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SUMMARY
TJ of 'The Wheel Deal' discusses recent trades, tax-loss harvesting, and the disciplined approach behind the 'Road to $1M' investment series. The episode covers portfolio adjustments, premium collection strategies, and the importance of consistent deposits and research during quiet market periods.
MAIN POINTS
- TJ reviews the current account balances and recent purchase of 500 shares of ASST, explaining the rationale behind the move.
- A successful short put trade on SpaceX is detailed, including the quick profit taken after earnings and the decision to close the position early.
- The CleanSpark position is analyzed, highlighting the assignment of 6,500 shares at $11, ongoing covered call sales, and the impact of premiums on cost basis.
- A deep dive into the fundamentals of CleanSpark, SpaceX, and ASST is presented, focusing on management, financials, and market sentiment for each.
- TJ addresses market manipulation, the importance of acting like an institution, and the pitfalls of retail investor behavior during volatility.
- The strategy of consistent $2,500 monthly deposits is emphasized as a key driver for long-term portfolio growth and flexibility.
- Closing remarks highlight the ongoing search for new opportunities, with Oracle and Vistra noted as current interests, and the significance of strong management in investment decisions.
DETAILED ANALYSIS
The episode opens with TJ providing a status update on the joint investment accounts, clarifying that recent transfers to the joint account are setting the stage for more coordinated trading activity. The current cash balance and positions are reviewed, with a focus on the recent acquisition of 500 shares of ASST at $29.66 per share, now trading slightly lower. TJ notes that an attempt to sell covered calls on ASST was unsuccessful due to lack of fills, underscoring the sometimes illiquid nature of certain tickers.
In the other account, the primary holding is CleanSpark, with 2,000 shares owned and an agreement to purchase 800 more at $11, while simultaneously having shares for sale at $14. The discussion also covers the strategic sale of BMY for a $22,000 loss, executed for tax-loss harvesting purposes. This move prevents any BMY trades for 31 days due to wash sale rules, prompting the use of ASST as a 'bridge' holding to maintain market exposure without violating tax regulations.
A significant portion of the episode is dedicated to the mechanics and rationale behind recent trades. TJ recounts a short put trade on SpaceX, initiated as an earnings play with a 31-day expiration and a $135 strike, collecting $460 in premium. Following a strong earnings report, the put option's value collapsed, allowing TJ to buy it back for $1.41 per share just over an hour after market open, netting $319 in profit—69% of the maximum possible—in less than 24 hours.
This swift exit is framed as a disciplined, mathematical approach to options trading, prioritizing quick wins and the recycling of capital over squeezing out every last dollar from a trade.
The CleanSpark position is analyzed in detail. TJ explains that 6,500 shares were assigned at $11, amounting to a $71,500 investment. Premiums from cash-secured puts and covered calls have reduced the adjusted cost basis to $10.52 per share.
Although the stock is currently trading below the purchase price, the ongoing collection of premium provides positive cash flow, offsetting unrealized losses. TJ emphasizes the importance of not simply holding and hoping for a rebound, but instead actively generating income through options while monitoring the position. The 'quiet time doctrine' is introduced, advocating for diligent research and preparation during periods of low trading activity to ensure readiness for future decisions.
The episode features a structured analysis of key holdings using a multi-factor framework: management, moat, money, market sentiment, movement, and methodology. CleanSpark is lauded for its efficient Bitcoin mining operations and strong leadership under CEO Matt Schultz, though its recent financials reflect sector-wide challenges, including a net loss and significant mark-to-market declines in its Bitcoin treasury. Despite a less robust balance sheet compared to peers like Riot, CleanSpark's strategic pivot toward digital infrastructure is highlighted as a potential catalyst.
SpaceX, while only a put candidate for now, is praised for its leadership under Elon Musk, technological moat in reusable rockets and Starlink, and explosive revenue growth, particularly in its AI segment. ASST, the 'bridge' holding, is characterized by a lean management structure, zero conventional debt, and aggressive Bitcoin accumulation, though its small size and limited track record introduce higher risk and volatility.
TJ also addresses broader market dynamics, warning against succumbing to fear-mongering and manipulation that often leads retail investors to buy high and sell low. He advocates for adopting an institutional mindset, maintaining a long-term perspective, and viewing market dips as opportunities rather than threats. The strategy of consistent monthly deposits—$2,500 per month, totaling $30,000 annually—is underscored as a foundational element of the 'Road to $1M' plan.
These deposits, combined with premium income and share appreciation, are positioned as the primary drivers of portfolio growth, especially in the early years when the account size is modest.
In closing, TJ reiterates the importance of strong management in investment decisions, sometimes even above financial metrics or market sentiment. He signals openness to exploring new opportunities beyond the usual tickers, specifically mentioning Oracle and Vistra as current interests due to their management quality and potential for attractive premiums. The episode concludes with a call for continued research, transparency, and disciplined execution, reinforcing the core tenets of the Wheel Deal approach.