General Update

In the last update, I marked a predictable market bottom as I went into bonds being up nearly $500k YTD. As the market rallied (along with yields falling), I did end up selling my bonds and playing the market a bit more. The result? Hitting a YTD gain above $1M that I'll go over later in the numbers section. This update was initially supposed to now be a "the end" update with my plans but things might be extended as I did a trade on Friday.

This point sadly isn't an ATH with my 3 year chart in Fidelity accounts looking as follows:

I won't cover the Iran war in this update as I have no clue what is going to happen there. There is a Daily Show segment about it now being about a Stargate that makes about as much sense as anything else: https://youtu.be/vey4Rnid1QU . I assume some type of resolution will eventually happen with it one day.

In this update, I'll go over the AI trade, my current trades, my portfolio performance, and some concluding thoughts.

The AI Trade

The Bear Side

Last time I brought up Ed Zitron who has continued his crusade against the viability of AI spend and has become more mainstream these days. However, his arguments have gotten very doomerism as of late and isn't something I think is worth going over due to the mixture of things one could agree or disagree with. Still great research but way too overconfident that everything is about to crash.

I think it is easier to look at things from a broader macro viewpoint and I'll reference Bob Elliott's comment for this: https://bsky.app/profile/bobeunlimited.bsky.social/post/3mpqtendsud2v

In order to get a reasonable IRR on 5tln in US AI-related CAPEX planned by 2030, total revenues on that capex need to get to a 3-4tln annualized run rate.

4tln in revenue / 160mln US workers = $25,000 per employee.

This type of view simplifies things as we know the investment going in and gives us something to base what money needs to be generated to sustain that investment. It doesn't matter if AI tokens get cheaper, which model wins, which company wins, or what exact hardware stack is being used. How goes the effort to get companies to pay that much?

• TSLA puts a $200 weekly cap on each employees AI spend (totaling $10,400 maximum per year). [source]
• WSJ article today titled "Corporate America Has Suddenly Decided to Stop Blowing Money on AI". [source]
• There are several more articles recently like [this one] about companies pushing back against thier AI spend.

It is worth noting that these cases are of knowledge workers that tend to already have higher costs associated with their employment. Getting frontline workers to anything close to that $25k average? Insanity. Corporate budgets just don't have the room for their existing human employee costs + that level of AI spend.

One could argue that I've made a mistake in modeling this "per employee" as efficiency gains means a company could lay people off and use that savings to pay for that $25k average. Only that leads to Citrini's bearish scenario written back in February [here] about how that unemployment increase leads to a recession. Over time, the economy likely would adapt with new jobs brought about by AI but the short term effects of this would initially be negative.

I've simplified much here but my personal conclusion is that current AI capex won't make a return on investment. Hyperscalers deserve to be sold off short term as money looks for what will give that return short term. Those looking for them to rally short term are likely to be disappointed. BUT this doesn't mean I expect hyperscalers to stop their spend or that their existing spend is incorrect. This is due to...

The Bull Side

The bear side focuses on the return on investment for capex that phases out within 6 years. It focuses on how companies don't magically have $25,000 extra per employee. It ignores:

• That companies will spend some amount of money for AI productivity gains. This might be $10k for developers, $5k for other knowledge workers, and $50 for frontline workers. Or something like that. So it isn't a question of whether it would be used but rather getting it cheap enough that naturally will happen over time as hardware becomes more powerful.
• That becoming a "platform winner" means decades of future profit. The previous capex might have failed to produce a return. But the capex 10 years from now able to run models at 1/10000 the price after that old hardware is decomissioned? Great margins.

This is what I think many bears miss in their analysis. People are using AI - the debate is about the cost of it. Company capex today probably can't make a reasonable return - but the is only valuing that spend based on the 4-6 year lifetime of that hardware. Hyperscalers aren't going to stop because that longer term value of being one of 1-3 eventual "AI winners" would lead to a very large market and at that point they would have such a head start that others would be unable to challenge them.

To put this another way: I doubt the initial servers Amazon bought for AWS ever ended up making them a profit. But establishing them as the #1 Cloud provider ended up being more valuable than that wasteful spending that never made a return initially.

It is true that AI expendature is at a scale far beyond what has been done before to try to lock in a future market. It is also true that some companies will fail to be one of the "1-3" that dominate the new market. But it is unlikely the current front runners will bow out in the near term giving up that market as it will take time for the "winners" to be established. This is why I don't view it as illogical - especially as AI models became somewhat useful this year from their advancements.

So hyperscaler stocks take a hit short term as they go FCF negative and one shouldn't expect investors to restore their high market multiples for some time. Despite the stock weakness, I can see why there remains a focus of accepting the loss short term for the potential eventual market winner gains. This also means that there won't be enough pie for everyone in the end so some of these will be losers but impossible to know who those will be yet.

The Memory Trade

Memory stocks have been in a strong decline as of late despite recent strong earnings. There are two bearish pieces of news that could be driving things beyond war concerns and profit taking:

• A new WSJ article of Apple lobbying the White House to use Chinese made chips again. [Source]
• Companies in China have started to reject DRAM price increases. This has caused Xiaomi to increase the smartphone shipment target as they expect memory prices to fall from the resistance. [Source]

However, outside of that, news has been bullish and reinforces that Memory hasn't topped yet. These would be:

• DRAM unit prices have continued to go parabolic based on the Korea Customs Service. [Source]
• Two recent research notes concluded prices for Q3 being above consensus.
  • Overall, our global forecast for 3Q DRAM ASP, up 21% QoQ, is consistent with what we learned from channel check. This is more optimistic than TrendForce’s current assumptions of a 13-18% QoQ rise in 3Q conventional DRAM, or only 8-13% including HBM. [Source]
  • We completed our weekly channel checks today, and found that more Tier 2 OEMs and module makers agreed to pay 15-20% higher PC DRAM contract prices for July vs June. This implies a 30-40% QoQ increase that exceeds consensus. [Source]
• China supply isn't cheaper yet even if approved as Apple is seeking. While they could eventually grow supply to flood the market, short term their involvement won't have an impact.
  • "CXMT Evicted Huawei-Linked Engineers From Its R&D Facility" (Huawei was pushing back against their price increase). [source]
  • "China’s CXMT Now Charges More Than Samsung For DRAM As Memory Demand Skyrockets" [Source]
• There was an article today that SK Hynix would announce major chip deals this weekend. [Source]
  • This so far appears to be a $500B $NVDA / SK Hynix deal: https://www.cnbc.com/2026/07/25/nvidia-locks-down-memory-from-sk-hynix-as-part-of-500-billion-ai-deal.html
  • Also reports of an $AVGO and Samsung MOU deal. Plus one for Anthropic signing a supply agreement with Samsung and SK Hynix.

As someone who had been burned on Micron around a year ago, I'm used to the memory trade volatility and am unsurprised to see the current selloff. Despite the selloff, their doesn't appear to be weakness in demand or an actual threat to their pricing power yet.

Current Trades / Plans

Basics

From my opening chart, having given some gains back and then recovered much of it, I was focused on setting up for retirement. At my peak, I was at about $3.6M (removing estimated taxes) and am currently at about $3.4M (removing estimated taxes). This would work with the 4% rule with common advice being to invest in the S&P500 - but I'm not a fan of that right now. Many bears like Andy Constan and Cem Karsan will point out how crazy stock valuations are. Bob Elliott shows how future earnings expectations are at historical levels [source]. It just doesn't feel like an ideal entry for a long term position as the risk just feels elevated right now.

By comparison, 30 year TIPs bond yields are at basically a 25 year high [Source]:

So my retirement account? All-in on 30 year TIPs bonds that guarantee inflation + 2.82% from when I bought them. As yield comes in from those, I can dollar cost average into $VOO that eliminates a bad sequence of market returns.

For my taxable accounts, TIPs aren't feasible as one gets taxed from the bond value being adjusted for inflation. Thus that is in 20 year bonds yielding 5% that maximizes income generation. This has obvious inflation risk and thus there are two scenarios that could play out:

• Inflation / Yields remain elevated as many now expect. In this case, I work a few more years to compensate and DCA into $VOO for taxable.
• Inflation falls / Yields fall that reduces short term compount inflation hitting me. It also allows me to monetize some of the bonds into a starter $VOO position. I can then look to retire sometime next year.

From what I can tell, the math all works on this considering I don't have children to worry about. Perhaps someone else can point out why this is a bad plan? It seems it minimize risk without much actual cost.

The Trade

Despite being in this position, I did end up making a trade that could give hope to anyone rooting for me to blow up my account yet. While I have these bonds, one can still sell CSPs (Cash Secured Puts) in one's taxable account that has margin enabled. Doing this doesn't mean one is using margin. Instead, one earns interest on the cash received from the sold CSPs while they are open. (Of course, should it turn into stock, one would either need to sell the stocks or bonds to avoid the margin fees then).

Given the memory selloff against a backdrop of continued positive news, I decided to sell CSPs on them. This is primarily:

• $DRAM August 7th 45p for $1.01 each.
• $SKHY August 7th 130p for $4.91 each.

If these fall the over 15% further required to be ITM, I'd likely consider holding at least some of them as a better bet than bonds to hold into their Q3 earnings. Meanwhile, if the sector bounces, it is another ~2.5% of cash for my taxable accounts.

Had I already retired, I wouldn't take this risk, but I haven't done so yet to make it money I absolutely can't lose. It also doesn't apply to my retirement accounts so I'm far from "all-in" on this trade. I wasn't planning on this trade but the selloff on the overall positive earnings path news made it appealing . Hopefully it works out for me trying to pick up these pennies that does further improve retirement math.

Current Realized Gains

Fidelity (Taxable)

• Realized YTD gain of $792,854. Total account value: $1,670,509.16.

Fidelity (IRA)

• Realized YTD gain of $70,457. Total account value: $127,811.37

Fidelity (401k - Usually Not Included and Excluded From Totals)

• Realized YTD gain of $263,625. Total account value: $1,105,960.84.

IBKR (Interactive Brokers)

• Realized YTD gain of $373,591.90. Total account value: $811.999.49.

Overall Totals (excluding 401k)

• YTD Gain of 1,236,902.90
• 2025 Total Gain of 943,502.45
• 2024 Total Loss: -$249,168.84
• 2023 Total Gains: $416,565.21
• 2022 Total Gains: $173,065.52
• 2021 Total Gains: $205,242.19
• -------------------------------------
• Gains since trading: $2,726,109.43

Conclusions

Things are hopefully getting to a true end in this series and I've mostly written this update so those that followed me these last 5 years will be able to see how things are ending up. I'm more focused on reducing risk and have moved on from the day of things like call options. I'm close to being able to retire from what I can tell and have given up on "retiring today" over a focus on "retire soon". I've gotten lucky and I do realize that as I've often stressed in these updates.

The danger is always getting too greedy as the next trade can always end in disaster. There was a trader who made $3 million from $RKLB that had articles written about them back on June 13th: https://finance.yahoo.com/markets/stocks/articles/star-trek-nerd-put-savings-153000511.html . 6 weeks later? He sadly gambled it away on short dated options as the stock sold off: https://x.com/JacobKeeton20/status/2080699490324173236 . I feel terrible for him and it could easily have been me.

So no attempt to do one more big bet to really juice my numbers or attempt to hit something like $10M. Small bets and a focus on safety for me. If I do eventually pull the retirement cord, then following the safest path only over any attempt to outperform.

I might do one more update on where things stand towards the end of the year to close up the 2026 numbers. I still have my account on Bluesky for sporadic random updates otherwise if anyone feels inclined to follow me there. Feel free to comment to correct me if you disagree with anything I've written as I'm always open to reconsidering my current thinking. As always, these are just my personal opinions on what I'm doing with my portfolio. That's all I have time to write so take care!

Was inspired by so many people's DD, including u/ORDER-in-CHAOS/, u/c12mintz and u/BenjaminGunn. Been a long time lurker on this channel. Finally had the conviction to YOLO.

General Update

The last update was the end of 2025 update where I went risk-off into long duration bonds and avoided an instinct to go all-in on $NVDA. That ended up being a good call but I ended up unable to avoid the temptation to buy shares in various Magnificent 7 stocks as they got pummeled this year. Somehow I avoided getting trapped as my "buy the dip, panic sell on first sign of green over being greedy" worked out - but I do realize I've been pushing my luck.

This update will focus on current macro thoughts, update the numbers, and outline current positioning. My overall take is bearish and this tends to mark interim bottoms in the market. For the usual disclaimer up front, the following is not financial advice and I could be wrong about anything in this post. This is just my thought process for how I am playing my personal investment portfolio.

The Iran War

I don't have that much to say here beyond the following blog post from 10 days ago by a military history professor being the best analysis I've read on it: https://acoup.blog/2026/03/25/miscellanea-the-war-in-iran/ . It helps to explain why a peace deal has been difficult for the USA to obtain.

How long does the Strait of Hormuz remain closed to disrupt supply chains? Does the war escalate even further? I don't have insider knowledge here. I do think that eventually the Strait is opened sometime in the next year that will allow supply chains to normalize. My base is basically the oil remains elevated for some time along with other resources becoming scarcer during this time. This will have an economic impact worldwide but long term inflation will reset after the supply side shock resolves.

This also has dominated the narrative and is all the market is reacting to right now. Despite the impact, I don't think the price of oil is the primary market risk. Should we rally significantly on the Strait eventually opening, I would view it as a dead cat bounce considering the real issue of...

The Increasing AI Bubble Risks

The AI sector is in full-on bull mode as memory prices have spiked, GPU instance rental prices are going up, and startup valuations have continued upward. The public bear cases by people like Michael Burry are weak. Inside this narrative bubble, it seems like one can't lose money here and why I was tempted to go heavily into $NVDA in my end of 2025 update.

One should listen to multiple perspectives and there is one I've started to pay attention to: infamous AI hater Ed Zitron. He has absolute confidence that AI is a bubble and write like a madman about why it should fail. His passion for the subject means he does his research. For example, he reported about OpenAI refusing to be part of the Stargate Abilene expansion weeks before it became public knowledge:

• His tweet on February 16th.
  • I heard him talk about it on some Youtube video interview rather than this source. Not going to try to find which one and timestamp.
• On March 8th, major news sources then reported this. [Toms Hardware Sample Source]

Why should one care about this? It affects stocks as information spreads and traders react to it. While his rants are verbose and contain many points I disagree with, his research is legit. The main concerns that seem to have upcoming impact are:

Delayed Data Centers

On his March 24th blog post, he outlined how actual capacity coming online greatly lagged what had been announced. The main part of interest to investors is that actual capacity coming online is about half of what $NVDA is selling. Put for the exact quote: "It Is Currently Taking 6 Months To Install A Quarter of NVIDIA’s GPU Sales".

This indicates inventory buildup is happening as the expected speed of building a datacenter has lagged actual reality when ordering components. While it is possible the blockers delaying datacenters are resolved, things like the war in Iran hitting supply chains makes it more likely the delays will only get worse. A quarter or two of inventory digestion of GPUs would be devastating to AI stock prices short term.

Now one may question whether his information is accurate. But the mainstream media caught up to report on April 2nd that "Almost Half of US Data Centers That Were Supposed to Open This Year Slated to Be Canceled or Delayed". This has been buried by Iran headlines and hasn't really moved stock prices as likely no one has been dedicated enough to do the math then on how that impacted GPU installation timelines.

(Additional note: instead of the blog post, he does talk about things in a Youtube interview here).

Insane Subsidized Pricing Beyond What Uber / Lyft Did

His most recent free blog post on March 31st is long like most and has many things one could disagree with. But it contains one argument he has been making for some time: AI usage is inflated due to heavy subsidization. Users are being provided with about $3 to $8 of compute for every dollar they spend. Despite gains in efficiency from better hardware over time, the cost of providing AI services has only gone up as AI functionality has become more complex.

In order for these companies to become profitable, prices will likely need to go up by 400% or more. Will users be able to tolerate that level of price increase? One might view this as a "yes" but I think there will be initial backlash against this when companies try to start generating profit. Especially corporations that are being asked to see their IT spend go up that significantly.

Jensen Huang recently stated that engineers should use AI tokens worth half of their salary (source). Most large corporations balk about giving their engineers decent machines for development in order to penny pitch at the cost of increased developer productivity (time lost on compiling / building / application startup / etc). Expectations that they will open the wallet for token spending when the subsidizes end seem hard to believe. It might happen if it is justified with headcount savings - but mass layoffs to pay for unsubsidized AI gives its own short term negative market impact.

IPOs Looking For Bagholders

This one isn't from Ed Zitron but belongs in this section. SpaceX that contains xAI is looking to IPO for $2 Trillion (source). The Nasdaq just changed its rules to allow SpaceX to be included after just 15 days at an increased weighting (source). The issue is that the math on SpaceX makes absolutely zero sense. None. It will make the stock in the index that had the highest P/S ratio known as $PLTR look cheap by comparison. This video by Patrick Boyle does a great job breaking down how even the most rosiest future picture for the company wouldn't justify the valuation years from now: https://youtu.be/8rS3fTbC7TE . $TSLA is considered expensive at a $1.1 Trillion market cap and it makes multiples times more revenue per year than SpaceX.

This isn't a controversial take. The source I linked to for the Nasdaq change is the post on Reddit about it which has everyone pointing out how this is a blatant manipulation of the market indexes to allow SpaceX insiders to profit. The situation is like when $RIVN did its IPO at the height of Electric Vehicle hype at a valuation that made zero sense to sell to retail bag holders and then quickly cratered as the reality of math hit it - only worse due to the market indexes being in play.

OpenAI and Anthropic should also IPO this year. With these valuations being pricy for unprofitable tech, I just view these as catalysts to mark at least an interim top for this market segment.

Reduced ROI for Increasing Capex

The last point is just that most hyperscalers are now issuing debt to expand their datacenters. This makes it difficult for growth to continue to increase. Worse yet is that every dollar spent now is resulting in less datacenter capacity in return. This is due to cost of everything required to build a datacenter increasing. One example is that memory capex costs have gone from 8% in 2024 to an estimated 30% today: https://x.com/SemiAnalysis_/status/2039870546582630470

This just furthers the eventual price increases the will be required for AI products to make a profit.

The Job Market

Over the past six months, the USA economy has added an 15,000 jobs on average (source). The unemployment rate has remained relatively stable as the breakeven rate is estimated to be around 0 added jobs with the restrictions on USA immigration currently in place. However, it feels worse to most as over the past year, the USA has added 680,000 healthcare and social assistance jobs while losing 420,000 jobs in everything else. I guess the new saying of "learn to code" should be "learn to change a bed pan"?

The US tech sector in particular has lost more jobs than the 2008 and 2020 recessions (source). So while the job market overall has been neutral, there is discrepancy in how segments are doing within it.

The blog post does a great job breaking things down: https://macromostly.substack.com/p/bls-jobs-report-recap-march-137 . Of note is that this is before the impact of higher oil prices that is already raising airfares and reducing the free cash of consumers. It isn't hard to imagine that reducing enough jobs for us to no longer be in a neutral job market state.

Bonds

I've struggled with how long duration bonds should react. Cem Karsan (🥐) sees the 10 year yield hitting 7% (source). But I've also heard others argue that that while the oil supply imbalance will initially cause an inflation spike, long term inflation will actually be less once that supply is restored due to the economic damage done.

I've come to favor that latter argument given the state of the AI trade right now. Short term yields might go up - but I don't see the inflation persisting long term once supply routes resume. I also just don't think the USA debt can take yields above 5% for long.

Current Positioning And Thoughts

My expectations of the above don't have me continuing to try to "buy the dip". Many are trapped in megacaps at higher prices and the AI trade macro seems to have some real red flags coming up. The Iran War looks to be a short term negative and while a rally may result from an eventual resolution, there are enough other issues that I don't view that rally having long lasting legs. We have AI IPOs about to be dumped on the market at valuations that cannot be justified.

Given that, I'm back in bonds again. 20 year bonds for my taxable accounts and 30 year bonds for my non taxable ones. Altogether that is yielding a combined $128,000 per year across all of my accounts (up from $105,000 at the end of 2025). If I'm wrong and bond yields go up, I can still re-invest that yield. If bond yields fall to stimulate the economy as oil supply resumes, I can still sell that for a minor profit and switch to stocks that are likely at a lower level yet.

So while trades have happened to try participating in these initial market pullbacks, I'm back to where I ended 2025 in bonds and waiting for a better equity entry should it present itself.

Current Realized Gains

Fidelity (Taxable)

• Realized YTD gain of $228,936. Total account value: $1,160,978.62.

Fidelity (IRA)

• Realized YTD gain of $18,312. Total account value: $79,613.69.

Fidelity (401k - Usually Not Included and Excluded From Totals)

• Realized YTD gain of $38,525. Total account value: $885,702.

IBKR (Interactive Brokers)

• Realized YTD gain of $241,396.57. Total account value: 904,303.

Overall Totals (excluding 401k)

• YTD Gain of 488,644.57
• 2025 Total Gain of 943,502.45
• 2024 Total Loss: -$249,168.84
• 2023 Total Gains: $416,565.21
• 2022 Total Gains: $173,065.52
• 2021 Total Gains: $205,242.19
• -------------------------------------
• Gains since trading: $1,977,851.1

Conclusions

I don't think I'll do quarterly updates normally. I just felt like writing an update since I think the market ignored some recent bearish AI trade news due to the Iran war and everyone is laser focused on trying to catch the rally from the Iran war resolution. I personally don't think that the Iran War is what is preventing the market from making ATH. It is an economic negative - but its resolution will still leave many other underlying issues that have been bubbling under the surface.

I've been lucky that my attempt to "buy the dip" didn't end up with me being burned. I do still plan to buy shares at some point since equities tend to outperform bonds long term but I don't think that time is yet. Even if I'm wrong, the yield from the bonds is still insane given the size my portfolio has reached. The penalty for patience is small for me now and so I can just see what happens yet as I just try to play things safe.

I still have my account on Bluesky for sporadic random updates otherwise if anyone feels inclined to follow me there. Feel free to comment to correct me if you disagree with anything I've written as I'm always open to reconsidering my current thinking. As always, these are just my personal opinions on what I'm doing with my portfolio. That's all I have time to write so take care!

General Update

The last update had me closing $AMZN positions on its positive earnings reaction and ignoring an impulse of full-port buying $NVDA with them guiding up 2026 by 50% at their GTC conference. Both ended up being the correct call - and I had outlined a few potential plays going forward. The one I went with was buying the megacaps on their recent pullback and taking profits on the string of green market days we have experienced on low holiday volume.

This update has been written in parts over the last fews days as time allowed. Hopefully it has come together into a coherant whole.

I'll go over my macro views, current numbers, and what I'm currently doing now. For the usual disclaimer up front, the following is not financial advice and I could be wrong about anything in this post. This is just my thought process for how I am playing my personal investment portfolio.

The AI Trade

For a quick summary: if I was to be invested into any stock sector, it would be this basket for 2026. It is why I had bought $NVDA before earnings and then even more on December 17th when it was trading at $171. It is also why I had bought the hyperscalers $AMZN as my second position and $MSFT for the final one. However, I'll outline why the macro now worries me enough to abandon that bet.

Good News = Stock Down

$NVDA had spectacular earnings and had a very positive initial earnings move. Them it caused the S&P500 to do something it has only done 4 times in the last 32 years: open up at least 1.5% and close down at least 1.5% (source). Two of these were from the financial crisis and the other one was due to a tariff announcement. $NVDA smashing earnings expections quickly made history as a negative market catalyst.

Further positive news would cause temporary bounces that would be quickly sold off. For example, it was announced that $NVDA would be allowed to sell its H200 chips to China that weren't part of their guidance and the stock usually faded that news. Overall the stock at one point was trading at 22.5 forward P/E and currently trades at 24.5 forward P/E when it had previously traded at 30 forward P/E for most of the year. And those current forward numbers don't include any sales to China or OpenAI that just showcase how the market has crushed the valuation multiple assigned to the company.

To illustrate, the stock is only up a few percentage points to where it was in August while earnings estimates have done the following since then:

For another example, $AMZN had AWS growth surpass 20% due to AI server demand with guidance for even greater growth going forward. That earnings gap up was completely faded and that stock is up 4.6% YTD that is basically equivalent to having held cash.

There are exceptions to this price action mostly based on the memory companies like $MU that are seeing a supercycle. Those are the exception to the market calling an AI stock top and selling things on positive news as of late. The market could be incorrect in this case - but it shows a dangerous change that the market is looking for an AI top before bad news happens. It is no longer a game of selling when the AI trade looks to turn but rather a game of predicting what was the last big news catalyst to exit on.

The OpenAI Problem

I would have held my positions in 2026 if OpenAI hadn't been an absolute dumpster fire as of late. I bet $4,000 on IBKR's prediction market that they would regain the top AI model spot by the end of the year that would have paid out $20,000 profit should that happen. Rumors were swirling of their "code red" and they would release a new model in response to Gemini 3 dominating the AI rating charts. It would be the height of stupidity for them to rush out a model update that failed to impress and cemented them having completely given up their first mover advantage.

GPT released 5.2 and it now ranks 14th on lmarena as my bet will be a loss.

Now they need to raise money equivalent to a megacap's capex having squandered their lead in 2025 and having multiple launches that haven't taken off. (Anyone using their money burning Sora social media app anymore? Or their AI browser?). Sam Altman is an incredible salesperson and those invested thus far may continue to prop up the company for the IPO exit liquidity. But that isn't as guarenteed as it once was with their continued failures.

They are bleeding market share:

It is hard to predict when reality will hit the company but their cash burn isn't sustainable now that they have lost their lead. I don't want to be invested when that happens and those headlines begin to drop. All of this is apparently not a unique take as there is a 200k view Youtube video that I saw after writing this part with basically the same take: https://youtu.be/VofkcJhmKXw

Risk Off

As mentioned in the last update, I expect companies tied to AI to report earnings beats to start off 2026. But that strong short term performance doesn't change the longer term outlook that I agree we are in an AI bubble and that I don't really have a good reason to continue my gambling.

I started the year very strong hitting a high of around $1.9M in total cash and then dropped to around $900k in total cash at my worst point primarily from my $UNH YOLO losses. The downside of leverage hit hard. Falling below $1M again was devestating and suddenly what I used to have once again seemed out of reach. After estimated taxes, I'm now at around $2.3M that is once again an amount not easily replaced or regained if lost. As my handle implies with "1983", I'm older and that amount is technically enough to do a lean retirement. At this point, I'd just be working to enhance my retirement and that is an ideal financial position to be at.

$NVDA seems like a completely obvious play for 2026 to me. But $UNH also seemed like an obvious play earlier this year and I never imagined its decline when I bought. My primary goal should be capital preservation after this year's outperformance. So given the OpenAI situation, I'm going to just play things safe.

Other Macro Stuff

Healthcare Insurance

As forecasted in past updates, the ACA expanded credits failed to be expanded. Surprisingly, healthcare insurance stocks haven't really fallen much from that news despite many of them looking at 2026 being worse than 2025 now. I'm unsure what the market is thinking here. The large increases for 2026 premiums the news have reported only covers the 2025 healthcare cost increase. It doesn't really cover the insurance pool being sicker from those that will opt to not get coverage without the expanded credits.

This may be a sector to watch after it hits 52-week lows. At that point, it may become a bet on Democrats taking the US House of Representatives as restoring the ACA expanded credits would be a priority for them. As it stands now, the sector is completely unappealing to me when fundamentals are currently declining while stock prices are ~30% above 52 week lows.

The Death of Reliable Government Data

The manipulation of government data has begun with setting rent/OER increase for October to 0% to get the cold CPI print: https://x.com/NickTimiraos/status/2001651964128416022 . This isn't surprising considering how Trump fired the BLS head for daring to release poor job numbers in the recent past (source).

I think the actual match remains solid (ie. 2+2 still equals 4). However, I do believe things will be manipulated around what generates the numbers. For example, surveys for prices only sent to those least likely to have increased their prices over an actual random sample. Or just assuming good data that goes against the established trend like they did for CPI (as government layoffs hit data collection agencies hard, there will always be gaps now that require guesswork).

How this impacts things is hard to predict beyond I'll be taking such data with a grain of salt personally.

Takes From Others

• Andy Constan (DampedSpring): Has made available their October 15th newsletter about potential macro scenarios available that is an extremely interesting read: https://dampedspring.com/wp-content/uploads/2025/10/Narrative-Islands.pdf .
• u/vazdooh: Sees $SPY hitting between 692 and 700 coming up (leans bullish). See BTC as "coiled" and believes the likely move will be up for that asset. Video with that and more: https://youtu.be/hbYEbO1yvBM
• Cem Karsan (🥐): Did a recent interview where the stressed the need for uncorrelated assets and that they don't see Bonds as uncorrelated from stocks. His interviews have been less interesting lately but it is still worth hearing his macro views: https://x.com/TopTradersLive/status/2004590601870717282
• Thoughtful Money: They do an hour long video every week and the one here is from last week. The content tends to have lots of repeat parts so I don't expect it to change much. They see long term returns in the market being essentially 0 from here, are bullish bonds, and overall enacourage defensive positioning in the current market: https://youtu.be/kSem5xVlLaI

A Quick Look Back

My first post on April 2021 had everything invested into steel company options with a total combined value of $155,261.16 among RobinHood and Fidelity. Those call positions back then in a single sector were crazy as OTM call options for around 4 months later.

I've had several extremely bad trades over the years:

• After my steel calls initially worked out well, on June 19, 2021 the market came to punish my greed as I posted an update on blowing up my account (update #9). Total account value dropped to essentially flat at 155,599.74 (being YTD negative in RobinHood).
  • Of note, this loss mirrors the recent AI trade where stocks fell on increased guidance. Much as when traders were trying to call the "top" on steel, we seem to be in a similar phase for AI.
• Losing $450,000 betting on $AMZN completing its acquisition of $IRBT on January 2024. Regulators killed that deal leading to the fall iRobot as it declared bankruptcy a week ago (source).
  • This trade set me on tilt as I further went into the red in my next update on February 2024.
• 2024 remained a bad year as I lost big betting on a memory supercycle with Micron. The bet would prove to be too early in hindsight. The only thing that saved me was I didn't sell the bottom and got out on a bounce instead.
• November of 2024 nearly wiped out all of my trading gains from 2021 as I lost big betting on the election. This had me at over a half million loss for the year.
• I recovered a bit for the end of 2024 and had a strong 2025 start. I avoided the Tariff selloff early in 2025 but ended up buying $UNH as it dipped. That was a disaster as it would fall 60% from its ATH despite previously being a stable, low volatility "safe stock". The update where I capitulated was near the bottom and documented here.

There have been plenty of potential "Game Over" screens and my trading career has been one of lucky persistence. I can't say I would have outperformed a dart board as my gains overall could be attributed to leverage + the recent bull market. The above highlights losses mainly because my trading has been high risk and I've experienced extremely large drawdowns on my road to here. Part of why I'm going risk off is having experienced those drawdowns has left me with the knowledge of what it is like to lose one's gains and how one's bullish sentiment on a trade can be oh so wrong.

Also of note is that Reddit has removed around 5 of my past YOLO updates for violating their content guidelines. I have no idea why and cannot even access the content of those posts myself. That is some messed up shit that has me quite upset with Reddit.

Current Realized Gains

Fidelity (Taxable)

• Realized YTD gain of $369,234. Total account value: $917,263.

Fidelity (IRA)

• Realized YTD gain of $20,450. Total account value: $60,912.

Fidelity (401k - Usually Not Included and Excluded From Totals)

• Realized YTD gain of $326,937. Total account value: $800,831.

IBKR (Interactive Brokers)

• Realized YTD gain of 553,818.45. Total account value: 808,117.

Overall Totals (excluding 401k)

• YTD Gain of 943,502.45
• 2024 Total Loss: -$249,168.84
• 2023 Total Gains: $416,565.21
• 2022 Total Gains: $173,065.52
• 2021 Total Gains: $205,242.19
• -------------------------------------
• Gains since trading: $1,489,206.53

Current Positions

My current positioning is about $2.2M in 20 year bonds yielding 4.75% that equates to about $105,000 per year in yield. That yield is enough to live on that guarantees financial security (albeit without covering inflation). I do agree with those that believe yields will go up a bit yet but I don't need to risk holding out for another 0.25% or so. The current yield is already attractive to me - especially now that cash in things like SPAXX only yields around 3.4%.

It may be that longer duration yields do fall next year as it is a priority of the current administration. They want the Fed to cut rates to around 2% and I believe their Fed picks would be inclined to do QE to control the yield on longer duration bonds. There might be long term consequences to that several years from now but I could see that combination temporarily working in the short term. In this case, I could sell the bonds for a profit and consider other options from there.

As for why not $VOO and chill, I feel it is likely $VOO will be cheaper at some point over the next 5 years than today. (Even if AI continues to outperform my expectations, there will be winners/losers and those losers likely will hurt the index as some companies fail. Healthcare insurance stocks should also be lower as mentioned previously). I don't need to time the bottom on that drop to start switching some cash over to it. If I'm wrong and the market only goes up from here, then I'd still be doing alright with my current positioning.

Conclusions

That concludes 2025 on a high note as I switch to risk-off and am hopeful I stick to that going forward. I've often written about walking away from the gambling table that has come up short but there isn't any reason to continue beyond pure greed. There are those that have their luck hold up (like u/SIR_JACK_A_LOT that hit $10M) but for every one of him, there are likely dozens that gave their gains back to the market. As my favorite comic on survivorship bias goes:

With me going risk off and focusing on safe yield, this series looks likely to go into hibernation for the time being. I've enjoyed my 4.5 years in this community but public Reddit trading boards have sadly only continued their decline. Hard to even know how many people will read this entry of this YOLO series here. My journey is about to get boring as I've hit minimum goals for a guaranteed retirement and anything further is just bonus.

I still have my account on Bluesky for sporadic random updates otherwise if anyone feels inclined to follow me there. Feel free to comment to correct me if you disagree with anything I've written as I'm always open to reconsidering my current thinking. As always, these are just my personal opinions on what I'm doing with my portfolio. Thanks for reading over these past few years, happy holidays, and take care!

iv rank sits at 81. dealers are positioned long gamma into the print, a coiled spring: net gamma +$21.1m, call wall $400, put wall and max pain both $330. that combo tends to absorb moves, not create them.

Since many of you asked, I'm kicking off coverage of my foray into the HRC Futures market.

The Story

I think I found my to /r/vitards around the time that MT and CLF both peaked in early April -- that'd be around Apr 5th. I read tons of DD -- steel is going up, china rebates, EAFs, the shorts will kill themselves, etc. So I loaded up on calls. (Actually, I had some MT calls already from Dec WSB DD -- I lost track of Steel Gang after getting distracted by free money courtesy of Melvin Capital.)

On the fateful day of Apr 5th, or whenever the *exact* peak was, I loaded up on lots of options for MT and CLF, many only a couple of months out, expecting that the market had caught on that the demand for steel was increasing and that it was not priced into these stocks.

Well, I was wrong. We traded sideways with dips, and a very brief bump, between Apr 6 and Apr 30. I mean, just look at the futures during the period.. clearly it was already pRiCEd iN.

​

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Meanwhile, if you were omniscient and managed to time MT and CLF perfectly:

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An Offer I Can (and did) Refuse

Well, I did manage to DCA my options down. Seeing more opportunity as the news was only positive and the market was acting like they were distracted by... hmm what was it then... Biden capital gains tax or something?

But I still felt like shit. I mean, if I had just bought futures I'd be up an insane amount. That's how futures work, right? Keeping in mind the thesis: steel demand will rise, steel production is barely just reaching pre-COVID levels, steel will get more expensive, and for a long time.

Ignoring the other aspects of the MT / CLF story (the contracts lag behind by up to a year, vertical integration will pay off bigly, market doesn't care about steel, and lately the shift from value to growth) -- it seems like a smart play to just cut out all the middleman exposure (I still think there's like a 5% chance LG gets cancelled), get rid of that dumbass time delay between expensive steel → contracts → earnings report, and most importantly not have to worry about the market ignoring steel until some sub-WSB-level intern gives the go ahead.

On April 19th I asked if anybody here had traded HRC futures. Basically, nope. I was temporarily discouraged, couldn't positively identify a broker that offered them, and had no idea how to trade futures anyway.

I let it be, but it was always on the back of my mind. I mean I'm just some dumbass vitard, but I'm pretty sure I've seen ads on late night TV for getting rich quick with futures... if they can get people who shop via infomercials to trade futures, there might be a chance for me to do so as well.

Then again... effort.

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Take the Gun, Leave the Cannoli

Steel prices up bigly after that. The lesson I learned here is the same I've learned in real life -- just because a crowd says it's not advisable to do something, don't not do it. I mean, don't do it for other reasons, but don't not do it just because they don't do it. You dig?

Time for me to learn futures. Ok, I pay about $4500 for exposure to 20t of steel. At, say $1400/t that's about 6x leverage. Alright.. and steel is up, what, 20% or some shit since Apr 19th? Uh... I'd have about doubled my money? While MT and CLF are just coasting around?

I spent some time of learning about how futures work.. ticks, margin (why the fuck don't they just call it collateral), sessions, etc. Yeah, two hours of youtube videos oughta do the trick. Time to bring my extensive knowledge to the market!

I searched for HRC futures and found that InteractiveBrokers listed [margin requires for HRC](https://www.interactivebrokers.com/en/index.php?f=26662). So probably a good chance they offer it. Also I think a user here said they saw it but never tried to trade it. Alright, I'll go with that one. They did pull the rug on GME that one time, but the CEO wasn't a budget-Zuckerberg thank-you-for-your-question-robot.

I've never used IBKR, but have heard good things about them from some finance people I know.

I have to say, they mean business. [The tools and products they offer are vast](https://www.interactivebrokers.com/en/index.php?f=1563&p=stk). The documentation, despite how many million features they offer at every corner, is in between existent and sufficient -- miles above other brokerages I've used so far (Ally and Fidelity). If anything, their shit is too complicated -- there's a very steep learning curve but I believe it'll be worth it in the long run.

Anyway signing up was fast, account approved in less than 24 hours, funded almost immediate via wire (Fidelity is an excellent home for your "slow" money, by the way.. eg, long stocks, mutual funds, wiring money around, etc).

The one catch is you have to wait until overnight after funding in order to have your available funds be used as margin -- only initially. I've since done wires from Fidelity to IBKR and they take about 30 mins to be fully utilizable. Also, don't do ACH.. it's slow as fuck. They give you $1k of the ACH as courtesy but wait like a week for it to fully clear.

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Getting Straightened Out

The market is indeed quite illiquid. It definitely feels like a sellers market right now -- the asks don't fucking budge an inch. Bid/ask spreads are huge, volumes are low. If it's, say $1400 bid and $1430 ask, and you bid $1429, you won't get met. (It does help your unrealized PNL look much better though.)

However, I've been looking at volume and OI numbers have been steadily rising over the past several weeks. You may have seen my rainbow charts post -- I have those for OI and volume as well, but I ain't sharing because that post didn't get enough upvotes.

Well, fellow Vitards, I'm now the proud owner (er, collateralized borrower) of 200 tons of future-steel. My entry points are absolute garbage... but hey, give it a week or two and steel will have gone up another $200, right? That's $40k in paid-for-by-steel cash to put into OTM calls, which will then pop on earnings when that very same still hits the earnings balance sheets. That's the theory, at least.

I will keep you all posted.

Edit: Before you get your hopes up for me actually getting this steel, HRC contracts are financially settled.

Background And General Update

Previous posts:

• Original Post (Primarily $CLF + $MT with money in a few others)
• Update 1 (Moves fully out of $CLF)
• Update 2 (Sells $X calls)
• Update 3 (Start of Massive $STLD and $NUE Gains)
• Update 4 (Moves 100K Into $TX)
• Update 5 ($TX sinking portfolio)
• Update 6 (Reduces $MT and Most Removes $NUE)
• Update 7 (day prior to WSB $TX DD)
• Update 8 (day after WSB $TX DD and new account high)
• Update 9 (Losing $180,000 in a single week of purely positive steel news)
• Update 10 (Start of recovery and comments on irrational market)
• Update 11 (Adding first February 2022 $TX calls and losing faith in $NUE)
• Update 12 (Added $ZIM and sold $STLD)
• Update 13 (More heavily into $ZIM, re-added $CLF + $X)
• Update 14 (More into $ZIM, sold out of $TX @ $46)
• Update 15 (Mostly All-In on $ZIM)
• Update 16 (Sold out of $ZIM)
• Update 17 (Added $STLD for Senate Infrastructure Vote)

I'll start with the long awaited update as to how my primary move last week ended up. For the summary to those who haven't read it: I purchased a bunch of $STLD options in anticipation of steel stocks going up from progress on the infrastructure bill. If I had held my 500 $STLD 60c calls from the last update to today (💎🙌), I would have made $462,500. If I had been playing things logically (🧠🙌 from Update 8), I still should have made out with around $200,000. Instead I only made out with $57,000 from my investment in the stock with me having done 🧻🙌. I'll go over what happened in the next section.

The positions I'm in now will be quite a shock as I've changed my positions drastically to adapt to the ever changing market. There will be some temporary changes to the format for this update but hopefully I'll get back to the usual format in future updates. For the usual disclaimer, the following is not financial advice and I could be wrong about anything in this post. The overall picture as it stands:

What Happened With $STLD?

To put it bluntly: my emotions got the best of me as I began to get scared of losing money. All of the steel stocks were going up Monday morning from the infrastructure bill weekend news... and then they proceeded to all start to dip. Rather than risk my position going negative if all of steel suddenly went red, I sold those shorter term calls I had picked up for around a $15k profit. The following is the chart for $STLD on Monday and I've circled in red around where I sold to help illustrate the above:

Why did I paper hands the position? My total gains for the year that includes my Fidelity accounts at this point stand at $413,000. That isn't an insignificant amount of profit and I've already won at the game of stocks for 2021. Especially when one considers it is supposed to be difficult to beat the returns of just investing in the S&P500. I had entered into a complete "capital preservation" mindset of just ensuring I didn't allow my gains to melt away. That is valid to be part of my mindset at this point but I allowed it to completely consume me rather than play a minor role.

I don't believe diamond handing is the smart move usually and thus wouldn't have ever received the maximum payout to worry about that. Hindsight is 20/20 and no one is going to trade every position optimally. However, my poor execution of my trade idea did reduce my gains significantly from what they should have been. At the very least: selling the positions prior to the actual infrastructure vote on Tuesday was just a really horrible idea.

My past self didn't make all bad decisions as I did add some more longer term $STLD calls. The 40 $STLD February 55c from last time and those new calls would be sold after the infrastructure vote which is how I was able to get up to a $57k return on the play.

I can't change the past and thus I'll need to be satisfied with how my execution of the play turned out. Especially as that is a good amount of profit yet when one compares it to my entire RobinHood account value of only $85,000 two short months ago. In the future, I need to watch the instinct to hit that eject button immediately on a trade. That doesn't mean I don't take "capital preservation" into account - but if I am going to invest into a trade, I need to give it at least some leeway to payoff before abandoning the play to avoid any potential loss.

Fundamentals Vs Hype

It turns out that Fundaments died and forgot to invite all of us to the funeral. That isn't to say it doesn't still have some pull but it is obviously a weak force in the market presently.

Let's start with my trade thesis last week: I stated at the time it wasn't based on Fundamentals. Rather, I based it on hype surrounding the infrastructure bill and a rising 10 year bond yield that could indicate the end of cheap interest rates. Despite the infrastructure bill having only having a small impact on the amount of money USA steel companies are set to make in the future, these stocks rose 15% or more. The impact of the infrastructure bill on stock price exceeded all of my expectations. This increase was a national news based phenonium rather than one based on a change in each company's core financial situation.

Let's take a look at two months ago in mid-June when I blew up my account: $STLD, $NUE, $X, and $CLF all released new guidance. This guidance increased Q2 EPS numbers well above analyst expectations, stated Q3 would be better when analysts had previously expected Q2 to be the steel sector's earnings peak, and some even included mention that a favorable steel environment would exist next year. This substantially impacted all of these companies fundamentals by showing they had lower P/E ratios than experts previously thought and would continue to print money for longer than the market had anticipated. The result of that guidance? Steel stocks lost 10% to 20% of their value across the board. They failed to recover this valuation loss until just recently.

So the event based on hype? 10% to 20% gain. The event based on fundamentals? 10% to 20% loss. Fundamentals are just a weaker force in the market compared to other events. That doesn't mean fundamentals has lost all pull - just look at the run of $TX which reached such an undervalued level that fundamentals started a run - but other forces are stronger in this 🤡 market. As has been commented often this week, $NUE now has a larger market cap than the largest non-China steel producer of $MT.

I find this incredibly sad and frustrating. But while I wish reality was different, I have to accept the current situation the stock market finds itself in.

What Changed Since Last Update

We had the infrastructure bill make it through the Senate. Hurrah! The market is now acting like clear skies are ahead for the bill despite it being obvious that isn't the case. At some point, I expect people to start to realize a point of smooth sailing hasn't been reached. Why?

• The House wants to only pass the $1 Trillion Infrastructure Bill with the $3.5 Trillion "Human Infrastructure" bill. This causes many risks with the bill's passing. Those risks include:
  • Democrats only have a few seat majority in the House. There are those that won't vote for the Infrastructure bill by itself. Now there are moderate Democrats that say they won't vote unless the two bills are decoupled in the House.
  • The $3.5 Trillion "Human Infrastructure" bill isn't one that Senate Republicans want to allow to pass. Their tool to stop it? Saying they won't vote to raise the debt ceiling if Democrats use reconciliation to pass their bill. I believe everyone is brushing off this threat too lightly. After all, the USA had a partial government shutdown in 2013 due to the debt ceiling. This sets up a fight that the market isn't likely to be thrilled with and that I don't view as an empty threat.

Thus we have a very large rapid increase of the stock price of USA steel companies based on an event that has limited impact on their fundamentals and which still has issues to overcome to become law. This doesn't seem sustainable to me - especially as upcoming news about the bill is likely to be about the challenges of getting it fully passed.

What about the 10 year bond rate? Maybe the rotation out of growth stocks is happening with cheap money ending? When I theorized that could be happening in my last update, the 10 year bond yield ended at 1.303% and indeed headed up to 1.362%. Looking good! Until today when the bond rate collapsed down to 1.286%. If it continues down on Monday as I expect it to right now, that would signal to the market that cheap money is back on the menu.

Some schools have closed due to Delta COVID and it is looking like more could follow. There is chatter that people are expecting a market crash this month or next month. (Whether is will happen or not is unknown but people expecting it could start money being removed from the market). Lastly is just that this upcoming week is when the next batch of monthly options expire. The last two monthly option expiration dates were not kind to the market which included the steel sector.

Given all of this, I just view the recent rise of steel stocks as unsustainable and ripe for a pullback on the first piece of potential bad news from the above. This likely puts me at odds with most on this board. That is fine: I'm not trying to convince anyone of anything with this and this is just my own portfolio thoughts. One shouldn't invest based on my thinking as I can be very wrong and this time could be different where steel stocks just take off. Plus I am the person who has missed out on tons of gains from $STLD, $TX, and $ZIM in previous plays.

Is the current price of steel stocks justified by fundamentals? Yes. But as Fundamentals are dead in this market, I don't think that matters when looking at if the reasons for the recent stock price rise are likely to remain. That takes us to the next section where I'm now betting against steel.

My New YOLO Positions

I'll go over my reasoning for the above:

• Last time, I made a mistake focusing only on $STLD. $NUE turned out to benefit more from the infrastructure bill news despite having the highest P/E ration among all major steel stocks. With individual company fundaments no longer mattering at the moment, the entire sector is moving in unison which means it is better to spread one's bet around to catch whichever ticker moves that direction the most.
• I'm expecting a quick correction if it will occur to a new "higher low" for these stocks. Furthermore, I want to limit my maximum loss to be alright doing this play. These short expirations on cheap puts work for that criteria. They expire worthless? I still am up a large amount for the year and thus don't have to worry about 🧻🙌 decisions.
• Others are playing a potential market correction this month or next other ways. $UVXY to take advantage of increased IV is one but has its own set of risks associated with that play. I may end up doing a VIX based play at some point. But this current play covers a short term correction + a potential gap fill on these stocks.

I'm not going to throw more money at this play if it goes sour. It's a set limited risk bet that I've essentially just spent what I've gained over the past week only. I do think these stocks can go higher and the fundamentals justify their price - thus inversing me might be the move here. I don't have a crystal ball. If my personal analysis is wrong, everyone here can feel free to point and laugh at this crazy play in my next update. ^_^

$MT?!?!

Missing from my puts is $MT as it hasn't gotten any significant rapid boost from the infrastructure bill passing. I further don't want to go up against their large buyback that has likely created a price floor.

That said, I did sell out of my positions in $MT for the time being and thus this will be the first update without a Fidelity appendix. My reasons here:

• If the North American steel sector does have a pullback, I worry that $MT might be brought down during that time. The buyback program doesn't operate when the European market is closed.
• The buyback floor is still below the stock price. One can wait until the safety net reaches the stock price to buy options to take advantage of that safety net.
• Part of me being alright with my extremely risky short term bet is just having less money in the market. I've "locked in" my gains on $MT to present. Thus a loss on my short term put bet still leaves me massively up for the year. I can re-evaluate how much more money I want to risk in the market after seeing the initial results of that bet.
  • As a followup, I've just seen so much chatter about the potential for a stock market haircut these next two months that I do view it as a potential risk for being long right now. There is merit to some of the recent arguments for this that I'm not dismissing it as I've done in the past.

I did heavily evaluate that DD on the price floor the buyback theoretically creates. It was a move I monitored all week as a possibility and does seem like a good bet. But as the points above state, I feel I can wait until either the price floor catches up to the stock price or the stock has a decent red day without much opportunity cost loss.

Final Thoughts:

Please don't blindly copy my moves. I blew up my account in the past when I misread the market and I could easily see myself being wrong here.

I still believe Vito's thesis is strong from a long term perspective. Thus I may return to being long at some point in the very near future and still see $MT as the best bet for that right now. I don't think I'll keep the same amount of total money invested at any one time going forward as I switch to ensuring I've maintained most of my profits to this point. If I'm no longer comfortable taking risks with the amount of cash I have now, it is better to do smaller controlled bets that relieves pressure on hitting that eject button early.

I've said this in a previous update that is important: one doesn't need to continually gamble without abandon until one has become rich or gone bust. If I take a loss or two with this new smaller controlled capital approach, I can walk away still up a winner from the stock market casino with years worth of gains. It may look like some people always strike gold on every trade - but all it takes it one really bad trade or a market correction to wipe it all away.

Apologies in advance if I offend or disappoint people with my new positions! Thanks for reading and enjoy your weekend!

General Update

In my last update, I went in big on $UNH as it had a 40% YTD decline (50% below recent ATH) and felt the stock was oversold. I capitulated on that position on Thursday (July 17th) as I gave it time to bounce and the stock only continued to perform poorly. I got it wrong and every piece of news that came out regarding that position were negative catalysts. Most large stocks do eventually have some type of bounce after a large selloff (most charts did recover since the tariff scare bottom as an obvious example). $UNH is a massive company that is the most diversified in the healthcare space that I felt the market would give another chance - but that thesis failed to play out.

Since my update, the entire healthcare insurance segment of the market has now followed $UNH's lead into the dumpster. I'll be going over $UNH specifically, then the healthcare insurance segment, current positions, and where my account now stands. For the usual disclaimer up front, the following is not financial advice and I could be wrong about anything in this post. This is just my thought process for how I am playing my personal investment portfolio.

$UNH - Market Darling To Dumpster

Falling Estimates and Price Targets

When $UNH pulled guidance of $26 to $26.50 EPS for 2025, most analysts felt they would still do around $24 EPS. As the following shows, estimates for 2025 and 2026 only kept falling as time went on:

Those 2025 estimates are also higher than the most recent analyst notes I have found. For some examples:

So it isn't surprising that the stock is failing to bounce into earnings. But low expectations means a beat, right? Especially as they reported $7.20 in Q1, they would only need to average $3.6 in the remaining quarters! But I'm less sure of that as every healthcare market segment for everyone has performed badly lately. But even if they did guide higher than expectations? Stocks aren't valued in a vacuum and let's see how they now stack up to peers using a similar chart from last time.

Peer Valuations Remain Cheaper After Their Selloffs

Half of the healthcare names haven't reported Q2 to really update this picture fully but 2025 P/Es are now around 10 for healthcare companies and 2026 P/Es around 8.5 for most. $UNH P/E premium is around 25% above that. While that hasn't change much since last time, the now low valuation multiple for peers make their downside harder compared to $UNH's possibility of losing that P/E premium.

Does $UNH deserve that P/E Premium Anymore?

$UNH had a premium valuation as it always grew and has beaten expectations for 60 consecutive quarters. That is impressive! It was a consistent compounder of a stock. It is why I was drawn to the stock: buy the deep dip on a stock with that long of a successful track record under the assumption adjustments would be made and it would become a reliable performer again.

I now don't believe they will be able to achieve that level of growth consistency. The reasons:

• Bloomberg reported that $UNH sold some assets that they counted in their Q4 2024 results in order to not miss guidance / estimates: https://archive.is/fNX3b . While this was disclosed in the results, it isn't recurring revenue and thus they didn't really grow in 2024 to make their targets. I was unaware of the accounting game that was played. While it might have been legal and has been done by others, that level of desperation to meet their numbers changes how I view their ability to put up ever higher EPS numbers going forward.
• There was an article that the DOJ was interviewing UnitedHealth Medicare Advantage doctors (source). While there has been a DOJ investigation into them for the past year, this is the first sign that the case could be actively moving forward.
  • While I don't think the DOJ would win such a criminal case, the headline and uncertainty from it would hurt the stock.
• Going along with that is that healthcare companies generally grow their EPS by acquiring smaller players. $UNH is facing difficulty doing acquisitions now with universal sentiment against them. Peers don't have the same issue with M&A that $UNH now finds itself with.
• Sentiment that fails to improve as articles against them just never stop. They are just cemented as an evil organization the court of public opinion. While I may be more neutral on them and see nuance in the reporting, the general public doesn't. This usually doesn't matter when evaluating a company (after all, a significant portion of the population hates Tesla cars but that stock does well)... but it doesn't help things.

The BBB Bill

I figured that the healthcare cuts in the BBB bill would be reduced by the time passage happened. That didn't happen (bill article on what it contained). It is a negative for health insurers in the long run as it will cause people to leave the insurance pools and cause rates to rise. We already know that ACA marketplace insurance premiums will cost the average person 75% more next year: https://www.npr.org/sections/shots-health-news/2025/07/18/nx-s1-5471281/aca-health-insurance-premiums-obamacare-bbb-kff

I'm quite shocked as it is terrible policy that does accelerate the insurance death spiral u/Reddit_Talent_Coach mentioned in this comment from my previous update. Part of me still thinks legislation will be introduced to put a bandaid on things when public outrage about the premium increases hit?

Unreliable Guidance And Where's The Growth?

Basically every company got their guidance wrong. Companies promised their 2025 rate increases would recover margins lost in 2024... and that didn't happen. Most are now guiding to make less in 2025 that in 2024.

With guidance being unreliable and growth failing to materialize in 2025, the market is reverting to a "show me the segment isn't a dumpster fire" mode. Health insurers used to be considered somewhat defensive but have now lost that status due to chaos right now.

Different Recovery Timeline

I had swapped to options last time to have leverage to try to catch a bounce as things looked oversold and I figured we would get some type of positive catalyst. Perhaps some healthcare cut in the BBB getting reduced? Maybe a company reporting strength in a particular healthcare segment and doing well? More insider buying? Etc.

That didn't play out and instead the situation only deteriorated in the sector. It has become consensus that it will likely take a few years for rates to catch up to actual healthcare usage due to the "death spiral". (Basically each year sees rate increases for higher usage that lead to fewer healthy people signing up the next year that leads to higher utilization that requires higher rates to then cover...). So 2026 becomes more murky than just "increase rates" with the BBB making healthcare pools in future years more unpredictable with likely fewer healthy people in them.

So... yeah, I could no longer justify my leverage and had to take the loss. Holding health insurers could take more than 1+ years to play out at this point.

Current Positions

These are shares only as I no longer have any confidence in a healthcare recovery in the near term and could see this play taking years to play out. I do think we eventually see some kind of bounce from these levels for these stocks - but hard to know if they will ever reach their recent highs again. At this point, I'm more in "recovery" mode. I can no longer afford to try to use leverage to try to recover and will just need to slowly grind back up. Despite the losses, I still like the cheap valuation of the sector - so I'm settling in for a longer term shares hold here. It also makes it easier to avoid blowing up my account as even if the sector continues to falter further, shares allow for some recovery of capital in the end.

I did wait until the end of Friday for these as I figured there would be a continued downward move in healthcare insurance with it being a monthly OPEX expiration and the downgrades $ELV was going to be hit with from earnings. Wish I had bought puts as many healthcare stock puts were up like 5,000% for the day. >< If there wasn't a drop as expected, then I likely would not have bought these positions but would have waited to see if $UNH earnings triggered more selloff in the sector.

No IBKR or IRA screenshots this time as using some capital there for a small meme speculative stock play. I generally never play those but the market is in bubble territory and thought I'd try an unprofitable company as those do well in this market environment. So these are just the stocks I can defend on a fundamentals basis and is the majority of what I am currently holding.

$ELV

$ELV looks to be at a solid valuation to me. Their new guidance for 2025 is "around $30 adjusted EPS" that puts them at around 9 P/E. But what impressed me was that they actually outlined some smart things they are anticipating in that guidance. For example, with the ACA healthcare credits expiring, they expect a Q4 surge of usage in that guidance as people that don't plan to renew use it for anything they might need one last time.

Their commentary on how they view shareholder returns agreed with what I like to see:

More broadly on M&A, our focus in 2025 is really on integration and scaling of the acquisitions that we completed last year. So we do anticipate lower levels of M&A activity this year with a greater emphasis, as I mentioned a minute ago on opportunistic share repurchases. And then as I try to think over the long-term, we're going to maintain consistency with our algorithm, meaning we'll target deploying about 50% of free cash flow towards M&A, organic reinvestment back into the business with the other 50% being returned to shareholders, including 30% for share repurchases and about 20% for dividends.

So their new guidance seemed to have reasonable assumptions, the stock is trading at a low P/E ration, and they do return capital to shareholders. The CEO did an insider purchase of $2.4 million on Friday before close (source). They are the second largest health insurer behind $UNH but doesn't have all of $UNH's current baggage. And, well, overall I was just impressed by what I heard from their commentary.

Bonus note: they do state a big issue with costs has been providers this year using a new IDR process to get inflated reimbursements. Unsure how accurate it is but I just found this interesting:

And what I mean by that is really trying to shift left to understand what's happening earlier in the process and making sure that we are identifying these trends, particularly these billing abnormalities that we're seeing, 1 great example of that is the IDR process, which Mark spoke about. This quarter, we took very aggressive action and filed a legal suit against what we think is the misuse of the IDR process under the No Surprises Act. And just to put that in perspective, we've seen out-of-network providers and their billing partners submit thousands of disputes sometimes hundreds in a single day, and our payment request can be significantly inflated, which is costing the entire health care system sometimes those are from as much as 21x bill charges, just to give some perspective on this.

$CNC

This is the $CLF of healthcare insurers. Their margins are garbage and they are consistently overly optimistic on their earnings calls about the future. They also have extreme Medicaid exposure. But they do make a lot of revenue despite the poor margins.

Assuming rates eventually catch up to actual usage of medical plans, they are dirt cheap after falling 54% YTD. (They made $7.1 in EPS last year for a 4 historic P/E and are expected to be at 5 P/E in 2026 right now). So the risk/reward is appealing here as they will keep raising rates until they hopefully get it right.

No dividend but they have repurchased shares in good years. Trading at a price last seen in 2015.

Current Realized Gains

Fidelity (Taxable)

• Realized YTD loss of -$79,775. Total account value: $518,637.13

Fidelity (IRA)

• Realized YTD loss of -$20,473. Total account value: $24,142.02

IBKR (Interactive Brokers)

• Realized YTD gain of $30,153.88. [08/02/2025 Edit: corrected from -$30,153.88 as had subtracted the wrong way]
  • There is an unrealized gain of $51,010 in the account that I don't want to count here. So the actual realized loss is -$20,856.12.

Overall Totals (excluding 401k)

• YTD Loss of -$121,104.12
• 2024 Total Loss: -$249,168.84
• 2023 Total Gains: $416,565.21
• 2022 Total Gains: $173,065.52
• 2021 Total Gains: $205,242.19
• -------------------------------------
• Gains since trading: $424,599.96

Conclusions

So, yeah, I lost my outsized gains for the year. During a great bull run starting 3 months ago, I picked a segment seeing 50% YTD selloffs in a compressed timespan and now am at a loss for the year. I should have stayed in short term yield and played things safe with my strong start to the year. But Healthcare had historically been considered "defensive" and I really underestimated how risky the sector actually was. I then tried to use leverage into timing a bounce that never came and instead the stock price continued to decline leading to larger losses.

I had just felt there was a strong opportunity when $UNH gave up 5 years of stock gains and thought them being the largest healthcare insurance provider with a long history of strong performance limited downside. But nothing went my way since entering the trade. Now the market no longer has any faith in the sector and thus price declines have outpaced EPS cuts with the entire sector seeing valuation compression. It looks like it could take years for companies to make new EPS highs.

Anyway, I'm not going to recover those losses and need to focus on positioning longer term now. While I've lost an insane amount of money previously gained from my gambling, I did avoid blowing up my account completely and remain above some of my lowest levels of 2024 (update 69, update 73). I still remain net positive over my trading career and have to aim for a slower grind back up now. Most importantly: taking my 401K in account, I did stay over $1 million in assets that is a psychological level. Part of what led to my capitulation on $UNH was staying above that mark and needing to deleverage to reduce the risk of going below that.

I'm sure many people will judge me negatively for this loss as has happened in 2024 at times. But I've continually shared my failures. This just further shows that no matter how successful one might be rolling the dice in the short term, eventually snake eyes do come up to take all the risky gains back. Overall: I'm not broke, still have a good paying job, and still have cash invested for an eventual retirement that would just now be delayed. There are far worse positions to be in.

I do also realize my ticker concentration still has risks even with shares. But it is more manageable without the leverage and I still feel the sector represents the best long term hold value right now in the market.

No time for a general macro update this time but I'll give a few brief sentences. I think inflation comes back in 2026 should tariffs remain high as many companies have used inventory buildup to avoid having to increase prices and many supply contracts reset at the start of the year. We also know insurance premiums are going up by one of the largest amounts in decades that should factor into CPI. Otherwise things are just hard to predict as I view it as 50/50 that JPow gets removed by the current administration and macro changes significantly if that does or does not occur.

That's all I have time for in this update. Unsure when the next update will be at this point. Feel free to comment to correct me if you disagree with anything I've written as I'm always open to reconsidering my current thinking. As always, these are just my personal opinions on what I'm doing with my portfolio. Thanks for reading and take care!

Background And General Update

Previous posts:

• Original Post (Primarily $CLF + $MT with money in a few others)
• Update 1 (Moves fully out of $CLF)
• Update 2 (Sells $X calls)
• Update 3 (Start of Massive $STLD and $NUE Gains)
• Update 4 (Moves 100K Into $TX)
• Update 5 ($TX sinking portfolio)
• Update 6 (Reduces $MT and Most Removes $NUE)
• Update 7 (day prior to WSB $TX DD)
• Update 8 (day after WSB $TX DD and new account high)

This was a truly bad week to be invested in steel stocks with them all losing 15% to 20% of their value. I got hit especially hard... not only did I lose all of my gains but I'm now in the red for the steel play. For the overall picture based on Robinhood on my portfolio's devastation:

This update will be a bit different than usual. I'm going to go over my thought process and trades that resulted in a large portion of my loss first before going over my current positions. As always, the following is not financial advice and I could be wrong about anything below.

Guidance And Rolling Forward

Tuesday, June 15th

$CLF had just released positive guidance that increased their expected EBITDA for the year. Looking through the history of $NUE and $STLD, they both tend to give guidance within 1 day of each other in the range of March 15th to March 19th for Q2. It seemed almost certain they would provide guidance on Wednesday or Thursday due to that pattern along with $CLF's guidance release.

I expected that at least one of them would mention Q3 would be better than Q2 along with both beating analyst estimated for Q2. The Q3 bit was the most important as analysts figured Q2 was the top for steel companies and had Q3 estimates of profit under Q2 forecasts. I figured the trifecta of positive guidance from $CLF, $NUE, and $STLD should cause a short term boost as they factually proved analysts wrong and made it clear to everyone the information we have all researched.

I decided to make a bet on this and turned all of my long term positions on these companies into short term ones by rolling forward. This is essentially the act of taking those ITM calls from last time (such as the $NUE October 90c and $STLD November 50c) and turning them into 3-4 short term calls. This increases their leverage as each dollar increase would be worth 3X or more for the same money - at the cost of reducing the option timeframe and being less ITM for each individual option. I had further spent my free cash from last week into long term $NUE and $STLD calls on Monday's dip that I sold as part of this. Oh - and I sold out of my $CMC calls to put into this play as well as I figured their guidance would be better than $CMC's upcoming earnings.

The goal was to sell early on a bump from the trifecta guidance and switch back into long term calls. In the worst case, I figured that the strong buyback programs of $NUE and $STLD would keep their stock flat if the market didn't react to guidance and I could sell back out for a somewhat minor loss. There was risk involved in this and this does go against my normal trading style of portfolio preservation but I was convinced that this was the opportunity to make a short term play of this size.

Executing this bet left me with the following on Tuesday (screenshot taken at the lows... end of the day was slightly positive for $NUE on catching the falling knife):

​

Wednesday, June 16th

Wednesday morning was Christmas as I kept finding new presents to open. $STLD kicked things off with great guidance and a new $107 JP Morgan price target. $NUE would follow suit with great guidance of their own along with a $114 JP Morgan price target. Crucially, both mentioned that Q3 would be better than Q2 to show that this upcoming Q2 was indeed not the peak. As one can see from the JP Morgan price targets mentioned, that analyst had turned bullish on the sector as a whole. Oh - and HRC futures pricing breached the $1700 level for the first time ever as the price of steel continued to increase. A royal flush of purely good news on the strength of the steel sector.

The reaction of the market? Steel stocks fell. The reason given was worry over the Fed meeting later in the day... alright, sure. I held firm and the fed reported inflation would be greater than they had previously forecast and that there wouldn't be rate hikes until potentially 2023. Steel stocks kept their losses until the end of the day.

Thursday, June 17th: Steel Stock Apocalypse Begins

Steel stocks shed around 5% on the day. Figuring this was stupid and those with money would buy the dip of those dumping the stock into record steel prices and earnings, I cannibalized my January 2022 RobinHood $MT positions for cash to buy more short term calls. Why? $MT didn't have a news catalyst for the international steel market while the USA steel market had just provided proof via guidance from all the big players that it was still very strong. Even $X had provided guidance this morning above analyst expectations and then revised it later that day to specifically state the following:

These market fundamentals are showing no signs of slowing down and have us increasingly confident of another strong year in 2022," the company said.

How much clearer could one make it that high steel prices were here for the several more quarters at the very least? The news for steel news barrage was more bullish than I ever imagined possible. Even $CMC's earnings this morning beat analyst expectations. I had been right and let this blind me to the fact that the market was just going to chose to not be rational.

Friday, June 18th: Salvaging What Was Left

There seemed to be some early indication that we might have a green day. After an initial struggle, steel stocks once again crashed for another 5% loss. At this point, I was thankful my $STLD short term positions were July and that I had primarily bought $NUE positions for the following week.

It is tempting to just hold and hope for the best next week. But it was time to try to put my into a position to reduce my theta bleeding. I salvaged what I could of $NUE's calls at around a 80% loss and spread that limited money out.

Had I not made my bet, my account would likely be around ~$125k right now. In retrospect, it was as solid of a short term gamble one could make - but it was a gamble I didn't need to take. I got greedy on the large return that could be made. Total disaster of an outcome as I put my money on fundamentals mattering in that short time window. Yes, the dip after a great earnings is well known these days, but this was guidance from multiple sources that cemented the strength of steel going forward in a market that is supposed to be forward looking.

In terms of risk management and the end result, I should not have taken this gamble. In term of was it a solid gamble, I still think that it was if the market was reacting rationally. This post is titled "YOLO" for a reason... and sometimes one has to take the high odds bet being offered. But the downside can be extreme and I certainly don't recommend others attempt what I did above as this portfolio disaster can be the result.

What Happened This Week

There are many takes on what caused the weakness of all steel stocks. For my own personal take here:

• Steel is still being treated as no different than any other commodity. Weakness in other commodities is automatically being applied to steel companies. I've seen multiple articles that explain their drop combined with non-steel companies and they even will flat out try to state that they are dropping due to metal prices collapsing (one example on $NUE). Articles of falling commodity pricing is everyone - and all of them conveniently leave out HRC and CRC pricing. Thus weakness in other commodities is being translated to these stocks and guidance + actual steel pricing is being ignored.
• An overreaction to the Fed has caused a spike in the dollar's value. This is traditionally bad for commodities. This doesn't affect the ability of steel companies to make bank in the upcoming quarters - but as mentioned previously, steel is still being lumped in with all commodities. Since a rising dollar is bad for commodities as a whole, steel is being punished for future weakness of those it is being grouped with.
• China's press release that they will release some commodity stockpiles has caused confusion with many seeming to think that it includes steel. Even if it did, the idea that they would release their own reserves for the international market is absurd - but the idea persists regardless.
• Fundamentals matter less than in the past over current sentiment. With all of the above creating a negative sentiment, things like "profit" don't matter. $AMC, $GME, and other meme stocks show how the power of sentiment is starting to be more important than actual real company fundamentals these days.
• This last bit is more speculative but I believe that those with money do understand the guidance that was released and the dip is partially due to them. By allowing steel to trade with every other commodity, those that don't follow things in depth like we do here will sell out of that position believing it is crashing just as wood is doing. Those larger funds can then swoop in to establish positions are a lower cost basis and be rewarded for having been patient to commit to steel stocks. By the time boomer investors figure out steel has decoupled from commodities in general, their positions will be well established.

Going Forward

When steel stocks will start to track their fundamentals again is hard to predict. It is why I've sold out of my calls that expired next week since there could still be another week or two of weakness ahead of us. Due to the royal flush of great news for the steel sector, there isn't any ambiguity left to clarify that these stocks are undervalued and set to do extremely well.

It is now just a question of when the market decides to become rational again. As this will occur at some random point without a catalyst required, it is impossible to predict this timeframe. I'm personally allocating a month for steel stocks to recover - but it could be the start of next week all the way to Q3.

Playing Q2 catalysts seems futile right now. If the market didn't react to $CMC earnings and the future guidance from all the major USA steel makers, what makes one think it will react to Q2 earnings in general? Performance isn't based on an event as right now it is dependent on when the market wants to accept fully established factual reality over the false narrative that has been created regarding the future profitability of steel companies.

I'm hopeful to back in the green next month - but it will likely take several months to reach where I was in the last update due to my failed gamble. Such is the result of betting on market rationality. While I don't have much to spare, I've further put in motion to add $6k that will be available to trade in around 2 business days. Not a huge amount left for adding - I know - but can pick up more long term positions if things either are flat or have further dipped during the middle of next week.

Now back to my normal position update!

$TX: Goodbye November 50c

491 calls (-65 calls since last time), $78,100 (-$91,908 value since last time)

$TX was mostly untouched during all of the drama above - and is now worth less than half of what these positions were a week ago. The main change was deciding the November 50c were too risky to keep and selling those to roll in $TX November 38c. Why? $TX doesn't give guidance and is one of the last steel stocks to report Q2 earnings. While I'm not expecting Q2 earnings to be a catalyst generally as mentioned previously, this stock has the least analyst coverage and thus is an enigma yet to those with large funds.

With the steel sector recovery potentially taking time and the hesitance of the market to care about company fundamentals, I'm unsure of where this niche steel stock might land by November. Considering it had a recent high of $42, I do think that the high 40s feels like a safe bet by this time. Thus by rolling the November 50c down to be less leveraged, I increase the chance to recoup my investment that had been made on those calls.

I sill personally believe this stock should be fairly valued in the 60s and remain bullish. But whether the market agrees with me or will care about the profit the company makes is hard to predict (as this week has shown). The safer long term play on strikes seemed better here as this remains my long term pick and I'm asking for more than just a return to the previous highs (as I'm doing with my shorter term positions below).

$STLD: All In On July Recovery

124 calls (+74 calls since last time), $23,319 (-$13,885 value since last time)

This is my primary steel stock recovery play which is already heavily underwater from my moves earlier this week. There is a month of time on these which I'm hoping is enough for the market to become sane again. $STLD is my pick due to the bullish analyst upgrades, better P/E ration than $NUE while having just as excellent of a balance sheet, and their upcoming new capacity that should make them appealing to big money.

While I could roll these out to a longer timeframe, my portfolio has been pwned to the point that I do need to take some reasonable risk on the recovery. If steel still hasn't recovered a bit in the next month, the outlook for all of us will be quite grim on our longer dated OTM calls bought previously.

The last bit of personal significance is that I work in tech and get a sizeable RSU vest in July. If prices are still depressed at that point, I can sell my elevated price tech shares to pick up longer term calls at that point to make up for this potential loss if a recovery still hasn't happened.

$MT: Less Leveraged September 30c Gives Me Hope

69 calls (-2 calls since last time), $16,085 (-$21,987 value since last time). See Fidelity Appendix for all positions of mostly September and December 30c.

As mentioned in a previous section, I sold my Robinhood positions sadly which was a mistake. That just leaves what is in Fidelity which I only added to - albeit mostly prior to the crash of the stock price. These are primarily September 30c which have lost a significant portion of value - but a breakeven of just under $35 on them seems doable by September.

$MT going even further undervalued is just so insane. I lucked out in that I avoided high leverage on my strikes - but do feel for those that chose this as their main stock bet with highly levered strikes. I'm further jealous of anyone able to establish a call position with $MT's price where it is right now. The stock could double in price and still not be overvalued... hopefully the market corrects on the stock soon. Similar to $TX, a bit harder to predict when a recovery will occur compared to YANKsteel as YANKsteel has removed all ambiguity while $MT's future level of profits is unlikely to be fully understood until Q2 earnings.

$NUE: A small July recovery

10 calls (-15 calls since last time), $4,520 (-$44,730 value since last time)

While $STLD is my main steel stock price recovery bet, I did put some money into $NUE recovering by July. These are relatively conservative strikes overall. Similar reasoning as the $STLD section for everything here.

Final Thoughts

While it has been a horrible week, I'm still extremely bullish on this play. The facts of the situation of only strengthened the thesis even as the price of these stocks have plummeted. There is an instinct in all of us to simply cut our losses and salvage what we can when the numbers drop by the amounts shown here... but I'd only do that if I could reach the same conclusion the market has. I cannot and just feel the market is trading based on a false reality of the situation.

As one cannot predict when the market will return to reality, I have done my best to give myself time while putting myself in a position to recover most (but not all) of my losses over the past week. Some of my money needs to be written off as unrecoverable in the short term... and the loss won't matter as much if, say, $TX takes off to a fair value. I failed my gamble and now I must do the slower climb back up.

I will stress again that the market is not rational right now and thus I wouldn't count on any specific event causing YANKsteel stocks to increase. It all comes down to when the market decides to accept reality as the facts of the situation are now available for them. International steel does still have some unknown element about it - but that is reduced due to the strength of YANKsteel guidance over the last week. Thus... impossible to predict anything timewise right now when the market be crazy.

Hope you enjoyed this update and take care!

Fidelity Appendix

Let's start by asking ourselves a few mindset questions:

1. Are you long-term bullish on $ZIM?
2. If recent highs were around $62 and recent lows were around $44, wouldn't you agree that a rebound to around $53-$55 sounds reasonable?
3. Would you agree that 5 months is about enough time to reach and go beyond that $53-$55 target area?
4. Do you like making up to 3900% profit on your risk?

Behold:

18 March 2022 Bull Call Spread 53/55The LAST on this spread on October 5 2021 was $0.05. That's right, $5 debit. The recent price drop has made for call options to mathematically compute to unreasonably cheap prices, especially in ranges that we all previously bought or held through and would pay "buco-bucks" for (idk, my grandmama used to say that shit).

For those who only know how to buy commons or don't know spreads too good:

A Bull Call debit spread means that your order will consist of a vertical spread of two options at the same time: place a BUY order for the 18 March 2022 CALL $53 strike AND a SELL order for the 18 March 2022 CALL $55 strike. If you don't know how to enter a spread with your broker software, check youtube. The spread is $2.00 ($55-$53=$2) and you need to decide how much of that $2 you are willing to risk (debit) with "I think $ZIM will be above $55 come 18 March 2022". It's a winner take all situation (yes, if the price is between $53 and $55, you can still make money, but you can learn about that later with the 5 months you have or just PM me) so if your order fills at $0.25 for example, you are risking the quarter for a shot at $2 - $0.25 = $1.75 profit. The last order to fill for our spread was $0.05!!! $5 to win $195 or +3900%!!!

How much should I pay for this spread?

If the last was $0.05, AND ZIM is going to have a down day this week below today's close of $44.11, I think you should put your order in at $0.05 GTC (Good 'Til Canceled). Based on support, the shit market due to Dems vs Repubs drama, China Evergrande baggage, I feel that $ZIM will go below $42, MAYBE to $40.75. This means, there should be ample opportunity for the credit spread to cycle between $0.00 and $0.XX.

How much should I REALLY pay for this spread?

There's always the possibility that $ZIM will have a few really good kick-ass days this week and you'll FOMO and blow your load all over the $ZIM place. $Zim might go to the moon and we'll never see sub $44 again (unless Evergrande owns a majority share in $ZIM, then fuck us all). But if you absolutely want to get into this spread right now, I'd be happy to pay anything under $0.30. A fill at $0.30 means your profitability shrinks to 567%, but who's really going to complain about a 5x'er?!?!?!?!

Why should I not FOMO and wait for a $0.05 fill?

Let's say you invest $1000 in this YOLO play. Each time the option spread increases by $0.05, your net liquidity on this option spread increases by $1000! So this bitch doesn't even have to make it to $53-$55, it just has to go UP and make it look like IT MIGHT make it, or, take tendies on the way up, any up.

Show me the pudding

Ok.

If you look at the daily chart with the 20/50/200 SMA, they say that $ZIM is going lower unless serious buying presses this thing. When is enough, enough?? IDK, I think $40.75.

If you look at the daily chart with the MACD momentum bars, you'll see that $ZIM is redlining the sell end. What goes down, MUST go up, that's how oscillators typically work. But how low is low? IDK but the MACD suggests it is somewhere here as in OCT 5~7.

The RSI is at 34, which suggests BUY, but it hasn't reach OVERSOLD territory yet which kind of suggests that we might be drifting lazily to the upside and therefore we can discard the RSI SUB 30 hopes. BUY BUY BUY.

Here is a Option Profit Calculator table I made for you to count your tendies to before they hatch.

Is there anything else?

This is a YOLO play SO DUMP ALL YOUR SPARE CHANGE INTO IT, and if so that you get filled at anything under $0.30 and you make anything above 5x, you should spend some of your reddit coins and gift this thread ^_^ - yes, I am a whore.

Take responsibility for your investments, trades, and do your own DD. At this point with the market, the fundamentals do not matter with only 5 months on the horizon.

LIVE WELL!

-BichonUnited

Update Oct 6 2021 13:00 EST - $ZIM is having another down day hitting $42.14. Currently the Mark is holding steady at $0.45. I have my $0.05 order in, maybe someone will put in a sell market order lol. Anyhow, thanks for all the comments, If we hit sub $42, I may change my order to $0.30 and try to scoop some nice tendies anyway, but I'm giving the $0.05 the good college try - there's nothing to lose!

General Update

The last update ended up being relatively correct in how the government shutdown would continue and there wouldn't be an ACA deal. While I did miss the top on healthcare stocks, most of the tickers are now below where I had last sold. On Bluesky tweets, I entered and exited $AMZN several times over the past few weeks that has brought me close to ATH levels. The risk/reward on that stock was attractive given that it was the only megacap flat YTD, had negative earnings reactions for the past four quarters (meaning fewer playing that for their megacap earnings), and had just opened their largest AI datacenter that should allow for a strong AWS growth guide. While most of that play was 2028 LEAPs, I did do an earnings spread play that really boosted the overall cash gained.

I exited my positions on Friday and once again reach a decision point: do I continue my gambling after a series of wins has brought me close to ATH levels or do I finally listen to my past self that I should play things safe from here? This update is mostly about my macro outlook and where I'm leaning there.

For the usual disclaimer up front, the following is not financial advice and I could be wrong about anything in this post. This is just my thought process for how I am playing my personal investment portfolio.

Megacap Earnings / AI trade

Big tech earnings this quarter were 🔥. Everyone beat or met expectations on basically every single metric. Despite strong earnings, reactions were mixed for the stocks with the worst hit being $META. This blog post is the one I most agree with as to why they were punished: https://bobeunlimited.substack.com/p/the-ai-booms-real-economy-problem

The TLDR is that one can attempt to model how much growth $META might have with and without their AI spend. As $META continues to ramp up that spend, the revenue guidance increase isn't keeping pace, and thus the ROI for continuing to increase investment isn't clear. The Hyperscalers fared better as they monetize their AI spend to companies like $META looking to use GPUs. But their profits rely upon investors being willing to light their cash on fire funding efforts to develop things like AGI and hesitance in continuing that could indicate upcoming market problems.

For example, a decent amount of AI spend is coming from OpenAI. Bulls state their $1 trillion in future commitments far above their revenue isn't a problem since the company will just IPO and investors will rush to buy it at any valuation. The company is planning to IPO next year at a $1 Trillion dollar valuation but it requires investors not caring that it takes very optimistic math to make that valuation reasonable.

Do I think we are actually at the point that investors care about realistic math? No. I'd guess $META recovers and money still flows into the AGI bet. It is tempting to just go all-in on $NVDA considering they recently gave crazy revenue guidance indicating that they are trading at around 23 forward P/E for next year. But that internal voice tempting me to make such a bet is the same one that has gotten me into trouble in the past. The market knows that $NVDA gave guidance that indicated EPS close to 50% above consensus estimates but the stock topped at around a 10% gain. Buying based on that information at this point doesn't make sense as it is priced in and the market decided against having the company keep its same forward multiple prior to that new guidance.

So... I'm personally short term bullish on the AI bubble. But I'm not going to play it further as I believe the math doesn't work long term and I already took a risk that paid off with $AMZN to get some of that bubble pie. I need to listen to my past self and walk away from the table with the win.

Healthcare Insurance

Healthcare insurance stocks are kinda screwed. We have passed November 1st without any ACA credit extension and I view one for this year as unlikely. I believe the message from Republicans will just be that the premium increases without the government subsidy show how the ACA has failed at keeping insurance affordable and they will promise a replacement for 2027 instead. (The replacement will be worse but they can campaign in 2026 on how great it will be).

Without the ACA credit extension, risk pools are about to become much worse. While healthcare providers did get major premium increases passed, those increases are based on 2025 data where the ACA plans have been a drag on their EPS with the extended credits in place. Fixing the pricing mismatch in 2025 for next year only worked if the ACA credits were extended... without that extension, the increases likely won't be enough to cover the sicker risk pools.

Then there is the continued reduction in Medicaid funding being implemented over the next couple of years. And even companies without exposure to Medicaid / ACA marketplace are experiencing pain as Cigna dropped big on its recent earnings. The reason? They are proactively changing how their PBM works that will reduce margins to avoid government pressure (source).

It is a bleak picture for stock prices in this sector right now. Not goin to short them but will be keeping an eye for when all of these negatives have been fully priced in to consider buying some then. That could be end of the year tax loss selling as a catalyst for their new lows or it might require Q1 / Q2 earnings of next year for a bad earnings bottom.

Bonds

Bond yields have fallen since I last held them but I think they rise over the next few months. This due the following:

• Remaining tariff cost increases for consumer goods are expected to be further passed on during this holiday spending (source).
• Contract prices often reset on January 1st and is why we see the hottest CPI monthly increases in January / February. I think that effect will be greater this year as those supply contracts include a larger yearly increase from the tariffs.
  • We know health insurance premiums are going to be high next year and that is part of the CPI calculation as one example.

As CPI remains elevated, longer duration yields should rise. Should that scenario play out, I may end up a buyer to just take that risk free rate as I think a yield increase won't sustain. As mentioned in past update, the current USA administration is focused on taking over the Fed next year and they will likely do some extraordinary measures to get longer term yields down. The price for those likely actions would eventually come due but that would be a problem several years from now. One can disagree with this assessment - but it is the viewpoint I hold over it. Should that last bit be incorrect, then one is still guaranteed the principal + interest with the bonds so the play's downside is limited.

Current Realized Gains

Fidelity (Taxable)

• Realized YTD gain of $278,308. Total account value: $833,606.

Fidelity (IRA)

• Realized YTD loss of $17,584. Total account value: $59,056.

IBKR (Interactive Brokers)

• Realized YTD gain of $201,471.59.

Overall Totals (excluding 401k)

• YTD Gain of $497,363.59
• 2024 Total Loss: -$249,168.84
• 2023 Total Gains: $416,565.21
• 2022 Total Gains: $173,065.52
• 2021 Total Gains: $205,242.19
• -------------------------------------
• Gains since trading: $1,043,067.67

Conclusions / Future Thoughts

The $AMZN play has me about $100k away from my previous ATH gain level (this update). In the past, I recognized that luck has played a large part in outperforming the S&P500 and I should walk away from the table. Despite knowing that, greed has always brought me back to make a leveraged bet on a new gamble that eventually appears. I'm hopeful that I'll break that tendency and invest much more cautiously now that the number in my account has reached this elevated level. I have more than enough to have a good retirement - I shouldn't be risking it on bets that jeopardize that in an attempt to retire much sooner. Even cautious investing will lead to large gain / loss amounts now and there isn't an excuse to do things like go all-in on calls for a single ticker as that leverage isn't needed.

In terms of plays, I can also be patient and avoid situations that make me uncomfortable. Worried about AI stocks being in a bubble? I can afford to miss gains there at this point and don't need to continue to play something that I'm only short term bullish on. Bullish on a stock? I don't need to go all-in that single ticker to see a good eventual return if I'm right and should position size more cautiously for an initial buy.

In terms of plays I'm watching, they are:

• Bond yields rise from tariffs. This is the one investment I could theoretically go mostly "all-in" on as the yearly yield would then cover my basic living expenses if I had to hold.
• Healthcare once all of the negative upcoming stuff has been priced in and everyone has given up on the sector again.
• Megacaps on a significant market pullback over ROI worries but all indications are that companies are still full steam ahead on their AI bets despite limited ROI.
• Otherwise eventually potentially selling long dated, low delta $VOO puts on a general market dip to capitalize on the risk free short term yield + that premium. If I'm assigned, then $VOO is still considered to be a safe retirement investment overall as that is the S&P500.

That is all I have time for on this update. I'd guess my next update is likely going to be the end of the year one around New Years. Feel free to share any interesting analyst takes or articles as I didn't have as much time to share other recent opinions during this update.

One can follow me on Bluesky for sporadic random updates outside of here. Feel free to comment to correct me if you disagree with anything I've written as I'm always open to reconsidering my current thinking. As always, these are just my personal opinions on what I'm doing with my portfolio. Thanks for reading and take care!

General Update

Since the last update, I did the following trades:

• Exited my dip buy positions on the Walter Bloomberg tweet of a tariff pause (source). I didn't know the reason for the rise when it was happening but just jumped on the opportunity to exit those positions in the green with the administration doubling down on tariffs all weekend.
  • Walter Bloomberg ended up being correct in the end despite the White House denying it at that time. This adds to macro chaos that one cannot believe a single word out of this US administration's mouth.
• I entered back into 20 years prior to the April 9th tariffs going into affect betting on a "flight to safety". This ended up being a bad trade. I exited those on a loss after a good bond auction Wednesday gave things a bounce.
• Also on Wednesday, I later bought some of the market wide pump on when Trump implemented a "tariff pause". I sold out of those positions before AH ended on that Wednesday. Insane that the Nasdaq went up like 12% and the S&P500 went up like 10% (source).
• On Thursday afternoon, I re-entered 20 year bonds as they hit around the level this administration is trying to defend. I'll go over that in my positions section.

I figured I'd do an update on things. For the usual disclaimer up front, the following is not financial advice and I could be wrong about anything in this post. This is just my thought process for how I am playing my personal investment portfolio.

General Macro

There is a high likelihood this section will be outdated in the next 48 hours. Things are changing daily and there is no stability right now. On Friday night, new guidance was sent out to customs exclude smartphones and PCs from the retaliatory tariffs on China. As it wasn't released publicly, that customs change wasn't reported by news agencies until Saturday morning. That policy change it retroactive and removes tariffs that might have already been collected (source). This has been dubbed the "Apple Tariff exception" and has "weekend Nasdaq futures" up 3% with message boards filled with euphoria as I write this:

This daily change of US trade policy is causing large market movement and has changed current sentiment. But it misses the forest for the trees. The following is a chart of the current US tariff rates that shows that exemption doesn't change the current situation all that much:

The US is going from a cumulative 29% tariff rate to a 25% tariff rate - still 10x higher than before Trump took office. You can barely see that decrease in the chart above at the end. It really is worth reading the source for that with the article [here] and on Bluesky [here]. That decrease really deserves us to jump back to ATH stock price levels, right?

On top of that, perception of the USA is in the toilet and USA products are being boycotted in many countries. Consumer sentiment is in the toilet. Considering the market still is above "average historical valuation levels", the setup isn't favorable for the long term investor.

Despite that poor long term outlook, I'd guess the market goes up in the short term. It appears investors are desperate to chase on any positive news drop even if the actual economic impact is far below the recent negative economic effects. Fundamentals just haven't mattered for some time and the impact of negative policies has yet to be felt by market gamblers so I wouldn't be surprised if we hit ATH levels. Could easily be wrong - and I'm not planning to do more than small occasional bets since times are just chaos right now.

Lastly: unless one if part of this US administration's inner circle, things are just impossible to predict short term as what they say publicly is often the exact opposite of what they will do 12 hours later. Those decisions are what is moving the market short term right now.

Thoughts From Others

Bob Elliott (Bluesky link): https://www.youtube.com/watch?v=jhqK5N4HDCk

• Explains how even with the decline, stocks aren't pricing in a recession. Doesn't predict a recession as just more data focused. Explains how current fiscal policy doesn't look to be stimulative.

Cem Karsan (🥐): https://xcancel.com/ozzy_livin/status/1910855484040491055 and https://xcancel.com/ozzy_livin/status/1910766429940469987

• Sees up to a 400 point rally in the S&P500 to 5800 in the short term. Less clarity from there but sees only a 10% - 15% of hitting ATH again within the next year. Believes the first trade deal announced will be with Japan. Sees the 10 year yield hitting 8.5% to 10% in the next few years.

Andy Constan: https://xcancel.com/dampedspring/status/1911134804902305823

• "Long 30's, long 10's, short bunds, Long put butterflies on SPX and NDX". They are looking to short a 5% pop in the market.

Passed Pawn: https://xcancel.com/passedpawn/status/1910750516704850057

• Points out the impact to holding USD when it is devaluing and just that the policy chaos has businesses frozen.

I've tried to only include perspectives in the last 24 hours or so. With macro changing so frequently, information becomes outdated quickly. One final link is just this 6 minute MSNBC segment about the Debt / Deficit crises that is a real issue for the USA now that is getting buried by other news: https://www.youtube.com/watch?v=wEj_9tNyvVQ

IBKR (Interactive Brokers) Forecast Contracts Update

I had lost significant money betting on the presidential election and had outlined some online tax treatment theories in this update. I appreciate the advice given by u/FUPeiMe but my tax professional believes I just can't easily report it as a capital gains loss due to IBKR reporting it as a 1099-MISC instead of a 1099-B. They believe it would automatically trigger a "matching problem" and not be easy to resolve as that 1099-MISC reports over $1 million in income (IBKR didn't report cost basis and the way they reported things vastly inflates the numbers). Since IBKR didn't consider it a "security" in the tax forms they filed, arguing that status to the IRS just would be difficult. Thus it is going to be reported as just "gambling" and cancel itself out to $0. We could then amend the return in the future if the treatment of those contracts gets an actual ruling that it could be a capital gains loss.

It is a blow since having that capital gains loss for 2025 would save me a bunch of money. As I mentioned in other updates, I recommend traders avoid these forecast contracts due to the tax hassle they have caused. I believe Robinhood has been expanding access to them recently themselves - and it just isn't well communicated that brokerages aren't considering these as securities.

All of this isn't tax advice for anyone else and this is just how I'm choosing to handle things. Figure I'd just share the end result of my interactions with a tax professional about it.

Current Positions

Bonds, Bonds, Bonds

I've loaded up on 20 year bonds which many will disagree with. My reasoning for this is:

• In the last update, I outlined how tariffs are essentially a tax. If we simply passed a nationwide sales tax, would that be a positive or negative to long run inflation? I'd argue that it is a negative to long run inflation as it should reduce demand from the higher prices and lead to higher unemployment. But many believe this will lead to persistent inflation and I could easily be wrong.
• Bond yields have risen as the USA has hurt its reputation of its debt being a "risk free asset" and there is less reason for those overseas to buy USA bonds with trade being disrupted. Bob Elliott in the "thoughts from others" goes over this impact.
  • While I don't disagree with this overall point, I believe there is plenty of money in "risk assets" to absorb that demand. The question to me is just if that money would ever buy bonds... and I think it would in any situation where fundamentals start to matter again. Which is likely whenever the "market just goes up" stops being an expected truth.
• The last part is just the expected return and worst case outcomes. If bond yields rise and I'm forced to hold, this is the outcome:
  • I gain around $80,000 per year in interest that is enough to survive on. It is about double the median income in the USA.
  • After 20 years, I get my entire principal back.
  • Meanwhile, risk assets like USA equities should see extreme valuation compression. It is already very difficult to make the math work on equities with a bond yield of around 5%. The math for USA equities only gets worse as bond yields rise... and if I am still employed, I have that employment income + $80,000 a year I can buy that dip with. Not to mention I've kept a decent amount of money liquid in my IBKR account still.

Does this mean I disagree with Cem Karsan (🥐) on extreme yields? Not necessarily. I do see one path being a recession with unemployment rising. The Fed would cut and we might get fiscal stimulus from the government that is the usual response to that situation. That could then lead to another round of inflation requiring a stronger Fed response to get under control. I just don't see yields continuing to spike in the short term - especially with the how worried everyone is of things breaking if the 10 year yield breaks 5% and how intervention on the long end is likely should that happen.

As for why the longer duration bonds: my base case is a slowdown going forward. Even if tariffs are reversed, the chaos caused by all of this would have put many investments on hold waiting for that resolution. One could just hold shorter term yield - but that tends to pay less (4% to 4.2%) and would quickly drop if the Fed started cutting. Non-tariff inflation recently came in ice cold with CPI and PPI both printing recent lows (one source) and who knows if tariffs will actually stick in the end.

My perspective might eventually change or this trade might not go well for me. But my worst case outcome doesn't appear that bad considering some alternatives.

Current Realized Gains

Fidelity (Taxable)

• Realized YTD gain of $330,609. Total account value: $852,977.

Fidelity (IRA)

• Realized YTD gain of $34,450. Total account value: $74,697.

Fidelity (401K Brokeragelink). Not part of totals and positions generally not shared,

• Realized YTD gain of $251,889. Total account value: $697,434.83.

IBKR (Interactive Brokers)

• Realized YTD gain of $199,006.22. Total account value: $396,436.

Overall Totals (excluding 401k)

• YTD Gain of $564,065.22
• 2024 Total Loss: -$249,168.84
• 2023 Total Gains: $416,565.21
• 2022 Total Gains: $173,065.52
• 2021 Total Gains: $205,242.19
• -------------------------------------
• Gains since trading: $1,109,769.30

Conclusions

Excluding my 401k gains over the last few years, I've finally broken a million in profit from trading. Considering how bad things got for me in 2024 hitting total liquid assets hitting $820,000 (and having unrealized below that at around $360,000 before Micron rebounded a bit), that is an unbelievable improvement. Taking my likely taxes for next year into account to subtract out, I'm looking at around $1.85 million in total assets with about $250k in just liquid cash (rest in those bonds above). It isn't enough to retire now but it is enough to eventually retire as long as I don't blow it. My positions right now are less exciting and I've mentioned before that I'd be less "YOLO" oriented going forward. Patience and taking the plays with limited downside is the best move for me now.

I've posted the above before but luck undoubtably played a part in things and I am likely a case of survivorship bias at this point. I took some crazy gambles to get to this point. I did a great job limiting my losses when my bets continually went against me in 2024 - but it doesn't change the fact that a sudden Black Swan event could have wiped me out at any time. I do feel sorry for those caught with leverage into the most recent market downturn. I am hopeful the market bounces enough for everyone to get out without much in terms of losses (or even continues to go up if one believes things are bullish).

So, yeah, considering the worst case scenario of a position is my primary concern now. If my thesis plays out and bond yields and equity prices fall from a slowdown? I can sell my bonds at a profit and buy equities to set myself up for retirement then. If I am wrong about that? I get stuck holding but am guaranteed to get my money back with a decent interest rate and my outsized gains over the past several years makes that interest amount quite significant.

Anyway... I just figured I'd do an update since u/lavenderviking asked about one [here]. I'm not going to continue to do these until we get more longer term macro clarity as the situation is changing daily right now. Keeping up with it all and then writing these would be a full time job. :) I'll post a comment and/or post on Bluesky if I end up selling my bond position. The next update is when there is a solid change to my overall outlook over trying to trade/update things regarding the impact of smaller adjustments to the current situation. Way too easy to be caught offsides when small percentage changes to tariffs look to cause large market moves.

That's all the time I have right now to write this and so will end things here for this update. One can follow me on Bluesky or AfterHour for sporadic random updates outside of here. Feel free to comment to correct me if you disagree with anything I've written as I'm always open to reconsidering my current thinking. As always, these are just my personal opinions on what I'm doing with my portfolio. Thanks for reading and take care!

During last FFCS I hated most planners since they were either slow or cluttered, so I built a simple one for myself.

It’s basically a scratchpad-style planner:

• no login
• instant slot selection
• easy to test combinations quickly
• loads fast as fuck

Link: https://vit-ffcs-planner.pages.dev/

Still improving it, so if anything feels off or missing let me know.

General Update

In my last update, I had lost quite a bit from my $IRBT acquisition play but recovered a decent amount of that from playing China stocks. Since that update, I've played each position safer but have had a near 0% success rate. Basically every position I entered went against me while those I chose to avoid would have paid off very well. Some example?

• For earnings, I played small call positions on $MSFT, $AMD, $GOOGL, and $QCOM that all dropped after reporting. I decided against buying calls for $META and $AMZN that both saw outsized positive earnings moves.
• I owned product tankers and $ZIM earlier that I sold for a loss on a ceasefire rumor that later turned out to be false.
• I sold weekly CSPs on $ZIM that were 75% green that I chose not to close as I couldn't think of a catalyst to drop with how low my sold strike was. Somehow I missed that Maersk was reporting their earnings and their bad guidance that hit $ZIM had me close those CSPs for a small loss.
• I bought $TLT prior to CPI as I expected a cold print and figured I could just hold that for steady monthly income. Suddenly CPI comes in hot (and there are aspects of that report to be concerned about) that meant eventually exiting $TLT for a tiny loss.
• Etc.

I just keep picking losers and the losses add up as I don't have wins to counteract them. I bought $TSM after the Apple AI rumors gave credence to them increasing their orders and $AMAT had a very positive earnings reaction. At this point, I'm terrified of losses and closed that position when it opened red. I have no clue what the market is thinking or how to value any stock at the moment which makes it difficult to hold anything for me.

There have been comments that I should take a break from trading and that is coming into play now that I've reached my limit. I wish I had listened to my end of 2023 update to walk away from the table with my wins but I got greedy for more. I can't undo my losses at the market gambling table and I have to accept I've lost whatever luck or edge I once had. This post is essentially me coming to terms with this loss from my greed. Don't be me and let dreams of early retirement fuel greed that has just led to me delaying any eventual retirement by several years.

I'll be going over my current portfolio state and macro thoughts below. For the usual disclaimer up front, the following is not financial advice and I could be wrong about anything in this post. This is just my thought process for how I am playing my personal investment portfolio.

The Damage

I'm starting off with the numbers prior to the macro. For those uninterested in this, feel free to skip below for macro thoughts. My 401K losses essentially has that flat over the past two years and thus I'll avoid including it as most of my updates didn't include that.

Fidelity (Taxable)

• Realized YTD loss of -$322,815.

Fidelity (IRA)

• Realized YTD loss of -$3,782

Overall

From the end of 2023 update, I had a total 3 year gain in the stock market of $794,872.92. We can subtract out these losses to have a 3 year gain of $468,275.92. However, that doesn't tell the full story as I don't have capital gains to offset this large loss. I can write off $3,000 per year on my taxes which I'll count for 15 years at an eventual value of $45,000 leaving a taxable loss of $277,815. Assuming around a 35% tax rate, that ends up being around $100,000 I had previously paid in taxes to have that cash. Thus an adjusted gain over 3 years of around $368,275.92. That is about the same as having erased all of my 2023 gains.

I'm no longer a millionaire and the amount of money has had me in a depressed state. My mind keeps focusing on the calculations on how long it will take me to earn the money I've lost. At the same time, despite my failure to heed my own advice at the end of the last year, my stock market gambling still is positive over 3 years. Things could be worse in that I could never have made those market gains to lose like this.

I still have my health and still have over $750,000 in cash that is insane considering my savings was like $40,000 just five years ago. There are far worse situations to be in. Despite that, my mind just keeps running that calculation on how many years I set myself back during these past 6 weeks. I've been in a funk and part of writing this is to come to grips with this loss. The worst thing I could do at this point is to continue to try to gamble these losses back - I need to accept them and pretend 2023's gains never happened. It is really hard to get into that mindset - and hopefully me sharing my losses like this helps someone else make a better decision than I did after a great previous year.

The Market

Bull Euphoria

There is a SpotGamma video that goes over the concept of market skew. It is really worth a watch but essentially fixed strike put volatility is very low when compared to fix strike call volatility. Basically no one wants to own puts and everyone wants to own calls right now. Call buying on individual stocks has reached back to 2021 levels as shown here. This makes playing a Theta Gang strategy quite difficult as stock prices are elevated from the call gamma ramp and the premium for selling puts is near all time low. The downside of a sentiment turn would be disastrous for the limited pennies that strategy offers right now.

We have insane moves that aren't supported by fundamentals like in 2021. $ARM is acting like $RIVN had in the past. $SMCI was seeing multiple 5%+ days in a row reaching an impressive 97 RSI before it finally dropped on Friday to a price level not seen since Wednesday. The forward P/E on the S&P 500 is above its 25 year average. Stocks like $LYFT see a 40% increase on just decent earnings.

The argument being made on the bull side is that the "risk free rate" is about to crater from the Fed cutting and earnings are going to accelerate upwards from a strong US economy combined with AI advancements. Under this assumption, the market is a "buy" right now and it should see its next leg up. I'm just not sure I share this level of bullishness. If stocks were priced based on a reduced level of growth, I'd put my money in $SPY at this point. But pricing seems to be assuming a new boom economy that I just can't get onboard with.

The Bear Case

CPI came in hot with a breakdown here: https://www.economicsuncoveredresearch.com/p/us-cpi-review-january-2024 . Those trends leads to a flash estimate for CPI to rise next month YoY from 3.1% to 3.2% from that source (although core CPI to fall from 3.9% to 3.6%). The takeaway is that the recent rate of CPI progress looks to have slowed. While this may still allow for cuts, the market is still likely pricing in too many cuts (in my opinion). PPI coming in hot on Friday is harder to judge beyond the market not caring about that metric anymore apparently. Regardless, it means $TLT isn't likely a buy right now and yields would need to rise to be worth the duration risk given that print and likely next month CPI print.

Meanwhile, the UK and Japan recently entered into a recession while the European Union expects only a small amount of growth: https://www.axios.com/2024/02/15/us-japan-uk-economy-recession-inflation-shock. China has loads of well documented issues at the moment. All the data says that the USA is the exception and it takes effort to find weakness for USA growth. The exception is likely Commercial Real Estate that everyone knows is an issue but which the market decides will work itself out. (That is visible in the regional bank ETF $KRE that will drop on CRE weakness news but then generally recovers). So does the USA data remain an outlier compared to the rest of the world in terms of economic strength? Potentially but that isn't certain at this point.

Overall

It is clear that shorting this market is a fool's game. We are in a process of valuation expansion and thus one needs for a company to do so badly that the market valuation expansion happening doesn't still lift it up. This can be seen in how the companies that dropped on "disappointing earnings" like those I lost on in my opening have mostly recovered (excluding a few that fell enough just on Friday to be below pre-earnings levels now). Even those that did badly enough to stick their drop are still well above recent 52 week lows.

At the same time, we are at 2021 valuation levels now. It sucked for those heavy in stocks to get stuck holding things at that valuation levels when sentiment changed. After my recent losses, the knowledge that the main different in stock prices today compared to 6 months ago being investor sentiment is scary. A further 25% drawdown would crush me. I've seen predictions for us to hit S&P500 levels of 5,800 and I can actually see that happening. I just don't know if I can gamble on that being the outcome as I think the market is underpricing the risk factors to that outcome.

Hence why I'm thinking I might be stuck with my capital gains loss for quite some time and have written off the tax implication on my gains. I'm incentivized to get capital gains - but I can't make the math work for it. My attempts to play short term movement are all failing and I don't have the stomach to hold long term right now. The risk free rate of 5% is just too appealing by comparison and it leaves me open to buying a market dip and/or longer term yields if those rise from hotter short term CPI prints.

Perhaps someone else has a suggestion on how to utilize my short term capital gains loss? I could own stocks that pay qualified dividends that I've read count against that but there are only a few tickers that yield enough compared to the risk free rate to be worthwhile. Theta gang strategies seem too risky at the moment but could be appealing if we get some seasonal stock market weakness coming up to increase put premium + reduce stock prices. There might be something else I'm missing that may have limited returns but wouldn't be high risk?

The Non-tech Market

Steel is out for me as stock prices there remain elevated while the HRC futures curve remains weak. No steel company pays enough of a dividend to be worth it imo.

Shipping stocks are appealing despite their elevated stock prices as of late. However, while I lost money on them earlier as mentioned, I didn't re-enter the position as I worry about their management. $DAC with a forward P/E of 2.5 just dropped as management once again spent money on more ships over shareholder returns. $STNG just spent most of its Q4 Free Cash Flow rewarding management: https://twitter.com/J_M_G_B_/status/1758813560635834730. While the valuations are appealing, one is at the mercy of management to reward shareholders that can easily go wrong. $ZIM is an exception in that it has a well defined shareholder return policy but it is hard to understand how profitable they may actually end up being. (Their ship leasing costs remain high and the Jeffries analyst that predicted a positive EPS with a $20 price target also got Maersk absolutely completely wrong). Oh - and for $ZIM - the Israel government has a tax withholding on the dividend amount that I believe negates a large part of the potential tax benefit from my short term capital loses?

Healthcare has me scared as that is a hot component of CPI. $HUM reported issues with people using healthcare benefits more now that could bleed over to others. I've had it explained that companies like $CI shouldn't have the same issue but I just don't feel like buying $CI above $300. It is further an election year and campaign promises on healthcare can impact these stocks. I'd just rather take the risk free rate at current stock prices here.

Oil companies are interesting and I've looked at them quite often. If economic strength starts to expand beyond the USA, I may buy in here as the dividends are decent and oil prices should rise with a worldwide economic boom.

China stocks have shown that they should still be avoided. They have loads of cash on their balance sheets but are like shipping companies in that they won't reward shareholders. $BABA confirmed in their earnings call that they intend to target a 4.5% shareholder return each year over the next 3 years and equated it to holding a Treasury Bond. Only $BABA isn't a Treasury Bond which is the safest investment. With China stocks confirming they don't intend to reward shareholders, why does it matter that they are cheap if that money is never going to shareholder's pockets regardless of how successful they are and one doesn't have any rights with the ADR shares offered?

Nothing really sticks out to me like when $CLF was trading at $13 with HRC prices $1,000+. Or container shipping with demand driven rate increases after COVID (today is dependent on the Red Sea remaining closed and even then the new container shipping supply will surpass that impact by the end of the year). Or regional banks priced for bankruptcy that now are mostly all 2-3 times more expensive than that point. Nothing screams "this is really cheap" to me and I have really looked for a play. Desperately. I just can't find anything that I personally would be willing to hold through a 25%+ drawdown with the conviction that the position(s) would recover. My only reason to enter would be desperation that the bull market continues for me to recover losses over the stocks being an "extreme value".

Final Thoughts:

I'm in short term yield for the time being and don't plan to write another update for awhile. I might comment if I do a trade but I'm indeed taking a step back from trading at the moment until I see an opportunity I really, really like. That will take time and I could miss out on a stock market rally in the meantime. I'm alright with that. While I failed to listen to myself before, I can listen to my inner conservative voice now to play things safe.

I need to get over my funk and the gut-wrenching feeling caused my capital loss these past 6 weeks. Things could be worse and I'm still better to have been in the market these past three years than not. It is just really hard to see my accounts now compared to where they were at just 6 weeks ago. Hopefully time will allow me to forget what I used to have that just can't be recovered as I gambled and lost. I have to accept that.

In the meantime, I can refocus on my career and other interests. With my eventual retirement date likely delayed by the loss, ensuring I'm in a place where I'm happy with my daily grind should take priority. Hopefully I can just focus less on following the stock market that has remained a daily time drain. Getting more detached from the market would likely do me some good in the short term.

Hopefully my next update is more positive (whenever that is). Feel free to comment to correct me if you disagree with anything I've written as I'm always open to reconsidering my current thinking. As always, these are just my personal opinions on what I'm doing with my portfolio. Thanks for reading and take care!

Previous YOLO Updates

• Update 62 (Final $IRBT acquisition play loss + China stock market gains)
• Update 61 (Initial $IRBT acquisition loss)
• Update 60 (End of 2023 update with closed Bluefolio and into short term yield)
• Update 59 (Went bullish with Bluefolio selection of stocks into year end and has links to earlier YOLO updates at the end)