US stocks have risen too much? They were at a high 10 years ago too | Author Kim Ji-hoon (Pomeppokko) [Let’s Talk]
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Does leverage recover when the index returns to its starting level?
Assume an index starts at 100, falls 20% in a day to 80, then rises 25% the next day to return to 100. A product delivering exactly 3 times each daily return starts at the same 100, falls 60% to 40, then rises 75% to 70. The index has recovered but the product has lost 30%. Anticipating a rebound is different from predicting the holding-period result of a daily-multiple product.
Check for yourself
- Is the video’s decline threshold measured from year-end or from a previous peak?
- Are there sufficient funds and an allocation ceiling for further declines, and when is that limit rebalanced?
Limits of application
This hypothetical two-day calculation excludes costs, taxes, tracking error and currency effects. Different paths need not produce the same loss; it is neither a forecast for a particular product nor an entry rule.
- What to look for
- See how a preference for US indices, automated purchases and leverage coexist in one investor’s accounts.
- Why it matters
- Separate currency, index concentration and daily-reset risks, and compare accounts using aligned cash-flow timing and realized gains and losses.
Timeline
6 segmentsThe guest describes increasing leverage as markets fall and holding some positions for the long term. Annual returns and peak-to-trough drawdowns differ, so his assumed bottom is not a loss limit. Daily-multiple ETFs compound along a return path, meaning an index rebound does not guarantee recovery.