I'm going to take a break and think of a better / new way to share my performance.
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I'm going to take a break and think of a better / new way to share my performance.
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For the first time in it's decade plus history, bitcoin surpassed $100,000 this year. Amazing!
Heads up that starting in 2025, I'm going to change this blog a bit. I want to write posts that has more substance rather than just posting my positions. Stay tuned.
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Since the election of Trump, Microstrategy has been on a regular cadence of issuing convertible bonds to purchase more bitcoin. I previously wrote about it here but didn't quite articulate it as well.
The current premise is that Microstrategy is:
We talked last month about MicroStrategy’s plan here, which is pretty straightforward. MicroStrategy is essentially a pot of Bitcoins: Currently it owns 331,200 Bitcoins, and Bitcoin is trading at around $91,000, making MicroStrategy’s pot worth about $30 billion. It also runs an enterprise software business but that hardly seems relevant. MicroStrategy’s market capitalization is about $84 billion, meaning that it trades at well over a 150% premium to the value of its Bitcoins. So it can sell $1 worth of stock, buy $1 worth of Bitcoin, and add $2.50 of market capitalization. It can create value out of nowhere.
The natural response to discovering this magical phenomenon is to ask “well, okay, but how much of this can we do?” That was MicroStrategy’s response — it would absolutely be mine! — and it hasn’t found the limit yet. It did $4.6 billion of stock sales, and $4.6 billion of Bitcoin buying, last week. Its stock was up, Bitcoin was up, and its premium to Bitcoin also went up modestly.[1]
If you can issue stock for $1 and watch your stock price go up by $2.50, why would you stop?]]>
Bitcoin seems to have found it's footing at the ~$90k level. Stocks retreated Wednesday after Federal Reserve officials dampened expectations for a December rate cut, suggesting they need more economic data before committing to easing monetary policy. I'm thinking about buying Q2'25 earnings (July / August) puts on the Nasdaq on Monday to hedge for a weaker economy once Trump's economic plans gain more clarity.
]]>Bitcoin has surpassed a new all-time record high of over $84,000:
This is on the heels of Trumps' presidential win and the expectation (hope?) that America will become the crypto capital of the world.
Following the bitcoin bull run, Microstrategy today announced that it was acquired 27,200 BTC worth just over $2 billion:
I dug into what BTC Yield, because even as a finance pro, I haven't heard of this term before. Here's how Microstrategy explains it in today's press release:
In other words, it's the delta between the BTC / DSO from two points in time -- see my scratch math here:"BTC Yield is a key performance indicator (“KPI”) that represents the percentage change period-to-period of the ratio between the Company’s bitcoin holdings and its Assumed Diluted Shares Outstanding. Assumed Diluted Shares Outstanding refers to the aggregate of the Company’s actual shares of common stock outstanding as of the end of the applicable period plus all additional shares that would result from the assumed conversion of all outstanding convertible notes, exercise of all outstanding stock option awards, and settlement of all outstanding restricted stock units and performance stock units. The Company uses BTC Yield as a KPI to help assess the performance of its strategy of acquiring bitcoin in a manner the Company believes is accretive to shareholders. The Company believes this KPI can be used to supplement an investor’s understanding of the Company’s decision to fund the purchase of bitcoin by issuing additional shares of its common stock or instruments convertible to common stock."
As a Tesla shareholder, this has been an incredible week. Look at that gain! Just a week ago, I opened a LEAP (expires Dec 2025) with a strike price of $300. We've clearly surpassed that already and it's not even Dec 2024. Whoa. I've already 2x my Tesla purchase but because I sold calls, my upside is capped to $300 (though, I did gain $55 in option premium, so my breakeven is closer to $355).
With this week's impressive run-up in the broader market, let's see if it holds into next week.
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After soaring the past few weeks, tech rebounded back to Earth. This week we saw a big reversion for Tesla and Microsoft, as earnings either met expectations or slightly missed. Thankfully, my Tesla covered call counter-balanced the negativity and put me back in the green.
We're only a few days away from the Presidential Election. All eyes are on Tuesday November 5.
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This isn't meant to get political so I just want to focus on the potential financial gains part. Also, this is not financial advice, do your own research, I am not your financial advisor, etc.
Based on the latest public polling data as of today, it's essentially a coin toss on who wins the presidential election (note: the polls are based on the public vote outcome). Robinhood recently launched a feature where you can now bet on outcomes. I got access to it earlier this week and figured, why not try it out. Very simply to use, in fact, way simpler than buying a stock or option. Only 2 clicks to fields to confirm your quantity and price, then swipe up to place the bet.
Assuming there is in fact even odds for either candidate to win, it seems to me then that Robinhood's Kalama bet of $0.42 is a good trade. Again, based on today's polls, it's a 50/50 outcome, so the contract should cost $0.50 but it's currently trading at $0.42 -- a potential gain of $0.08 per contract.
In terms of the actual payout, we'll find out on the night of November 5 which is less than a week away. I haven't been more interested in the presidential election than now (all thanks to Robinhood!).
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This is not financial advice. Do your own research. Consult a financial advisor. I am not your financial advisor.
I opened an options position today by selling 1 call with a strike price of $300 and expiration date in Dec 2025 (more than a year from now). The option premium was $51 when TSLA's current price is $267. At almost 20% upside, this felt like a good low risk trade.
In all of Tesla's history, it has traded above $300 only for a short period of time. There's a chance I could get assigned but given the upside and history, it seems unlikely. Even if I do get assigned at $300, with the options premium and strike price I would make 1.9x my money which is pretty good for a 2 year hold. With this week's runup, thanks to a great earnings call, I think the stock is temporarily overbought so I want to monetize some of that euphoria. That being said, I do plan on holding Tesla for at least a decade.
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Here's a really good example of time decay that happens every day with options. This option expires on Friday Sept 20 and is currently OTM:
The S&P 500 bounced back by 4.0% following a stunning decline of 4.2% last week. The stock market is super volatile.
I have a small position in SPY cash secured puts with a strike price of $545. It's quite ITM so I think I'll let it ride it out until Friday.
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Not much to report. Stocks were mostly flat WoW, except for Bitcoin.
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What a wild ride the past 3 weeks has been. Finally on Friday, Fed Chair Powell confirms that an interest rate cut is coming in September. Question on everyone's mind is now: By how much? Most are expecting 25 bps but there's a growing group of investors who think we need 50 bps, even 75 bps. We'll find out in less than 4 weeks.
]]>I had a covered call position with QQQ opened a few weeks ago with a strike price of $480. For most of the time it was out of the money but last week the stock jumped to the mid $470's so I decided to buy back to close a few days before the expiry date, which is today. I pocketed a couple hundred dollars by closing my position early but gave up some money since the option still had time value.
Strong performance from the Nasdaq helped the stock market recover from its losses. Quick post this week due to vacation!
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Overall portfolio fell 2.5% week-over-week which was a lot less than what I would have expected on Monday.
The Japanese government raised interest rates by 25 bps which shocked the market and sent domestic Japanese shares down 12% and affected U.S. stocks throughout Monday. However, most of the losses were trimmed by the end of the week as investors realized that the U.S. economy remains quite strong still. There was a lot of chatter about an economic collapse on Monday but that fear seems to be overblown.
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Microsoft tumbles following weaker than expected Azure cloud revenue growth [free WSJ article]
Friday's jobs report had 114k jobs created vs 175k expected. We are now entering correction territory.
I executed some QQQ covered calls at strikes of $470 and $480 expiring two and three weeks from now to capitalize on the short-term volatility. Trying to make a bit of money. QQQ closed at $448.75 today. Let's see if my options stay OTM.
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Quick post this week because I need to tuck the kids into bed. Tesla had a rough week when it reported earnings. Nasdaq overall had a really bad week, so Tesla's miss probably got exaggerated a bit as investors flocked to other small cap stocks.
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I guess fears of Mt Gox holders flooding the market with BTC was overexaggerated. In a move that went against the general tech market, bitcoin rocketed by 17% this week while the Nasdaq posted a loss of 3.6%. Why did the Nasdaq drop so precipitously? Fintwit suggests it was mainly driven by investors rotating out of tech stocks and into other industries and small cap in anticipating of a September rate cut.
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Tesla is scheduled to unveil its Robotaxi concept on 8/8 but now it's expected to be in October.
I don't think this is a launch announcement but rather announcing a project that will probably take 10+ years to materialize. Just like how long it's taking FSD to live up to its promise. We finally have some potential tech to make FSD viable.
https://www.inc.com/reuters/tesla-delays-planned-summer-robotaxi-launch-until-october.html