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Sunday, January 1, 2017

Gary is a liar and/or cannot understand basic math AND also No "Smartmoney" EVER bought 3X funds for an investment



Now that is quite a stupendous claim for someone who could not trade his way out of a paper bag.
JNUG is currently around $5.50. So Gary is implying a 180 fold (18,000%) gain approximately.
Let's look at what would happened to a HUI/Gold stock 3X fund (at $5.50) if you bought and held from November 2000 and got out right at the peak in March 2008. 3X funds did not exist back then but I am gonna assume they did. 

Here is how the calculations were done.
1) I have focused on major rallies and declines. Minor rallies and declines (chop/sideways) will reduce the final results even more as you chronically increase your position at higher prices and lower them at lower prices.

2) For every rally 3X fund rally over 100%, I have added an additional 30% of that number, as compounding increases returns. So if HUI rallied 60%, 3X should be up 180%. I have increased that to 180% multiplied by 1.3=254%. 

3) For every 30% plus decline, which would be 90% plus decline in the 3X fund, I have limited that to a 80% decline because compounding works on the way down as well and hence you never lose 100% in any one decline.

4) Values and time periods are approximate (best I could see by zooming in on an annual period) from this chart.



The HUI rallied approximately 1,386% (BTW even that is nowhere close Gary’s delusional number), can anyone guess where a 3X levered fund would land?


                                                                                                                                          Fund Value
Time Frame Initial Price Final Price % change Implied change  in 3X lev Fund Final value of    3X fund relative to period start  $     5.50
Nov 2000- May 2001  35 75 114.29% 342.86% 445.71%  $   24.51
May 2001- Nov 2001  75 60 -20.00% -60.00% 40.00%  $     9.81
Nov 2001-May 2002   60 145 141.67% 425.00% 552.50%  $   54.18
May 2002-July 2002  145 95 -34.48% -103.45% 20.00%  $   10.84
July 2002-Sep 2002  95 135 42.11% 126.32% 164.21%  $   17.79
Sep 2002-Oct 2002  135 105 -22.22% -66.67% 33.33%  $     5.93
Oct 2002-Jan 2003  105 150 42.86% 128.57% 167.14%  $     9.91
Feb 2003-Apr 2003  150 115 -23.33% -70.00% 30.00%  $     2.97
May 2003-Nov 2003  115 250 117.39% 352.17% 457.83%  $   13.62
Nov 2003-May 2004  250 165 -34.00% -102.00% 20.00%  $     2.72
May 2004-Nov 2004  165 250 51.52% 154.55% 200.91%  $     5.47
Nov 2004-May 2005  250 170 -32.00% -96.00% 20.00%  $     1.09
May 2005-Sep 2005  170 250 47.06% 141.18% 183.53%  $     2.01
Sep 2005-Nov 2005  250 215 -14.00% -42.00% 58.00%  $     1.16
Nov 2005-Feb 2006  215 350 62.79% 188.37% 244.88%  $     2.85
Feb 2006-Mar 2006  350 280 -20.00% -60.00% 40.00%  $     1.14
Mar 2006-May 2006   280 400 42.86% 128.57% 167.14%  $     1.91
May 2006-Oct 2006  400 280 -30.00% -90.00% 20.00%  $     0.38
Oct 2006-Jul 2007  280 350 25.00% 75.00% 75.00%  $     0.29
Jul 2007-Aug 2007  350 285 -18.57% -55.71% 44.29%  $     0.13
Aug 2007-Oct 2007  285 460 61.40% 184.21% 239.47%  $     0.30
Oct 2007-Dec 2007  460 380 -17.39% -52.17% 47.83%  $     0.15
Dec 2007-Mar 2008  380 520 36.84% 110.53% 143.68%  $     0.21
Final Change -96.21%
Final change in Index 1,386%
Expected Change in 3X 4,157%
Actual change in 3X fund -96.21%
Underperformance -4,253%




So Gary, you delusional fuck, explain to me how you will produce a JNUG value of over 1,000 when in the biggest bull market of a generation, it would have gone down to $0.20. How will it be up 5,000 fold from this number? Sooner or later someone will sue your miserable ass. You cannot hide under the disclaimer and then mislead people like this forever. 

Anyone who shares this link in SMT paid comment site, will have my undying gratitude. 


Happy New Year!

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