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Originally Posted by bizaro86
FAH is an interesting play. They are merging with Helios, an African focused investment manager. So they will end up having exposure to the asset management business, which is a good one. That said, they are trading at a big discount, and its hard to know whether they got a fair price from Helios. I'd be pleased to have it away from Fairfax - I'm not a huge fan of their ethics after having owned FIH.U for awhile.
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There's a pretty good podcast episode on Fairfax that speaks to the macro Africa thesis and FAH in particular....it's what lead me to look into it more. I don't have much allocated to it, but it does seem like an interesting long-term diversity play.
https://www.theinvestorspodcast.com/...w-jake-taylor/
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If you're doing leveraged ETFs for a long term hold (and it this case that means longer than a day or maybe two), it might make sense to investigate call options on the underlying instead. Ie, in the money call options on QQQ would get you similar leverage, but without the path dependence issue that can badly hurt the long term returns of the leveraged etfs. Not advice, but something that might be worth looking into if that's exposure you're looking for. I personally wouldn't want leveraged tech exposure now, but I felt that way in the past and was wrong then...
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Hey, I'm always happy to take advice.
You're right, a call option on a leveraged tech ETF would've been something else, but at the time I wasn't particularly educated about options (still not if I'm honest). I personally don't mind leveraged ETFs for the long-term if I'm confident in the momentum of the sector. Leveraged ETFs like FAS, UMDD, URTY, TQQQ have been the biggest profit makers over the years for me, even though they were kept for months/years. But yes, when they fall, they fall hard and it's hard to get back to even.
I'm mostly out of leveraged tech now...because like you I'm not sure that I want to hold something leveraged on a sector that already feels very stretched. I actually shifted a good chunk of the money into ERX (2x Energy)...but this time with a 2023 call option like you suggest. That industry was/is so battered, that I think over the next two years some recovery is inevitable, which should lead to a fairly healthy impact on the ETF.