I don't know the answer to the OP's question. I sure wish I'd bought into, say, Meta at a price less than $100 in Nov 2022. It was on my list. I bought what I thought were cheaper Chinese shares, which have done extremely well but even with my options exposure to companies like Alibaba have not outperformed simply buying and holding Meta. Anyone who simply bought into the Magnificent 7 could have done well without doing any work. It makes me a little sad, to be honest.
Most analyses of the Magnificant 7 are based on macro views, and I'm not really a "top-down" type of investor, which is great because although I have a great track record of picking winning stocks, I have a very spotty record at entering/exiting at the correct time.
You could buy a small amount of put options on QQQ, which should give you outsized protection if/when the Magnificent 7 falls relative to the broader US stock market. I used 5% of my portfolio to buy long-term put options on US tech this week. I like the risk-return calculation at this point even though I see no signs of this mania ending anytime soon. 5% of my portfolio buys me, on a delta-adjusted basis, protection for about 22% of my portfolio (I don't actually own the magnificent 7, so I think of this as a proxy for whatever US-correlated assets I hold). Vol premiums are low right now, so if it spikes, the coverage should easily be much wider.
If it doesn't work, it doesn't work. I can exit the position end of 2025 or start of 2026 and re-assess then. It's cheap protection, and what I like is that it has the chance to generate cash beyond what I have already set aside should there be a downturn at some point in the coming year.
Most analyses of the Magnificant 7 are based on macro views, and I'm not really a "top-down" type of investor, which is great because although I have a great track record of picking winning stocks, I have a very spotty record at entering/exiting at the correct time.
You could buy a small amount of put options on QQQ, which should give you outsized protection if/when the Magnificent 7 falls relative to the broader US stock market. I used 5% of my portfolio to buy long-term put options on US tech this week. I like the risk-return calculation at this point even though I see no signs of this mania ending anytime soon. 5% of my portfolio buys me, on a delta-adjusted basis, protection for about 22% of my portfolio (I don't actually own the magnificent 7, so I think of this as a proxy for whatever US-correlated assets I hold). Vol premiums are low right now, so if it spikes, the coverage should easily be much wider.
If it doesn't work, it doesn't work. I can exit the position end of 2025 or start of 2026 and re-assess then. It's cheap protection, and what I like is that it has the chance to generate cash beyond what I have already set aside should there be a downturn at some point in the coming year.
Statistics: Posted by Caduceus — Fri Feb 21, 2025 12:47 am — Replies 44 — Views 3669