Lemur Journal!

Where are you and where are you going?
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Lemur
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Re: Lemur Journal!

Post by Lemur »

- Purchased LEAP on Visa. Will be running the PMCC strategy to lower cost basis.

V 01/20/2023 C $190.00 for $49.51.

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Lemur
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Re: Lemur Journal!

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January 1, 2021

Investments:
Invested - $345,400
Cash Savings - $6,800
Total - $352,200

Financial - Fun. Up another $18,300. Having fun with trading options and learned quite a bit the past 2 months. I now have LEAPS on AMD and VISA. For both of these, I am also selling calls against them to lower the cost-basis (this is called the Poor Mans Covered Call). I am also using about $25k to run an option wheel on PLTR. Selling puts at the moment but likely I'll be assigned the capital at $25 per share in January as I'm below the strike price and PLTR began a downtrend. Holiday expenses are over but since we're moving, those expenses will increase.

Physical Health / Diet: Maintained right at 180lb but did have to diet 5-6 or so days in December. Have done a lot of physical activity lately and even started jogging again...periodically. Tough to make a habit right now but I'm at least somewhat consistent.

Mental Health: Varying degrees. Not having a contract at work sucks but I am starting to relax about it. I've been so focused on options trading and moving, the job has been mostly in the back of the mind.

Job: On the bench. Government negotiations start again Jan 8.

Gardening: None. Once we're moved, I will begin the great debate with my sister on where I am allowed to plant. She doesn't want garden beds in the front of the house which is ridiculous to me as some of the neighbors garden in the front because we live on a hill and the backside is just a long downslope where its tough to work or even do anything.

Family: Moving further south in my Sisters recently purchased home. We're taking the basement and paying $1200 rent which includes utilities. We will be 20 minutes closer to my immediate family (Mother & Brothers) but further from my Grandparents. My Son will also be 3 miles or so from the nearest elementary school. He starts school this year in 2021.

Other: Still periodically reading The Moneyless Man by Mark Boyle. Studying more options strategies. This month I'll be practicing running DCF on some of my stocks as I have not performed those calculations in a while. I am having a tough time thinking about 'the discount rate'. We're in such a weird environment.

Goal Shooting for a very aggressive goal which will not only take a continued high savings rate, my Spouse's continued business success, and a few lucky options trade....want to hit $500k by end of 2021. This assumes the market either stays the same or increases. I believe $400k is definitely doable but $500k is lucky.

Cheepnis
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Re: Lemur Journal!

Post by Cheepnis »

Lemur, you're kinda killin' this whole active portfolio thing. Good job, you're making it look easy!

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Lemur
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Re: Lemur Journal!

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Lemur: 46.7%
2020 S&P 500: 16.26%

Thanks Cheepnis.

Yeah this was a life changing year. COVID crash happened and I switched to active investing...went heavy on MSFT, SQ, and AMD. SQ I sold nearly 300% return. I still hold MSFT and AMD.

Hope to carry success in 2021. Taking calculated risks was and is a new mindset I’m developing constantly.

I keep getting this feeling that the line between skill and luck is thin. But what I do know is that I struck the science vs art of actively managing well last year. You won’t get these returns by passive investing...but I still believe the data shows that a passive investor will win out in the long run. All I need is one bad year for that to ring true.

But in the initial stages of investing and building a portfolio...more people ought to learn calculated risk taking. A 300% returned investment is a life changing situation for ones portfolio. Takes money to make money afterall. For instance, if S&P beats me next year...will it matter? Because the dollar amount of my portfolio still exponentially increases from one strong year early on.

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Lemur
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Re: Lemur Journal!

Post by Lemur »

6 weeks without billable work....I'm probably on some labor cost cutting list somewhere at this point but I do have 2 pending contracts. One for a Fed Gov't client (Jan 8 negotiations that I've mentioned before) but on another short-term proposal now to help out a bank to automate some database processes (fun actually; hope we win this). I have yet to work for a commercial client / private client my whole career so that should be interesting.

If these fall through then I really think the plan is now to play it cool but start job searching....

Spouse objected to any ideas of me taking a year off lol. No amount of numbers and graphs helped. I can't blame her...we've such great momentum right now. I need to 'snap out of it' whatever this funk I'm in.

Note to self when I start working: I'm a mess without work. It is what it is...I tried to meditate on these thoughts (literally) but came up with nothing for root cause. Its not that I care what others think of me ("look at that bum who is not working") its more like...I feel like I have to be doing something? Or is that I personally feel useless if I'm not working? It definitely does not help its winter. Outdoor activities are nonexistent. I'm stuck in a house ...not going outside...with no work to do but twiddling my thumbs waiting for proposals to work out.

IDK but what I do know is that some of this is attributed to cognitive distortions. Perhaps the inertia of perceived unemployment rattles me because I worked strategically and made a lot of maneuvers to get to this point... ($15 an hr...to $55k salary...$65k salary...$90k...$93k over the span of 3 years or so). I do a lot of catastrophizing I think (All I have worked for is gone and I'll never get a job again because its all automated!).

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giskard
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Re: Lemur Journal!

Post by giskard »

Lemur wrote:
Wed Jan 06, 2021 2:53 pm
Spouse objected to any ideas of me taking a year off lol. No amount of numbers and graphs helped. I can't blame her...we've such great momentum right now. I need to 'snap out of it' whatever this funk I'm in.
That's bummer but also, prob a good idea to keep on the train - you are really on a roll right now! Nice work on the trading gains.

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Re: Lemur Journal!

Post by 2Birds1Stone »

KILLER progress.

Think about it, between DW and your job income, and investment returns, how long will it take to double your current net worth, twice? Do that and you're at $1.4M!

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Lemur
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Re: Lemur Journal!

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About time....finally got a W after nearly 2 months of L's. Getting on-boarded to my next contract :) This one has 4 years left on it. If all goes to plan, I should be 25x+ expenses by that time too...

Telework likely for the remainder of the year. I'm excited actually. Sure once I get back into a rhythm, I'll start dreading being locked into the laptop for 8-10 hours a day...but I'm mostly happy I can keep the momentum going with the net-worth increases.

Investments - Still successfully wheeling PLTR options. I'm up on AMD PMCC strategy. Slightly down on Visa. Feeling some FOMO still with the EV / SPAC booms....started debating today if I should just sell all my WMT stock so I can start some plays. Then I decided not to do that because whatever I'm doing right now is working so...lets not mess up a good thing. But Black Berry is tempting though... My next after-tax savings for the next few months will be dedicated to maxing out my tIRA which is all index funds and also where I'm holding my AMD Long Call.

We finished moving to the new place (My sisters home where we're occupying the basement). Its a very quiet place in the suburbs ....almost too quiet. Pros of basement living is our room has no window which is great for me; no light makes it easier to sleep. There is a dehumidifier that has to run all the time though due to moisture in the air and previous mold that had to be eradicated before our move in. This should help prevent that again? Another pro is that there is almost zero temptation to drive out anywhere for frivolous purchases....we're just so far from everything. 12+ miles. Driving will have to be used strategically now - if we're not home, use trip for multiple purposes. The big con is being so far from the USPS / UPS; this created an annoyance for my Spouse and increased transportation costs for her business.

As long as I'm teleworking we will remain in this location.

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Lemur
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Re: Lemur Journal!

Post by Lemur »

Finally ....administrative work is almost over with and I should be working for my new client next week.
Another surprise today my employer give me a retention bonus...despite me not billing anything for 2 months.

Maybe a long-term play on their end because we were able to secure 4 years work. 4 years worth billing > 2 months of not billing. Best to retain employees with prior experience with the client.

In either case, I'm ready to get back into routine.

_bb_
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Re: Lemur Journal!

Post by _bb_ »

Lemur, I just finished binge reading your journal. Thank you for sharing your thoughts and journey, and what a journey it has been. I really appreciate all of the links to various articles and videos.

Given your active portfolio management, maybe you'll find this interesting: https://en.wikipedia.org/wiki/Kelly_criterion

I see similarities in our financial situations but there is one major difference, I am child-free at the moment but that is likely to change in the next few years. If you don't mind disclosing, what percentage of your expenses would you say are 'generated' by your kid and how has that changed as they've grown?

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Lemur
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Re: Lemur Journal!

Post by Lemur »

@_bb_

In general, not expensive at all unless you end up with a child with special needs.

A baby is pricier than a child due to some extra items and diapers (though if you can convince your Spouse to go the cloth diaper route this is cheap) but costs reduce past 3 years old or so. I couldn't convince my Spouse to do cloth diapers so we bought diapers about $35-$40 a month. In this case, we found the cheap diapers cause rash...and mess lol. So went with the Pampers.

Having a child though is really not expensive. Child needs shelter, food, clothes, entertainment, socialization, and a loving home. Food - I was surprised at how much a growing boy can eat; my 5 year old eat like a monster. A quick google says 1500 calories for moderately active which sounds about right. By default, this is the most expensive. Clothes is real easy; either thrift stores, goodwill, and occasionally at Walmart we might see on sale shirts/pants for $3-$4 on sale or so. We always buy a size up so the clothes last longer. Entertainment...toys (mostly free or cheap), Netflix (lots of kids shows), books (libraries are free), and my favorite is going to the park. I love going to the park because my Son can run around and burn some energy and I can do pull-ups, pushups, and take him with me on a jog through the trails. Also gives my Spouse her break. Socialization has been a struggle with COVID-19 though but seeing as my Son will start school this fall, at least that will be solved.

Food - $100-$125 a month estimate...
Entertainment - Near $0.00. Occasional holidays but even then buying a book or toy or some kind of craft is cheap.
Shelter - Baked in to rent
529 (Optional)- I put in $100 a month. Once our retirement assets at 3-4% range is secured, I'll likely start bumping up contributions. I've no end goal here as I expect my child to work one day to cover some of the costs of school / trade school. Skin in the game is important IMO for adulting. Though I don't want to leave my Son with $0.00 either like my parents did.

The most expensive item was a car seat. Its a one time expensive. Personal opinion - to not go cheap on this lol.

I expect costs to increase as my son goes to school and gets older and wants to be involved in activities. It will be a new adventure but if one plans accordingly (especially getting school supplies out of season), then this doesn't have to be much. Just another line item in the budget. I do want to involve my son in some sort of sport or self-defense.

Yep this journal is just over 3 years old. ERE stipulates one will be done in the 5-6 year range with a 75%+ savings rate. When I started this journal, I was sitting in the 58k range for investments so already had a slight headstart and my savings rate was mostly in the 40-50% range in the beginning. Now I'm still bouncing around the 65-75% range since. I'm thinking goal will be met in 3-4 year range...hanging in there. As my net-worth increases, my apathy for 9-5 work grows as fast haha. You've probably seen my random musings and like a bad villain in a cartoon, random schemes to try to get out of it but those usually fail. Golden handcuffs sure do suck.

Thanks for this link on the Kelly Criterion. I'm gonna have to read through this. I get a quick sense that I'm doing something like this already but this can be incredibly useful because I can substitute options delta for the probability in these formulas and play around with them.
Last edited by Lemur on Tue Jan 26, 2021 1:37 pm, edited 2 times in total.

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Re: Lemur Journal!

Post by jacob »

_bb_ wrote:
Sat Jan 23, 2021 10:39 am
Given your active portfolio management, maybe you'll find this interesting: https://en.wikipedia.org/wiki/Kelly_criterion
No! Bad idea.

_bb_
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Re: Lemur Journal!

Post by _bb_ »

@Lemur, thank you for the explanation. I will come back to this when the time comes :)
You've probably seen my random musings and like a bad villain in a cartoon, random schemes to try to get out of it but those usually fail.
Wile E. Coyote comes to mind :lol:

And yes, regarding the link provided and Jacob's note above - in practice it would not be wise to only follow a formula for position sizing. Personalized, mechanical rules are probably safer and more reasonable.

I still think you'll find the subject interesting.

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Lemur
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Re: Lemur Journal!

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Oh my portfolio sizing isn't changing anytime soon. All my stocks (only 5 now but can become 6/7 if I get assigned from ongoing CSPs ) have price targets...when I collect premiums from options selling, I just allocate to the one that has the highest margin of safety or the one I think is due for a short-term run-up. Lately, that has been AMD since AMD was pushing past $100 but then dipped below $90 recently.

I was thinking of Kelly Criterion in terms of taking a small amount of money...maybe like $1000 or so and just making wild bets on it. I still won't do it though. Just like I don't like the lottery, I don't like OTM call options either.....I already learned me lesson on those last year :( .

PLTR $30 Call Options expiring last Friday increased by 9900% though lmao.

For the record, I'm holding MSFT, AMD, WMT, V, AAPL in order of largest to smallest market value. Running rolling CSPs on PLTR as long as IV remains high. I've a couple grand on LEAPS for AMD & V that I'm selling calls against as well (PMCC) and CC's on my stocks. This is just my active account. My IRAs are just index funds.

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Lemur
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Re: Lemur Journal!

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So...some things are really trending right now in the market: retail investors trying to gang up and take advantage of short sellers by googling things like "short interest" ratio and the like. I noticed big upticks on google trends. Not only GME, but other stocks as well. My thesis: the hedge funds and institutions may preemptively catch on to this and start covering their positions ahead of time. Is it possible that retailers could scare them into this? Maybe / Maybe not...but Lemur believes a risk here is worth it.

I decided to take a shot at this with a play that keeps coming up on these 'short interest' lists. The Macerich Company (MAC), a REIT, with high short-interest of 58%. Despite the COVID environment, MAC still produces a dividend and has recently been turning around its vacancies with new tenants: https://wamu.org/story/20/12/18/despite ... sons-mall/ . Earnings will be reported February 11 which should be another catalyst for this stock.

MAC had a recent uptick today like with GME, BB, and the like probably due to the short interest euphoria. Either institutions are preemptively going to start covering or retailers are going to continue piling into these during the euphoria. Or best case - maybe both in the short run. I aim to be a part of that wave on MAC but with capped gains to take advantage of the temporarily high IV and for risk management reasons.... Here is what I did (all in my traditional IRA):
  • Sold 505 Shares of VXUS ETF for $4700 Gain.
  • This freed up $31,232 in capital.
  • Purchased 1544 shares of MAC for $20.22 ($31,219.68 total...representing roughly 8% of my total investments).
  • Sold 15 Covered Calls @ $30 strike for $3630 Premium (February 19 EXP)
  • MAC effective cost basis reduced to $17.80
  • Used the premium to purchase 18 shares of VTI (Vanguard Total Stock Market ETF)
So this can go a few different ways:

1.) Best case scenario is that MAC reaches $30+ by February 19, I will see $15,100.32 in total profit (not counting premium) and a ROI of 48.37%. I give this a 10% chance of happening like I want it too.
2.) Stock trades sideways or even starts falling for a while. I am to keep selling calls against it to reduce my cost basis further. I will come out profiting if my shares get called away eventually as long as I'm called away above my cost basis via the strike price on the calls and the price of the stock doesn't fall below my cost basis. This is most likely what is going to happen I think as I handle MAC watching for a few months.
3.) Stock takes a tumble. I put the floor at $10 a share based just on looking at historical trends. I end up holding for a while; maybe try to get out and break-even or hope for a turn-around recovery.

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Lemur
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Re: Lemur Journal!

Post by Lemur »

Made another large move after seeing organic buying power on NOK and unusual options activity. It was easy to get in at a nice 12% discount.
  • Sold 221 Shares of VTI for $43,508.27. Took a $14k gain.
  • Purchased 8000 shares of NOK for $45,520.00 at $5.44 a share.
  • Sold 80 Covered Calls Expiring February 5 for $0.70 for $10 strike. Premium $5,520 after commission.
  • Reduced cost basis to $4.75 a share.
  • Used the premiums to buy back into VTI.
Like with MAC, if the frenzy plays out on this one, I stand to nearly double my money. If not, I have another long-play where I can reduce my cost-basis significantly as long as the options continues to be unusual and push the IV up.

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Lemur
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Re: Lemur Journal!

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Market dip today opened up some opportunities to get discounts on long-term plays. I finally invested in 136 shares in JNJ by closing out my short puts on PLTR. Apple is another good stock I hold that dipped today.

JNJ is a no brainer long-term with expected revenue/earnings increases from COVID-19 and likely increased sales in the next decade for keeping things cleaner....Also decent dividend and low PE (at least in this environment 30 is low lol).

This helps my portfolio as well to diversify some away from tech...and recent memes. PLTR is starting to reach overvalued territory. JNJ is my only healthcare / drug manufacturer holding.

I've been rolling PLTR CSPs since early December. All said and done, I opened and closed 6 CSPs. I collected $10,803 in credits and paid out $5,869 in debits. Ended up making $4,934. When I first started investing in PLTR, I sold the CSPs at $25 a share. Turns out - throughout all the volatility, I would've been better off just buying shares and holding and selling at $34 today. https://i.postimg.cc/c4fdwkr3/pltr-trades.png

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Lemur
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Re: Lemur Journal!

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January 30, 2021

Investments:
Invested - $350,000
Cash Savings - $5,000
Total - $355,000

Financial - Up only $2,800 this month which is slightly less than savings contributions. My portfolio is weighed down temporarily by decrease in AMD stock. That one is funny because their earnings beat expectations but their is concern about Intel waking up from the grave.

Actual significant savings last month with savings rate about 68% and my employer gave me a retention bonus which surprised me as I went unbillable for 2 months. A lot changed with my portfolio! I think the past few posts covered what I did - I sold off most of my index funds and invested $31k into MAC (narrative: value play + turnaround REIT + potential short squeeze) and $45k into NOK (narrative: 5G, cybersecurity growth, 6G, should take away contracts from China / Huawei, near book value). I also stopped options wheeling PLTR and invested in JNJ. Edit: Reduced my auto insurance by 60%. After I was raised by 39% I shopped around and found an excellent quote. Cancelling the former soon.

Current watchlist: PLTR (if it goes back down to $25 a share) and BB (keeping my eye on this meme....haven't done any DD yet on fundamentals & narrative).

Physical Health / Diet: I gained some weight. Too much. Think I weigh 185lbs or so which is just over 25 bmi for me. :? Too bored now that we're much deeper in the suburb...I'm still not working either. Sleeping in too much. Need to get this back on track. Think I''ll make a vow to get back down to 180 lbs by March.

Mental Health: Varying degrees like last month. Mostly just bored but having a lot of fun with meme investing lately.

Job: Supposed to get back to work soon. It would be nice actually to get back into routine. A co-worker of mine commented that I was extremely patient haha.

Gardening: None. Winter still. First year in new place, I don't think I'll have a plot. I think I'm gonna try out bucket gardening. Try herbs. Experiment with some other things.

Family: Settled into new home. My sister owns the home and is the landlord. Grandparents got their COVID vaccinations so that is good.

Reading / Other: Still periodically reading The Moneyless Man by Mark Boyle. Studying more options strategies and other financial stuff. Interested in picking up a book by Michael Parenti when I get the chance - I listened to some of his lectures and I was quite intrigued. I don't think I ever actually studied "socialism." The real Karl Marx kind - not American definition of socialism lol.

Goal: Don't lose my job. Stop gaining weight. Hope that either NOK or MAC is a big winner this year. I'm far too self-aware but I need to be careful ... https://en.wikipedia.org/wiki/Wishful_thinking

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Lemur
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Re: Lemur Journal!

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NOK and MAC both dropping on me hard. So I closed out my covered calls at profit and opened up new covered calls.

Reduced NOK cost basis from $4.75 to $4.69 with covered call at $6.00 strike expiring February 5.
Reduced MAC cost basis from $17.81 to $17.48 with covered call at $20.00 strike expiring February 19.

Was able to use premiums to purchase 6 shares of VTI.
At the end of the day...my goal is to not lose money than hold out for huge gains. At least one of these (premium profit) is guaranteed return.

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Lemur
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Re: Lemur Journal!

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NOK is coming back up. It is trading at my cost basis. Earnings report tomorrow.

Nice to see MAC finally approaching its bottom (hopefully). I have to admit - my stomach has churned a little bit. Never in my life have I purchased a stock and then saw it drop daily by nearly 50% in less than week. I bought at $20.22 - it is as low as $11.72 today.

That sort of volatility I am not used to.

Only reason I'm still holding is I think its bottomed. Its been a week of red days but finally starting to see green and also a great sentiment indicator - when retailers start getting scared and selling. That is usually a signal for a turnaround....seen this play out too many times before.

I'm also steadfast in my belief of the fair value at $30 a share. Not convinced enough to double down though. Maybe will consider if the stock gets under $10 - This did cross my mind...but I haven't dealt with these emotions before.

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