99.89% according to Robinhood.

However, you can't sell them, because there are no buyers. On the other hand, you can buy them, because there are sellers. Broker/Marketmaker will take advantage of you for the very slim chance that you could win.
Last edited by PluckyDucky on Thu Feb 13, 2020 5:05 pm, edited 1 time in total.

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Re: Challenge: Fastest way to lose money in the market?

Post by skepticalobserver » Thu Feb 13, 2020 5:01 pm

Naked S&P puts. It works!

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Re: Challenge: Fastest way to lose money in the market?

Post by MotoTrojan » Thu Feb 13, 2020 5:04 pm

danielc wrote:
Thu Feb 13, 2020 4:46 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Can you short sell in a margin account?

Well, even if you can't short-sell, you've given me an idea: SQQQ is a three times the inverse (-3x) daily leveraged ETF betting against the Nasdaq-100 Index. That fund has lost 99.73% of its value since inception. So that seems like the best candidate to lose money.

But that begs the question: Why does SQQQ even exist? How come it hasn't been dissolved yet?
If you could short SQQQ you'd vastly outperform TQQQ, before borrowing costs (volatility decay works for you, not against you).

SQQQ exists for short-term trades. Short-term trades don't care about long-run losses.

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Re: Challenge: Fastest way to lose money in the market?

Post by Nicolas Perrault » Thu Feb 13, 2020 5:06 pm

VXX (SP500 short futures) is the most powerful and reliable destroyer of wealth that I know of.

It has lost 6% YTD.
59% since 1 year ago
68% since 2 years ago
81% since 3 years ago
97.00% since 4 years ago
97.05% since 5 years ago
98.12% since 6 years ago
99.07% since 7 years ago
99.81% since 8 years ago
99.81% since 9 years ago
99.96% since 10 years ago
99.99% since 11 years ago
(Inception in Jan 2009.)

Realise however that if you are unlucky and there is a crash in the SP500, you could end up making your nemesis a good amount of money.

NUGT (3X leveraged gold miners) is a close second in its ability to lose a lot of money, but it is not as reliable as VXX.
-99.80% since inception in December 2010
-73% in the last 5 years, but
+90% since January 2016
(-32% since February 2016)
danielc wrote:
Thu Feb 13, 2020 4:38 pm
andromeda2k12 wrote:
Thu Feb 13, 2020 4:26 pm
Buy & hold Inverse 3x leveraged S&P 500, now that’s a strategy for failure :D
UPRO (3x leveraged S&P 500) has had a CAGR of 32% since inception in 2010. If it had existed in 2008 and you could market time the global financial crisis, you would have been able to lose 97%. But market crashes are famously hard to predict, and the GFC was an uncommonly bad crash.
UPROSIM (the simulated data of UPRO) lost 94.5% between 31 May 2007 and 28 Feb 2009, not 97%. It lost 97.5% between 31 December 1999 and 28 Feb 2009. When the crash of 2008 happened, it was still underwater from the crash of 2000.

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Re: Challenge: Fastest way to lose money in the market?

Post by andromeda2k12 » Thu Feb 13, 2020 5:10 pm

danielc wrote:
Thu Feb 13, 2020 4:38 pm
andromeda2k12 wrote:
Thu Feb 13, 2020 4:26 pm
Buy & hold Inverse 3x leveraged S&P 500, now that’s a strategy for failure :D
UPRO (3x leveraged S&P 500) has had a CAGR of 32% since inception in 2010. If it had existed in 2008 and you could market time the global financial crisis, you would have been able to lose 97%. But market crashes are famously hard to predict, and the GFC was an uncommonly bad crash.

The underlying idea behind this thread is that if one could come up with a way to make an investment lose a lot of value quickly, it should be possible to do the opposite (e.g. instead of buying X, short-sell X) to get a huge return. So I'm thinking that the efficiency of the market should prevent us from finding a reliable way to intentionally lose money; so I'm very curious to see what people come up with.

andromeda2k12 wrote:
Thu Feb 13, 2020 4:26 pm
Or if you want an even faster demise, high risk options play. You can have your account go to zero in only a day or two.

Edit: yes you can buy options in a Vanguard Roth IRA. And no I do not know that from personal experience
Tell me if I'm wrong: A high-risk options play that can wipe your position in only a day could just as easily make your nemesis filthy rich in one day. Am I right? Furthermore, the expected return of the option should be positive. If markets are even remotely efficient, we shouldn't be able to find an option with an expected negative return. Right?
I said INVERSE 3x etf, which means when the market goes up 1% it goes down 3%. Unless you happen to buy before the Great Depression it’ll lose most all of its value in 10 years.

As far as options, there are options that exist where the stock would have to double (or more) in a day to make any money otherwise they expire worthless. Nobody on the face of the earth buys these options cause they are throwing money away but you could if you were trying to lose money immediately.

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Re: Challenge: Fastest way to lose money in the market?

Post by Jags4186 » Thu Feb 13, 2020 5:12 pm

Get involved with a Ponzi scheme. The money is gone the second you deposit it.

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Re: Challenge: Fastest way to lose money in the market?

Post by danielc » Thu Feb 13, 2020 5:12 pm

Nicolas Perrault wrote:
Thu Feb 13, 2020 5:06 pm
VXX (SP500 short futures) is the most powerful and reliable destroyer of wealth that I know of.

It has lost 6% YTD.
59% since 1 year ago
68% since 2 years ago
81% since 3 years ago
97.00% since 4 years ago
97.05% since 5 years ago
98.12% since 6 years ago
99.07% since 7 years ago
99.81% since 8 years ago
99.81% since 9 years ago
99.96% since 10 years ago
99.99% since 11 years ago
(Inception in Jan 2009.)

Realise however that if you are unlucky and there is a crash in the SP500, you could end up making your nemesis a good amount of money.

NUGT (3X leveraged gold miners) is a close second in its ability to lose a lot of money, but it is not as reliable as VXX.
-99.80% since inception in December 2010
-73% in the last 5 years, but
+90% since January 2016
(-32% since February 2016)
danielc wrote:
Thu Feb 13, 2020 4:38 pm
andromeda2k12 wrote:
Thu Feb 13, 2020 4:26 pm
Buy & hold Inverse 3x leveraged S&P 500, now that’s a strategy for failure :D
UPRO (3x leveraged S&P 500) has had a CAGR of 32% since inception in 2010. If it had existed in 2008 and you could market time the global financial crisis, you would have been able to lose 97%. But market crashes are famously hard to predict, and the GFC was an uncommonly bad crash.
UPROSIM (the simulated data of UPRO) lost 94.5% between 31 May 2007 and 28 Feb 2009, not 97%. It lost 97.5% between 31 December 1999 and 28 Feb 2009. When the crash of 2008 happened, it was still underwater from the crash of 2000.
Ah, thanks for the correction.

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Re: Challenge: Fastest way to lose money in the market?

Post by danielc » Thu Feb 13, 2020 5:15 pm

Jags4186 wrote:
Thu Feb 13, 2020 5:12 pm
Get involved with a Ponzi scheme. The money is gone the second you deposit it.
It has to be something you can buy in a non-margin brokerage account. In the outside world it's easy to lose money: Just set it on fire. My motivation for this thread was to probe the limits of efficient markets. If markets are remotely efficient, is there room for investments that are very likely to lose money?

Apparently the answer is yes: Negative triple leveraged ETFs like TZA and SQQQ.

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Re: Challenge: Fastest way to lose money in the market?

Post by Nicolas Perrault » Thu Feb 13, 2020 5:17 pm

MotoTrojan wrote:
Thu Feb 13, 2020 5:04 pm
danielc wrote:
Thu Feb 13, 2020 4:46 pm
Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Can you short sell in a margin account?

Well, even if you can't short-sell, you've given me an idea: SQQQ is a three times the inverse (-3x) daily leveraged ETF betting against the Nasdaq-100 Index. That fund has lost 99.73% of its value since inception. So that seems like the best candidate to lose money.

But that begs the question: Why does SQQQ even exist? How come it hasn't been dissolved yet?
If you could short SQQQ you'd vastly outperform TQQQ, before borrowing costs (volatility decay works for you, not against you).

SQQQ exists for short-term trades. Short-term trades don't care about long-run losses.
Are you sure about this MotoTrojan? What about the "volatility bonus"? Since inception 10 years ago, TQQQ (3X QQQ) did +6438% and QQQ did +435%. Looks like TQQQ did far more than three times QQQ, which would suggest a volatility bonus, not volatility decay.

Since inception on 12 Feb 2010:

SQQQ: -99.91% --> x(1/111.11). Shorting SQQQ without cost would have generated x111.11 the original investment.

TQQQ: +6438% --> x128.76 the original investment

I think long TQQQ was better than short SQQQ.


Scratch that, looks like you're correct.
SQQQ (inception value 12 Feb 2010/value 13 Feb 2020): 19,543.04/16.62 = x1176
TQQQ (value 13 Feb 2020/inception value 12 Feb 2010): 113.77/1.74 = x65.39

How come shorting SQQQ outperformed long TQQQ if long TQQQ beat QQQ by more than 3X?
Last edited by Nicolas Perrault on Thu Feb 13, 2020 5:33 pm, edited 1 time in total.

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Re: Challenge: Fastest way to lose money in the market?

Post by danielc » Thu Feb 13, 2020 5:17 pm

andromeda2k12 wrote:
Thu Feb 13, 2020 5:10 pm
I said INVERSE 3x etf, which means when the market goes up 1% it goes down 3%. Unless you happen to buy before the Great Depression it’ll lose most all of its value in 10 years.
Ooops, sorry.

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Re: Challenge: Fastest way to lose money in the market?

Post by Nicolas Perrault » Thu Feb 13, 2020 5:23 pm

nisiprius wrote:
Thu Feb 13, 2020 4:44 pm
It's not surefire because it is possible to make money with a triple-leveraged inverse ETF if you have very good timing. And you can do "better" than the S&P 500. TZA, the Direxion Daily Small Cap Bear 3X fund, TZA, has been an even more powerful engine of wealth destruction.

Ten thousand dollars invested in the fund at inception would, today, now be worth four dollars and five cents.
VXX (SP500 short futures) appears to be an even more powerful destroyer of wealth. Had you invested 10,000$ at inception (30 Jan 2009) it would be worth 1.28$ today.

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Re: Challenge: Fastest way to lose money in the market?

Post by elvisimprsntr » Thu Feb 13, 2020 5:23 pm

Trading Spaces Movie.
Frozen Concentrated OJ Contracts (OJ00),
Apparently it's a real thing these days.

https://www.marketwatch.com/investing/f ... ge%20juice

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RootSki
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Re: Challenge: Fastest way to lose money in the market?

Post by RootSki » Thu Feb 13, 2020 5:26 pm

I would sign my nemesis up with Edward Jones :twisted:

guyinlaw
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Re: Challenge: Fastest way to lose money in the market?

Post by guyinlaw » Thu Feb 13, 2020 5:27 pm

Triple leverage natural gas and mining stocks.. 50-50
"Equity markets could get worse if the slowdown extends further, but also realize that the markets will rebound far before economic data improve."

PluckyDucky
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Re: Challenge: Fastest way to lose money in the market?

Post by PluckyDucky » Thu Feb 13, 2020 5:32 pm

Even better.

Before putting in buy orders in your Nemesis's account for zero-day far OTM options, put in sell orders in your account.

Then you get all his money.

langlands
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Re: Challenge: Fastest way to lose money in the market?

Post by langlands » Thu Feb 13, 2020 5:35 pm

danielc wrote:
Thu Feb 13, 2020 4:55 pm
nisiprius wrote:
Thu Feb 13, 2020 4:44 pm
It's not surefire because it is possible to make money with a triple-leveraged inverse ETF if you have very good timing. And you can do "better" than the S&P 500. TZA, the Direxion Daily Small Cap Bear 3X fund, TZA, has been an even more powerful engine of wealth destruction.

Ten thousand dollars invested in the fund at inception would, today, now be worth four dollars and five cents.

The fund currently holds $304.6 million in assets. I can only wonder how many dollar had to be put in, in order to have that much left.

Some of the volatility index ETFs did even "better" but the ones that did no longer exist.

source

Image

Impressive. TZA lost 99.15% of its value since inception. I found another example: SQQQ (ProShares UltraPro Short QQQ = three times the inverse (-3x) of QQQ). SQQQ has lost 99.73% of its value since inception.

Ok, so here's my follow-up question: Why don't we all short SQQQ and TZA and become filthy rich overnight? When I wrote my post I thought it would be difficult to find a strategy to lose a lot of money because any such strategy can be turned into a strategy to beat the market. But evidently I'm wrong; SQQQ and TZA do exist.
The question is are you going to double down on your short SQQQ or short TZA position? If you don't, your gains will become smaller and smaller over time and you will earn a maximum of 100% return even if you maintain your short position for a hundred years. If you do double down, think about what you're really doing. For instance, if you rebalance everyday, you're essentially shorting SQQQ at constant leverage...i.e. you're actually just long TQQQ.

AHTFY
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Re: Challenge: Fastest way to lose money in the market?

Post by AHTFY » Thu Feb 13, 2020 5:53 pm

nisiprius wrote:
Thu Feb 13, 2020 4:44 pm

source

Image
TVIX (VelocityShares Daily 2x VIX Short-Term ETN) is worse, much much worse. Down 88.46% over the last year. Rounding to the nearest one-hundredth, it's down 100.00% since inception.

https://www.morningstar.com/etfs/xnas/tvix/performance

AlohaBill
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Re: Challenge: Fastest way to lose money in the market?

Post by AlohaBill » Thu Feb 13, 2020 6:05 pm

How about investing in the Steadman funds. Fortunately, they are now defunct. Nevertheless, they were very interesting in their day. Also, not really the fastest way.

DB2
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Re: Challenge: Fastest way to lose money in the market?

Post by DB2 » Thu Feb 13, 2020 6:10 pm

Bio penny stocks.

1130Super
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Location: Minnesota

Re: Challenge: Fastest way to lose money in the market?

Post by 1130Super » Thu Feb 13, 2020 6:14 pm

andromeda2k12 wrote:
Thu Feb 13, 2020 4:26 pm
anon_investor wrote:
Thu Feb 13, 2020 11:44 am
Some kind of triple leveraged ETF (the kind the Vanguard does not allow you to buy commission free :beer ).
Buy & hold Inverse 3x leveraged S&P 500, now that’s a strategy for failure :D

Or if you want an even faster demise, high risk options play. You can have your account go to zero in only a day or two.

Edit: yes you can buy options in a Vanguard Roth IRA. And no I do not know that from personal experience
Or karma wins and he becomes super rich

Iridium
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Re: Challenge: Fastest way to lose money in the market?

Post by Iridium » Thu Feb 13, 2020 6:33 pm

danielc wrote:
Thu Feb 13, 2020 5:15 pm
Jags4186 wrote:
Thu Feb 13, 2020 5:12 pm
Get involved with a Ponzi scheme. The money is gone the second you deposit it.
It has to be something you can buy in a non-margin brokerage account. In the outside world it's easy to lose money: Just set it on fire. My motivation for this thread was to probe the limits of efficient markets. If markets are remotely efficient, is there room for investments that are very likely to lose money?

Apparently the answer is yes: Negative triple leveraged ETFs like TZA and SQQQ.
Closely related to the Ponzi is the pump and dump scheme. Hang out on some 'get rich quick' forums and wait for someone to come in and excitedly talk about how company X (traded on the pink sheets, market cap of uh under $50 M) is going to land a billion dollar contract from Tesla, Apple, some other buzzy large corporation. Wait until the stock rockets up, then invest everything you have in it (even a relatively modest investment would actually drive it up further). Wait until the letdown then sell at a loss. Market isn't efficient, because 1) it isn't efficient for a multi billion dollar fund to have its portfolio manger spending time looking at microcaps to go short a half a million dollars on (if there even are any borrowable shares) and 2) making money on a pump and dump scheme risks drawing the ire of the SEC, even if they cannot prove you had pumped the stock.

Edit: In case it isn't clear: this is a hypothetical to reply to OP's crazy hypothetical. There are serious moral and legal issues with this approach to losing money. However, I think it is instructive example of the fact that microcaps can have exploitable inefficiencies, but it may not be 'efficient' for anyone to try to exploit them.
Last edited by Iridium on Thu Feb 13, 2020 7:33 pm, edited 1 time in total.

MoneyMarathon
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Re: Challenge: Fastest way to lose money in the market?

Post by MoneyMarathon » Thu Feb 13, 2020 7:26 pm

danielc wrote:
Thu Feb 13, 2020 4:38 pm
The underlying idea behind this thread is that if one could come up with a way to make an investment lose a lot of value quickly
Go 3x inverse S&P500 + 3x inverse long-term treasuries + 3x inverse gold and burn, baby, burn!
danielc wrote:
Thu Feb 13, 2020 4:38 pm
it should be possible to do the opposite (e.g. instead of buying X, short-sell X
I think it's possible, but I'm not sure how to borrow these hard-to-borrow names at low cost. Somebody's making money, but it ain't me. Probably the brokerage is making money because they are the ones who have the "right" to lend your loser shares, so they can extract most of the value from that right before the market's short-sellers get to play.

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whodidntante
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Re: Challenge: Fastest way to lose money in the market?

Post by whodidntante » Thu Feb 13, 2020 7:40 pm

Buy whatever Tanelorn just shorted.

Financologist
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Re: Challenge: Fastest way to lose money in the market?

Post by Financologist » Thu Feb 13, 2020 8:04 pm

An efficient market or at least a relatively efficient market makes controlling returns to the downside about as difficult as controlling returns to the upside. So this to me is a similar question to... how to maximize returns in the market. Except the answer will be the opposite. So maximize the fees that are in your control. Like trading fees and taxes, brokerage fees and margin interest and loads and expense ratios.

In short do everything a boglehead wouldn't.

Random Poster
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Re: Challenge: Fastest way to lose money in the market?

Post by Random Poster » Thu Feb 13, 2020 8:17 pm

Buy my employer’s stock. It has been a terrible investment over the last 10 years—might have even been named one of the worst investments in some annual look-back list.

thx1138
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Re: Challenge: Fastest way to lose money in the market?

Post by thx1138 » Thu Feb 13, 2020 8:25 pm

Lee_WSP wrote:
Thu Feb 13, 2020 4:32 pm
Short Tesla.
Maybe that's why we haven't seen DanMahowny since September?

Other idea that worked really well for some folks was VIX...

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