Thoughts of a mechanical engineer turned programmer turned statistical investor. Here to save you from making mistakes I made at the beginning of my investing career.

Ending the quarter on a high note – portfolio review

The nasdaq just closed the quarter up ~21%, bringing us back up above last Septembers highs, towards last August highs:

It has been a BRUTAL rally from November lows for the nasdaq, in all the right ways.

I haven’t done a portfolio review in a little while, so I figure its a good time to go over it before we start another quarter to give us a good starting point.

First of all some broad numbers:

Market value of portfolio is -177k$, so if all the positions expire worthless I will gain that amount over the next ~2 years, or 177/556 = 32% or 16% annualized.

But lets go over the actual portfolio because other than the LEAP short puts I have a couple of other things going on:

AAPL – Short puts and a double covered bear put spread (BPS) which are all on track to expire worthless. My exposure to AAPL is only 16k$ in margin, so I am looking to increase exposure there if the opportunity arises, but who knows if/when that will happen. For now, I’m happy waiting for my current 4k$ credit positions to expire over the next 3 years while only holding 16k$ in margin req, so an efficient use of margin.

ADBE – 1x short put position, this is left over from a previously rolled position which I have 2600$ of realized losses on, so despite that its showing 2400$ paper gains, overall on ADBE I’m down 200$ over the last year. The position is obv on track to expire worthless (and in fact 35% OTM) so lets wait it out a bit more before killing it, but this would be a position I would be looking to trim in the forseeable future, to free up room for other companies.

AMZN – short puts – finally perking up and green, although I also have ~1000$ realized gains on AMZN since last year, despite AMZN’s shockingly bad performance:

To be up 5.7k$ (1k realized + 4.7k paper) on a company which has the above graph is a testament to the power of using options to invest rather than buying stock.

BZFD – this is an AI long shot, but also just a tiny gamble. Buzzfeed is a content company with ad revenue, and started using AI to write content. I figured it may work out for them, so I initiated 2x 2-7 BCS for 300$ (max profit is 700$ with bzfd above 7$ in Sept expiry. I lost that money (for now) but figured theres still time so I figured why not double down and buy another 2×1-7 BCS for another 25$ (!!!) for max profit of another 1175$ in the small chance they do pop. Otherwise I’ll lose my 325$ but a gamble I’m willing to take.

FDX – short put, green, and is left over from a previous FDX position which I have 1500$ realized losses on, so even after that we’re green by 500$ on the whole play. I opened this a while ago I’m not 100% sure why, but this would also be a position I’d be happy to kill to free up room for other companies.

GBTC – coming back, another just a gamble, to have a bit of exposure to BTC. But honestly I’m looking to kill this as well and if I feel like it maybe buy some actual crypto.

GOLD – Although its showing “green” this is a rolled position which is quite red – I’m like 5k$ in realized losses. But its currently worth 11k, and not entirely on track to expire worthless, but there is still 2 years so we’ll see what happens.

GOOG – short puts green and on track to expire. I also have what I call a Phil spread – short puts with a bull call spread (BCS) on top of them. Its also green, and its a good way to increase potential profits without increasing margin requirement. So its a short 75$ put which is 25% below what GOOG is at today, with a 90-100 BCS on top of it, which is on track to be worth 1000$ at expiration. The Phil spread (PS) was an initial 348$ credit, putting potential profit on the spread at 1348$ with goog above 100$ on expiration. The short put is only requiring 1773$ of margin, so a potential profit of 1348$ vs a margin req of 1773 is a 73% gain, so a good way to boost profits in an up market, while the worst case is being required to buy 100 shares of GOOG at 75$, or 25% less than what they are today.

GS – This is a newer position, just to keep an eye on GS and pocket 850$ if they don’t lose >50% of their valuation in the next 3 years.

HD – also a newer position, and a reminder to keep an eye on them, and pocket another 1900$ if they don’t go down >30% in the next 2 years.

ICCM – biotech, just a gamble. Dead, as far as I’m concerned, but why not leave it until the company disappears (or comes back!).

INTC – Also a newer position and already green. Its another phil spread. Was a 250$ debit, with the potential to make 1750$ if INTC pops over 40$ in the next 2 years, and requiring only 834$ in margin, so potentially ~200% return on margin req over 2 years.

JPM – also a newer position and reminder to keep an eye on them, while pocketing 714$ if they dont go down 30% in the next 3 years.

META – Green and on track to expire worthless so might as well let it.

MSFT – Also a newer position and reminder to keep an eye on them while pocketing 569$ if MSFT doesn’t go down ~40% in the next 3 years.

MTCH – My biggest red position, but I don’t know how. This is the mother of most dating apps, so I just figured they would go up. Hopefully they will, maybe they wont, but lots of time left, and I can potentially roll the position down and out next year.

QCOM – also a newer short put. Ill take your 850$ to promise to buy QCOM for 35% less than what they are today. GIVE ME YOUR MONEY!!

SPWR – I got solar on my bus. So many people have solar on their roofs. I recently added to the 5x short 15$ puts a 10-15-20 PS which is also red, but lets see what happens over the next 2 years.

SQQQ – This is a hedge and an adjusted spread from a 35-45 BCS. So despite that its showing green, its actually 4000$ realized losses from the 35->30$ adjustment, so overall 2300$ red, but its a hedge for if the nasdaq goes down at all over the next couple of months. And if it doesn’t, hopefully the rest of my positions will make up for the remaining 2500$ value of the BCS.

TSLA – Although Elon sold an absurd amount of stock over the last year to fund his newest twitter hobby, they’re coming back nicely. The position is showing 18.4k$ green, but actually I have 12k$ realized losses in 2023 on TSLA and then another 1500$ in 2022, so in reality only up 5k$ but kindof like AMZN, being up 5k$ on a company whose graph looks like this:

is another testament to the power of investing using options vs stock.

V – The company that just never goes down. I can’t seem to initiate a proper position on this company, so just a reminder to keep an eye on them for an opportunity to double down on. Meanwhile, GIVE MY YOUR 800$ !!!

So thats my current portfolio, updated to the end of the first quarter 2023. Performancewise, its showing 23% green for 2023 vs the nasdaqs “16.77%”:

Although the nasdaq actually is up ~21% YTD so honestly not sure why E*Trade puts them at 16.77%, but either way, keeping up with the nasdaq and badly outperforming the s&p for the year. But also handily outperforming both indexes over the whole last year as well:

Down 2.6% vs the nas -13% and the s&p -9%.

If anything was unclear about that portfolio review ask me in the comments, I would be happy to explain.

Other than that, I definitely don’t expect to gain another 20% over the second quarter as that would be completely unsustainable, but in continuation to the initial calculation of 16%/year from here assuming all my positions expire worthless, over the next quarter we should make ~4%. But lets see what the next quarter brings!

NOTE – This is not an april fools post despite the date. I’m too busy for that.

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