Portfolio Update, Gameplan for the Rest of 2020

Life Update

Hey, team. It has been too long since my last post. I apologize for that. My day job has us going back into the office (where I am right now), which means less time for videos, Patreon, and working together on Discord. Unfortunately, that does not look like my work schedule will change soon. Nevertheless, I remain fully committed to making this community stronger and I will get better at time management to make that happen. 

In this post, I would like to update you all on what my portfolio looks like now, how I plan to continue investing in this hated market rally, and give you all a heads up about what is to come from Patreon and Discord through the end of the year.

I am going to write this relatively quickly since I am at work and don't want to get fired, so forgive me if it is not polished.

My Non-Retirement Account Portfolio in Merrill Edge

There is a lot going on here, so I'll point out some of the more important features and talk about how I plan to continue managing this.

Management Plan and Goal

For management, my current strategy is to sell calls and puts for premium and reinvest them into shares. I will continue to buy shares in one company until I reach my goal (usually 100 shares), then I switch to another company. The companies will mostly be dividend aristocrats unless I really want exposure to another company (like AMD).

Right now, I am working on getting to 100 shares of T (AT&T). Currently, I am at 91 shares, but this will increase to 96 shares once I add on the premium that expired this weekend and use it to buy shares on Monday. 

After I hit 100 shares, I will switch to AMD, then to PRU (Prudential), then to ET (Energy Transfer), then to FOXA (Fox), then to SPHD (S&P dividend ETF).

So far, this method has paid me 96 shares of T, all bought with premium from other positions. This feels very rewarding and motivates me to continue. Buying shares in dividend payers helps build a reliable stream of income, however small, that will keep this portfolio moving.

Current Moves

First, I am always going to be long-term bullish, so I am holding 200 shares of QQQ and 115 shares of AAPL that I do not trade. I just hold them. These have been wonderful performers and I see no reason to let them go. I am also selling covered calls on 200 shares of QQQ and am currently stuck in a roll as the market keeps cruising higher. I will keep rolling these out and up until they expire worthless, at which point I will be walking away with a hefty premium and still hold the 400 total shares (200 of which I will continue to sell covered calls against). Rolling index funds is not as problematic as it is on individual stocks because QQQ is so liquid. Therefore, I am not concerned about these rolls and will keep it going as long as I need to. There are so many opportunities for a PP-touch on QQQ that rolling has almost no negative effects.

Second, I am wheeling 200 shares of SPY. I recently got into this position and have so far made only a couple hundred dollars from doing it. However, SPY has its 3x weekly expirations  so the premiums build relatively quickly. I plan to continue doing this, and have enough cash aside to wheel 1x additional block.

Third, I am holding 3x SPY LEAPs expiring in DEC 2022. These LEAPs have a combined delta of about 2.40, so the position acts as though I am holding about 240 shares of SPY. Obviously, this has been tremendously valuable and my only regret is that I did not buy more. One of the LEAPs is covered by a short call, so it is part of a Poor Man's Covered Call. I am stuck rolling it right now, but SPY is so liquid that it has not been a problem. I will continue covering his one LEAP while I keep the other 2 naked. I am also selling OTM puts on dips, which are still selling for quite a bit on 30-day expirations. You can see the $290csp is up $430 (70%), which will pay for more shares of stock when it all pays out.

Fourth, I am selling cash-covered puts on AMD on every dip, and so far it is free money. I am currently open on 2x positions by selling a cash-covered put at each $45 and $53 strikes. I want exposure to AMD, so I will continue selling puts on dips until I get assigned. If assigned on 2x lots, I will sell covered calls on 1x and keep the other lot in shares.

And finally fifth, I am wheeling 10x NLY lots with a basis around $6.50, but I will continue to sell the $7 strike and use the premium to buy shares. NLY believes its 7% payout is sustainable, so I will buy shares while the company is cheap. I am up to 53 shares paid for with premium, and have a pending dividend delivery worth another 33 shares. I'll continue accumulating shares for the long term. Even if NLY cut its divi in half, that's still a nice 3.5% payer.

I am making some other moves (KO wheel, O shares), still holding cash, but you can ask about those in the comments if you're interested.

My Roth and Traditional IRAs with Merrill Edge

Somewhat less exciting are my retirement accounts. I recently moved my Army 401(k) (called a TSP) into my retirement accounts with Merrill Edge for a combined balance of about $49,000.

In my Roth, I have 214 shares of O (Realty Income) on a DRIP that will continue reinvesting dividends into new shares. I expect O to maintain its dividend and continue increasing it every quarter. Right now, it is only paying out about $45/month, but I will continue buying shares with the dividends and with my yearly deposits. 

I am also buying QQQ shares with deposits, which seem to never go down. QQQ has been outperforming SPY for years.

I am also holding a csp on SDY, another dividend ETF focused specifically on aristocrats. If assigned, I will wheel this one and reinvest the premium into shares. 

Somehow my dumb ass bought 18 shares of F thinking I will flip them for a quick $20, but now I am bagholding. I am not worried about it - dead money.

My Traditional IRA is still $15,000 in cash until I do a conversion and move it into my Roth. I will use it to sell a csp on DIS and reinvest the rest into shares of QQQ.

Discord and Patreon Moves

This section will detail the next steps for Patreon and Discord (especially things available to OGs, Lancers, and the next tier).

Whisper Bot

We have already invested into a whisper bot, which shows the Wall Street consensus on earnings, versus the Whisper Number, versus the actual earnings.

Stocks that beat both tend to do well, whereas stocks that miss both tend to get squashed. There are more complicated patterns when stocks beat one but miss the other. But there is really no reason to mess with those. Stocks that beat both tend to outperform over the next 45 days and so are a good investment. 

The whisper bot was not cheap to establish and maintain, but the Patreon contributions I receive more than compensate me for it.

Algo Alerts

The next bot to be implemented will include algo alerts. These are buy and sell alerts based on algorithms that only professional traders usually get access to, but they are available as subscription services. I intend to implement algo alerts into Discord, but I do not want to describe too many details yet.

Next Tier

There is a lot of demand for OG and Lancer roles. I do not plan to create any more of either. However, I do plan on creating an additional tier once we implement algo alerts. Since implementing the algo alert bot will probably be expensive to maintain (I will need a real programmer to write this bot), I will have to fund it with a new tier identical to OGs and Lancers.

However, this tier will be more expensive. I plan on offering it at a discount to Henchmen who have already made contributions for at least 2 months from the date I open the new tier, just as a means of saying thank-you. This might require that I actually make 2 tiers: one at a discount for former Henchmen, one for new folks.

Patreon

I owe you guys more frequent Patreon posts, especially when some of the Lancers paying $20/month don't even have Discord and so are paying for nothing if I do not make Patreon posts.

I need you help in knowing what direction to take Patreon, so I am making a poll in another post. Tell me what content you want to see, and I'll make sure it reaches you more frequently.

Link to the poll: https://www.patreon.com/posts/38979317 

Thanks for everything you guys do for me. I will pick up the slack for you.