Options and real estate wedlock - a beginner level trade on a real estate backed asset

[cyanide12345678]

I hope this post ages well over time. Do your own due diligence. I'm NOT a financial advisor. Just a dude that likes to play with money.

I've probably received a dozen or so messages from different people regarding options and/or real estate. In the spirit of education, here's a trade that I think is significantly better than any syndication out there. So anyone considering investing in a syndication, should consider this trade as well. I personally hold 725 of the following contracts and expect to get ~ 40k from that.

Ticker: MPW

What is it? Medical real estate REIT that owns about 400+ hospitals/freestanding ERs/rehab facilities.

Current price: $7.5/share

Current Dividend yield: $1.16/yr (expected to drop soon which is a reason why the stock has been hammered). Dividend announcement going to happen soon that may create some wild volatility especially if there's an unexpectedly large drop in dividend.

Why in this world did it drop 70% from it's peak last year:

The Bear case:

1) REITs as a whole have not done well due to increase in interest rates.
2) 2 largest tenants (Steward and prospect) have had large losses during covid leading to deferred rent and MPW helping them as tenants. Prospect for example had rent deferred this year and a part of rent was forgiven in return for equity into their managed care business. Receiving equity instead of cash rent investors didn't like.
3) Covid disrupted hospital financials for operators which are MPW tenants - MPW tenants have incurred huge losses during covid and are now finally recovering as volumes have recovered especially in outpatient money maker procedures.
4) Short attack. Historically high short selling at 20%. Which basically means an extra 120 million shares (20% of all shares which is 600 million) have been sold by people who never owned the stock to begin with causing significantly high selling pressure and price drop.
5) Increasing question about inability to cover dividend payment and anticipation of a cut due to rent deferrals ($0.29 per share per quarter - $1.16/yr aka >15%).

The Bull case:

1) Hospital financials are improving. Volumes are back. Staffing shortages are improving. Travel nurse utilization is improving.
2) VALUE. It's already dropped 70% from peak (You know...buy low sell high. Buy when everyone else is fearful kind of thing). MPW holds 19.2 billion of real estate and real estate related assets and 10.8B of debt. So they have a book value of ~ 8.4B. Currently the stock price puts the market cap at 4.5B. That's basically 53 cents on the dollar of assets. Granted if you look at the balance sheet, out of 19.2B, 2.4B is equity in real estate related firms and NOT directly real estate properties/assets. Then if you assume all those equity investments of MPW go to 0; then it's still an enterprise with a book value of 16.8B. Subtract debt and you have 6B. Current price is trading at 75 cents on the dollar.
3) Hard to predict the future, but we're heading towards terminal/plateau of interest rate hikes based on current fed guidelines (Expected to have 1 more rate hike in September). Next year if the rates back off, the entire REIT industry will benefit.
4) Mission critical Assets. You need hospitals.
5) Experienced sponsor that has been through 2008 as well as multiple tenant bankruptcies in the past and have always been able to squeeze their investment back.

If owning a company that's trading on pennies on the dollar due to massive price drop and holds 400+ hospital building hard assets is interesting to you then here's a safer way to make a play

The trade:

Sell cash covered puts - $6 strike January 2024 expiration. (see attachment)
Premium you receive = 56 dollars per contract based on todays closing prices
Absolute return in 5 months if price stays above $6 = 56/(600-56) = 10.3%
Annualized return = 24%

So...your outcomes:

1) MPW stays above $6 - You made 10.3% in 5 months. Great. 24% Annualized return. Rinse and repeat, sell more contracts for future dates.
2) MPW drops below $6 - Great you can buy MPW for $6/share (8.4B assets for market cap of 3.6B, 43 cents on the dollar), start collecting dividends (If they stay at $1.16/yr then that's a 19% dividend, but I think we're in for a cut), and start selling covered calls. Between covered calls and dividend, probably an easy 20+ percent return until eventually a long term recovery happens for the reit industry and the hospital operators.

Disclaimers:

1) I'm not a financial advisor. Just a regular dude.
2) You'll experience massive volatility as this REIT somehow is becoming a meme stock with such large short percentage.
3) Do your own due diligence.
4) I have sold 725 of the above contracts with naked puts (leveraged) with an average premium of $56.24 per contract that I've received. But instead of requiring the full cash which is $600 ($6 strike x 100 shares) - 56.24 = 543.76 per contract, I only require $250 - premium (56.24) = 193.76; giving me a cash on cash return 56.24/193.76 = 29% in 5 months.
5) This post may not age well at all as I cannot predict the future and this stock could go to $1 or penny stock value.
6) The exact numbers may be off just a tiny amount since I'm going on memory rather than looking up everything as I write this post

For anyone considering physical real estate or real estate syndications into private companies. In my humble opinion, as of today, this may be a better play.

Buy low sell high. Buy when everyone else is fearful. Sometimes to make money you have to hold a falling knife.

Good luck to all.

---

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[HemorrhagicShock]

Thank you so much for posting this! I loved the in-depth write-up, thought process, and being open with your position in terms of strikes, expiry, and contract sizing.

How is the EWZ play going?

 

[cyanide12345678]

Thank you so much for posting this! I loved the in-depth write-up, thought process, and being open with your position in terms of strikes, expiry, and contract sizing.

How is the EWZ play going?

Nerve wracking 🤣

Yesterday just happened to be a ridiculously wild day. WSJ came out with a negative article, if you didn’t hold anything and got in yesterday, you could have sold puts with premium as high as $110-120 for each $6 strike contract. Literally mid day on request of the company trading halted to deliver news. They responded to the article, then stock went up 7-8 percent from the day low.

Wild wild ride.

I made changes to my holdings. When the stock had a very steep drop, that meant gamma and volatility went crazy. Gamma can have huge effects on pricing for contracts, especially short term positions can explode from gamma and volatility.

So i put my big boy pants on and doubled down.

I took the loss on my 155 day $6 strike position. I had 725 contracts here. Almost 100% realized loss ~ 40k (originally received $56 per contract and bought back and closed for $111 per contract i believe).

Replaced the entire holding with 1000 contracts sep 29th $6 strike - 42 days to expiration. Average premium received was $61 per contract. Received $61k premium for this. Got lucky in selling some positions very near the intra-day low. So the swing up gained almost 16k in the next 2-3 hours of doing the trade.

So why did i do the above?

1) ridiculous premiums that had spiked with volatility. It was the perfect time to sell contracts and go big.
2) 61k in 42 days is better than 80k in 155 days (80k was the price i paid to close, 40k of this was money i had received in premium earlier).
3) theta (value of premium per day) is much higher for the 42 day position.
4) while i increase risk with increased position size, i also improve my probability of success since it’s less likely for the stock to hit my strike in a shorter duration of 42 days.
5) i also significantly improve maneuverability with a 42 day position. Can extend duration, drop strike, and even decrease position size.

So if one of you got in yesterday, especially anytime after 11 am, then your position already should have 20% of profit (sort of like my current holding).

What’s my game plan here onwards?

Every 3-4 weeks, i will close my position when it’s 14-21 days to expiration left, and I’ll replace with a new 42 day position while more or less maintaining the $6 strike and the 1000 contracts. The 42 day position will give 15-20k more premium than it will take to close the 14 day position. Rinse and repeat, keep getting that juicy premium. If things really start going against me, I’m open to dropping strike to $5 and extending things out in time and playing the long game

 

[cyanide12345678]

Thank you so much for posting this! I loved the in-depth write-up, thought process, and being open with your position in terms of strikes, expiry, and contract sizing.

How is the EWZ play going?

Lol i just realized you had asked about ewz and not how my mpw play was going.

Ewz has made me 110k this year. It’s my biggest winner.

I hold 150 $27 strike ewz contracts. Had 275 until yesterday when i opened up liquidity, closed arkk, soxl, and half of ewz positions to open up liquidity to go big on mpw.

 

[HemorrhagicShock]

Lol i just realized you had asked about ewz and not how my mpw play was going.

Ewz has made me 110k this year. It’s my biggest winner.

I hold 150 $27 strike ewz contracts. Had 275 until yesterday when i opened up liquidity, closed arkk, soxl, and half of ewz positions to open up liquidity to go big on mpw.

This is a taxable event, right? How are you managing the tax side of things for this trade?

 

[cyanide12345678]

This is a taxable event, right? How are you managing the tax side of things for this trade?

Ill eventually pay taxes. Life moves on. Its a completely liquid taxable account which i can use at anytime for taxes. Me paying a lot of taxes only means that i made a lot of money.

 

[thegenius]

I hope this post ages well over time. Do your own due diligence. I'm NOT a financial advisor. Just a dude that likes to play with money.

I've probably received a dozen or so messages from different people regarding options and/or real estate. In the spirit of education, here's a trade that I think is significantly better than any syndication out there. So anyone considering investing in a syndication, should consider this trade as well. I personally hold 725 of the following contracts and expect to get ~ 40k from that.

Ticker: MPW

What is it? Medical real estate REIT that owns about 400+ hospitals/freestanding ERs/rehab facilities.

Current price: $7.5/share

Current Dividend yield: $1.16/yr (expected to drop soon which is a reason why the stock has been hammered). Dividend announcement going to happen soon that may create some wild volatility especially if there's an unexpectedly large drop in dividend.

Why in this world did it drop 70% from it's peak last year:

The Bear case:

1) REITs as a whole have not done well due to increase in interest rates.
2) 2 largest tenants (Steward and prospect) have had large losses during covid leading to deferred rent and MPW helping them as tenants. Prospect for example had rent deferred this year and a part of rent was forgiven in return for equity into their managed care business. Receiving equity instead of cash rent investors didn't like.
3) Covid disrupted hospital financials for operators which are MPW tenants - MPW tenants have incurred huge losses during covid and are now finally recovering as volumes have recovered especially in outpatient money maker procedures.
4) Short attack. Historically high short selling at 20%. Which basically means an extra 120 million shares (20% of all shares which is 600 million) have been sold by people who never owned the stock to begin with causing significantly high selling pressure and price drop.
5) Increasing question about inability to cover dividend payment and anticipation of a cut due to rent deferrals ($0.29 per share per quarter - $1.16/yr aka >15%).

The Bull case:

1) Hospital financials are improving. Volumes are back. Staffing shortages are improving. Travel nurse utilization is improving.
2) VALUE. It's already dropped 70% from peak (You know...buy low sell high. Buy when everyone else is fearful kind of thing). MPW holds 19.2 billion of real estate and real estate related assets and 10.8B of debt. So they have a book value of ~ 8.4B. Currently the stock price puts the market cap at 4.5B. That's basically 53 cents on the dollar of assets. Granted if you look at the balance sheet, out of 19.2B, 2.4B is equity in real estate related firms and NOT directly real estate properties/assets. Then if you assume all those equity investments of MPW go to 0; then it's still an enterprise with a book value of 16.8B. Subtract debt and you have 6B. Current price is trading at 75 cents on the dollar.
3) Hard to predict the future, but we're heading towards terminal/plateau of interest rate hikes based on current fed guidelines (Expected to have 1 more rate hike in September). Next year if the rates back off, the entire REIT industry will benefit.
4) Mission critical Assets. You need hospitals.
5) Experienced sponsor that has been through 2008 as well as multiple tenant bankruptcies in the past and have always been able to squeeze their investment back.

If owning a company that's trading on pennies on the dollar due to massive price drop and holds 400+ hospital building hard assets is interesting to you then here's a safer way to make a play

The trade:

Sell cash covered puts - $6 strike January 2024 expiration. (see attachment)
Premium you receive = 56 dollars per contract based on todays closing prices
Absolute return in 5 months if price stays above $6 = 56/(600-56) = 10.3%
Annualized return = 24%

So...your outcomes:

1) MPW stays above $6 - You made 10.3% in 5 months. Great. 24% Annualized return. Rinse and repeat, sell more contracts for future dates.
2) MPW drops below $6 - Great you can buy MPW for $6/share (8.4B assets for market cap of 3.6B, 43 cents on the dollar), start collecting dividends (If they stay at $1.16/yr then that's a 19% dividend, but I think we're in for a cut), and start selling covered calls. Between covered calls and dividend, probably an easy 20+ percent return until eventually a long term recovery happens for the reit industry and the hospital operators.

Disclaimers:

1) I'm not a financial advisor. Just a regular dude.
2) You'll experience massive volatility as this REIT somehow is becoming a meme stock with such large short percentage.
3) Do your own due diligence.
4) I have sold 725 of the above contracts with naked puts (leveraged) with an average premium of $56.24 per contract that I've received. But instead of requiring the full cash which is $600 ($6 strike x 100 shares) - 56.24 = 543.76 per contract, I only require $250 - premium (56.24) = 193.76; giving me a cash on cash return 56.24/193.76 = 29% in 5 months.
5) This post may not age well at all as I cannot predict the future and this stock could go to $1 or penny stock value.
6) The exact numbers may be off just a tiny amount since I'm going on memory rather than looking up everything as I write this post

For anyone considering physical real estate or real estate syndications into private companies. In my humble opinion, as of today, this may be a better play.

Buy low sell high. Buy when everyone else is fearful. Sometimes to make money you have to hold a falling knife.

Good luck to all.

That sure is an ugly chart. The 1-2 yr chart...just a steady drop.

I would probably rather write the Sept 6.0 Put than the Jan 24 6.0 put. Within the current channel it's falling...it's likely headed to 5 by Jan. It's highly risky and generally not advisable to write puts on falling stocks. The Sept put has IV 115% while the Jan has 85% and gotta wait a few months for theta to really kick in for the Jan 2024 one.

I suppose it's also getting hammered due to the ongoing challenges with CRE and repricing of real estate debt at much higher rates given how much interest rates are going up.

They have been able to maintain that dividend over the past 5 years...it's going up. Is the risk real that they might have to cut it? I don't know much of anything about MPW.

You should also remind people or let them know that you are selling options on margin. Unless that is you plan on spending $435,000 to acquire 72,500 shares.

 

[thegenius]

Nerve wracking 🤣

Yesterday just happened to be a ridiculously wild day. WSJ came out with a negative article, if you didn’t hold anything and got in yesterday, you could have sold puts with premium as high as $110-120 for each $6 strike contract. Literally mid day on request of the company trading halted to deliver news. They responded to the article, then stock went up 7-8 percent from the day low.

Wild wild ride.

I made changes to my holdings. When the stock had a very steep drop, that meant gamma and volatility went crazy. Gamma can have huge effects on pricing for contracts, especially short term positions can explode from gamma and volatility.

So i put my big boy pants on and doubled down.

I took the loss on my 155 day $6 strike position. I had 725 contracts here. Almost 100% realized loss ~ 40k (originally received $56 per contract and bought back and closed for $111 per contract i believe).

Replaced the entire holding with 1000 contracts sep 29th $6 strike - 42 days to expiration. Average premium received was $61 per contract. Received $61k premium for this. Got lucky in selling some positions very near the intra-day low. So the swing up gained almost 16k in the next 2-3 hours of doing the trade.

So why did i do the above?

1) ridiculous premiums that had spiked with volatility. It was the perfect time to sell contracts and go big.
2) 61k in 42 days is better than 80k in 155 days (80k was the price i paid to close, 40k of this was money i had received in premium earlier).
3) theta (value of premium per day) is much higher for the 42 day position.
4) while i increase risk with increased position size, i also improve my probability of success since it’s less likely for the stock to hit my strike in a shorter duration of 42 days.
5) i also significantly improve maneuverability with a 42 day position. Can extend duration, drop strike, and even decrease position size.

So if one of you got in yesterday, especially anytime after 11 am, then your position already should have 20% of profit (sort of like my current holding).

What’s my game plan here onwards?

Every 3-4 weeks, i will close my position when it’s 14-21 days to expiration left, and I’ll replace with a new 42 day position while more or less maintaining the $6 strike and the 1000 contracts. The 42 day position will give 15-20k more premium than it will take to close the 14 day position. Rinse and repeat, keep getting that juicy premium. If things really start going against me, I’m open to dropping strike to $5 and extending things out in time and playing the long game

Diagonal Put Spread | OptionStrat Options Profit Calculator

Calculate potential profit, max loss, chance of profit, and more for diagonal put spread options and over 50 more strategies.

optionstrat.com

 

[cyanide12345678]

That sure is an ugly chart. The 1-2 yr chart...just a steady drop.

I would probably rather write the Sept 6.0 Put than the Jan 24 6.0 put. Within the current channel it's falling...it's likely headed to 5 by Jan. It's highly risky and generally not advisable to write puts on falling stocks. The Sept put has IV 115% while the Jan has 85% and gotta wait a few months for theta to really kick in for the Jan 2024 one.

I suppose it's also getting hammered due to the ongoing challenges with CRE and repricing of real estate debt at much higher rates given how much interest rates are going up.

They have been able to maintain that dividend over the past 5 years...it's going up. Is the risk real that they might have to cut it? I don't know much of anything about MPW.

You should also remind people or let them know that you are selling options on margin. Unless that is you plan on spending $435,000 to acquire 72,500 shares.

Yeah i rolled up and went to $6 sep 29th on Friday already. It was a better choice.

No plan of acquiring any shares at any point. There’s a bottom somewhere. I don’t think it’s going to 0 based on fundamentals.

Yes, there’s a real risk they have to cut dividend. Their adjusted funds from operations when you take out all non cash items for q3-q4 is around 0.28 and the dividend sits at 0.29. Rents go up next year due to inflation based rental increase clauses in their leases, but it’s best for the company to decrease debt, improve fundamentals, even if it means a short term hit to share price.

I think my initial post was more for a completely new person who has never traded an option. For them, a cash covered put at $6 followed by receiving dividend and doing cash covered calls, might be a way to get their feet wet. It like a good risk adjusted return. But yes, i obviously trade ridiculously actively and my portfolio probably changes every 3-4 days so yeah what was previously a January position is already now a September position.

 

[cyanide12345678]

Diagonal Put Spread | OptionStrat Options Profit Calculator

Calculate potential profit, max loss, chance of profit, and more for diagonal put spread options and over 50 more strategies.

optionstrat.com

I don’t do put spreads, one of my biggest losses was on a spread. they theoretically limit risk sure. But they also make it very difficult to maneuver things around.

Conceptually the fundamentals of the company itself should limit risk especially when price is already trading at 50 percent off book value.

 

[thegenius]

Conceptually the fundamentals of the company itself should limit risk especially when price is already trading at 50 percent off book value.

Yea it's tough. I've read like 4,230 times that the next big shoe to fall is commercial real estate due to rising interest rates and the need to refinance those loans. That may not necessarily coincide with MPW because health care, I would think, is more stable than discretionary consumer spending for instance. Blackrock for months, if not ongoing, has limited investor withdraws on it's huge non-traded REIT. Anyway I know you know all of this. I'm even kind of tempted to write Sept 6.0 puts against MPW. But I probably won't.

 

[thegenius]

I don’t do put spreads, one of my biggest losses was on a spread. they theoretically limit risk sure. But they also make it very difficult to maneuver things around.

Conceptually the fundamentals of the company itself should limit risk especially when price is already trading at 50 percent off book value.

When do they announce their next div distribution?

 

[thegenius]

I don’t do put spreads, one of my biggest losses was on a spread. they theoretically limit risk sure. But they also make it very difficult to maneuver things around.

They are tougher to manage. The link above was a diagonal though and can roll the short one down into a calendar or even a vertical. But yes I know what you mean. What I liked about that one is you are opening a time spread for a credit which is unusual and is testament to the near term volatility. I remember earlier this year I was writing puts on FRC at like $5 strike...and I'm glad I got out of that quickly for a few grand.

 

[cyanide12345678]

Yea it's tough. I've read like 4,230 times that the next big shoe to fall is commercial real estate due to rising interest rates and the need to refinance those loans. That may not necessarily coincide with MPW because health care, I would think, is more stable than discretionary consumer spending for instance. Blackrock for months, if not ongoing, has limited investor withdraws on it's huge non-traded REIT. Anyway I know you know all of this. I'm even kind of tempted to write Sept 6.0 puts against MPW. But I probably won't.

They should have all 2023 and 2024 debt due paid off once their Australian asset sale finalizes. It’s already a done deal with half then portfolio already sold. Almost all debt is fixed except a revolving credit line with maturities literally going ask the way up to 2031. Their next biggest debt is 2025. If one believes the fed projections, rates should be lower in 2025.

 

[cyanide12345678]

Yea it's tough. I've read like 4,230 times that the next big shoe to fall is commercial real estate due to rising interest rates and the need to refinance those loans. That may not necessarily coincide with MPW because health care, I would think, is more stable than discretionary consumer spending for instance. Blackrock for months, if not ongoing, has limited investor withdraws on it's huge non-traded REIT. Anyway I know you know all of this. I'm even kind of tempted to write Sept 6.0 puts against MPW. But I probably won't.

Commercial real estate is a general term.

Office is struggling. 20 percent vacancy in most places, some places even worse.

Multi family is showing some small weakness, but nothing drastic

Industrial is growing like crazy and booming

Self storage is doing okay with good vacancy numbers

Hotels are hitting it out of the park.

Hospitals are starting to do better. Really struggled during covid when volume dropped. Mpw has a 99% occupancy right now.

 

[cyanide12345678]

Office consists of 5 percent of real estate and public reits.

That’s your true distressed commercial space. Literally selling for 50 plus percent discounts.

My second last syndication maybe 3 months ago was the la selle plaza in Minneapolis. 30 floor concrete high rise. Downtown. Next to the stadium. Purchased for some 155 million some 6-7 years ago, had ~ 100 million of debt. Owner couldn’t pay mortgage. Bank instead of foreclosure, sold the debt for $48 million to hempel. Hempel with its syndication investors bought the debt, became the bank and in the same transaction took over the property without going through the foreclosure process as a deal with the previous owner.

Booom - a property that sold for 155 million in 2015 was acquired for 48 million. Cash flows like crazy. $77/sq ft cost price for a concrete skyscraper……. Think about that for a minute. My house cost 109/sqft to build and it’s definitely not a skyscraper made from steel and concrete lol.

It’s a blood bath in the office space as you can see.

 

[cyanide12345678]

Ignore the headlines.

Buy low sell high. Investing is taking on risk. But a 50 percent discount to book value isn’t a bad purchase point especially if you can sell covered calls and keep collecting dividend as you wait for recovery.

 

[cyanide12345678]

When do they announce their next div distribution?

I think it’s soon. Maybe even this week.

I’m hoping for a cut. Let it drop short term. It’s for the best long term.

 

[cyanide12345678]

Yeah i rolled up and went to $6 sep 29th on Friday already. It was a better choice.

No plan of acquiring any shares at any point. There’s a bottom somewhere. I don’t think it’s going to 0 based on fundamentals.

Yes, there’s a real risk they have to cut dividend. Their adjusted funds from operations when you take out all non cash items for q3-q4 is around 0.28 and the dividend sits at 0.29. Rents go up next year due to inflation based rental increase clauses in their leases, but it’s best for the company to decrease debt, improve fundamentals, even if it means a short term hit to share price.

I think my initial post was more for a completely new person who has never traded an option. For them, a cash covered put at $6 followed by receiving dividend and doing cash covered calls, might be a way to get their feet wet. It like a good risk adjusted return. But yes, i obviously trade ridiculously actively and my portfolio probably changes every 3-4 days so yeah what was previously a January position is already now a September position.

The above trade where i shortened my duration to Sep 29th instead of January with $6 strike, i also doubled down and sold 1000 contracts to really go big. That trade has officially made me 31k in 4 trading days, about 6 days if you include weekends.

Contemplating an exit and taking profits.

Proof is attached. Hopefully someone else benefited as well. Cheers.

 

[HemorrhagicShock]

Extremely impressive, and yet I still find this stuff incredibly different despite having actively tried to trade options myself with a play account.

I truly think you have some baseline/innate talent for this and it's not accessible to all comers. Either way keep posting these things, I really appreciate as I gradually learn a little more each time.

 

[cyanide12345678]

Extremely impressive, and yet I still find this stuff incredibly different despite having actively tried to trade options myself with a play account.

I truly think you have some baseline/innate talent for this and it's not accessible to all comers. Either way keep posting these things, I really appreciate as I gradually learn a little more each time.

Well….i just feel comfortable with concentrated bets. I usually have a thesis, I’ve read a lot of financial reports, looked through earnings and balance sheets and based on that i usually identify an opportunity that is undervalued, then i just sell puts on it. I could straight up buy the underlying, will probably make more if i did, but selling out of money puts just gives an additional downside protection, albeit at the cost of extra gains.

This would be the 5th falling knife in catching - the trend is the same - hold hold hold increase position, open a larger and larger position as underlying keeps dropping, and eventually there are significant gains.

Ewz ive held from $30 all the way down to $26 within a few weeks. Eventually it is my biggest money maker

Meta i held all the way from $125 to 80 when i literally went all in because a P/E ratio of 8.5 for a growth company was ridiculously low…it didn’t hurt that they made 30b in cash every year as well. Literally made a all in bet on meta that eventually made decent money.

Pins i did the same. Lived through a 25 percent single day drop which is when i doubled down because the thesis of it being undervalued was there.

Kre my largest position was when banking was in an absolute crisis

And now mpw.

I have my eyes on PYPL as well right now. But going to keep milking mpw until it goes above $8. The January position for $5 strike is literally $41 per $459 = 9.3 percent return in 5 months - so still a 20 plus percent annualized return with such ridiculously amazing valuation if you end up buying at that price of $5.

It’s a win win trade in every situation.

 

[HemorrhagicShock]

If you don't mind sharing, what exactly were your positions with META, KRE, and PINS? When did you open and close them? You don't have to share the position size if you don't want to because I know you're taking big swings.

Also, how did you identify the MPW, KRE, and EWZ trades? Were you just browsing through screener after screener of emerging market charts until you saw a technical setup you liked? Did you read some news articles about the state of those various countries and then decided to look into subsequent markets and balance sheets?

I guess what I'm getting is how are you formulating your trade theses from the ground up? Also do you tend to stick with the same set-up (selling puts) and simply find different markets in which to apply that options strat?

 

[cyanide12345678]

If you don't mind sharing, what exactly were your positions with META, KRE, and PINS? When did you open and close them? You don't have to share the position size if you don't want to because I know you're taking big swings.

Also, how did you identify the MPW, KRE, and EWZ trades? Were you just browsing through screener after screener of emerging market charts until you saw a technical setup you liked? Did you read some news articles about the state of those various countries and then decided to look into subsequent markets and balance sheets?

I guess what I'm getting is how are you formulating your trade theses from the ground up? Also do you tend to stick with the same set-up (selling puts) and simply find different markets in which to apply that options strat?

It's not one trade. It's a series of trades. You cannot look at options as a single trade that you either win or lose. Read the following to understand the core strategy (chapter 6 is literally where all hte money is - managing, adjusting, and repairing naked puts).

Selling Puts: The Complete Guide for Finding and Managing Great Put Selling Trades (No Opt In Required)

But in essence, when I catch a falling knife, I'm aware that there's potential for continued decline, but I'm also aware that there's a bottom SOMEWHERE because there's inherent value in the business. Meta has 2 billion active users, 30B in cash flow a year, owns a lot of intellectual property and pretty much has a monopoly over the largest social media - It had inherent value.

MPW has inherent value - owns 440 hospitals and the real estate has a value. Everything can be a good investment if the cost basis is right.

All my KRE, EWZ trades from this year are attached. And all my Meta and pintrest trades from last year are attached.

I don't know how I identify these things. When something has dropped A LOT and I hear about it or read about it, I start looking into it. I don't look at booming stocks that are at all time highs (can get destroyed as a put seller if something that's at an all time high gets demolished). But something that's already dropped 50%, likely has a floor of how much more it's going to keep dropping.

 

[cyanide12345678]

If you don't mind sharing, what exactly were your positions with META, KRE, and PINS? When did you open and close them? You don't have to share the position size if you don't want to because I know you're taking big swings.

Also, how did you identify the MPW, KRE, and EWZ trades? Were you just browsing through screener after screener of emerging market charts until you saw a technical setup you liked? Did you read some news articles about the state of those various countries and then decided to look into subsequent markets and balance sheets?

I guess what I'm getting is how are you formulating your trade theses from the ground up? Also do you tend to stick with the same set-up (selling puts) and simply find different markets in which to apply that options strat?

I've also ONLY posted about my strongest convictions. I would hate to have someone lose money because of me.

When EWZ was trading at 26-27 dollars, ridiculously undervalued, P/E ratio of 5 ish, Dividend of 11%, that's when I felt comfortably publicly posting about it because I had VERY VERY VERY high degree of confidence in it being a winner. Got the usual hate from the options haters about "oooo you're being so risky". And then 1 year later...the results are for anyone to see. And I 100% shared screenshots of my positions and people could have made some real money.

I only posted about MPW when it got REALLY REALLY low and became suchhhhh an asymmetric bet where the downside risk was much less than the upside risk that I felt people could easily make money on it if they have patience and ability to stomach volatility. 6 days later...I've shown the result.

I don't post about every ticker that I trade. I usually have small positions quite a lot. But there are a few instances where I've gone all in. And those are times my conviction is very hard, the cost basis is incredible, prices are at all time lows etc.

Read this as well:

Selling Puts: The Good, The Bad And The Ugly

What accounts for put-write strategies' under-performance. How to fix put-write underperformance.

seekingalpha.com

Between the above website and this website, you can understand my strategy - Sell puts on beaten down valuable etfs/companies with solid fundamentals and cash flow. Lower strikes over time as the knife continues to fall. Go bigger as the price becomes more and more awesome, and be willing to "hold the strike" at a very low price point as a "worst case scenario" - which is a pretty amazing concept as well that you'll see in the seeking alpha article. The strike where I'm willing to "hold the strike" is always going to be a very very very low price point.

 

[cyanide12345678]

I guess what I'm getting is how are you formulating your trade theses from the ground up? Also do you tend to stick with the same set-up (selling puts) and simply find different markets in which to apply that options strat?

I just follow the market. Every now and then a particular stock makes a massive drop. PYPL for example did like a ridiculous drop after earnings. Why? It was irrational - margins were just barely below expectations and the number of user growth was low, EPS and revenue numbers were great. Growth was still there, revenue was still there and revenue was still growing. Don't quote me, but I think they dropped like 20 percent in one day. Instantly they were on my radar after that. I then reviewed their financials, read some articles on seeking alpha, did more digging...and basically started selling tiny positions here and there on negative days for it. Don't have any large position yet. But it has potential. It just doesn't throw out ridiculous premiums like MPW does right now.

Though honestly I don't have any specific formula - I have a watch list of 20 items. A lot of times I'm cashing out my winners, and whatever ETF out of my watch list (FXI, KBE, KRE, EWZ, QQQ, IWZ, RUT, JETS, SOXL, XOM, XLE, INDA, EWW) is having the worst day, is the one I decide to sell my puts on that day as starter positions. But the premium I receive for the new position has to be better than the old position for the same buying power, only then it's worth the trade.

I don't know if I'm able to explain it, I honestly don't have a formula, a lot of it is me going by "feel".

 

[JacobMcCandles]

It’s a win win trade in every situation.

Nothing safer, right?

 

[cyanide12345678]

Nothing safer, right?

Asymmetric bet.

Sure put your money in treasuries and get 5 percent return.

But betting a company with book value of 8.4 billion (19.2 billion of portfolio minus 10.8 liabilities) currently trading at 4.2 billion market cap, so something that’s already trading at half the book value, betting that you will buy it for $5 (todays closing price was $7), essentially another 28 percent discount to todays already great price, is a 9 percent cash on cash return in 5 months.

Asymmetric bet.

If that happens where it’s under 5, you collect $0.6 dividend annually plus sell cash covered calls for another 10+ percent until stock closes above 5. It’s a very low risk way of getting 20+ percent return whether or not you get assigned the stock or not. Either way is a win, if it drops below $5, the win will just take longer.

Asymmetric bet. Company is cash flow positive, has solid holdings worth real value, not subjective intellectual properties - they have again and again showed that their portfolio has value by selling properties recently within the last few months - Australian portfolio was sold at a cap rate of 5.7.

Their stock is being traded as if the properties have a 10+ cap rate. They dont.

 

[JacobMcCandles]

Asymmetric bet.

Sure put your money in treasuries and get 5 percent return.

But betting a company with book value of 8.4 billion (19.2 billion of portfolio minus 10.8 liabilities) currently trading at 4.2 billion market cap, so something that’s already trading at half the book value, betting that you will buy it for $5 (todays closing price was $7), essentially another 28 percent discount to todays already great price, is a 9 percent cash on cash return in 5 months.

Asymmetric bet.

If that happens where it’s under 5, you collect $0.6 dividend annually plus sell cash covered calls for another 10+ percent until stock closes above 5. It’s a very low risk way of getting 20+ percent return whether or not you get assigned the stock or not. Either way is a win, if it drops below $5, the win will just take longer.

Asymmetric bet. Company is cash flow positive, has solid holdings worth real value, not subjective intellectual properties - they have again and again showed that their portfolio has value by selling properties recently within the last few months - Australian portfolio was sold at a cap rate of 5.7.

Their stock is being traded as if the properties have a 10+ cap rate. They dont.

Ah yes, the low-risk way of getting 20%+ returns that none of the savants on Wall Street have figured out.

 

[HemorrhagicShock]

Ah yes, the low-risk way of getting 20%+ returns that none of the savants on Wall Street have figured out.

This is the general advice/adage that you hear often, but when you look into it a little more than surface level/level 1/level 2, you'll realize this isn't always how it works.

The savants on Wall Street represent big money, big whales, institutions, and massive position sizes. The kinds of positions and strategies that, if not enacted carefully or subtly, can move markets impressively. The kind of liquidity and volume needed to realize any gains or losses on these positions is absurd compared to the kind of size retail investors are using.

As such there are actually TONS of market inefficiencies that exist that can be identified and used to derive capital for a retail investor that are simply not interesting or viable for that kind of Wall Street savants (representing institutions and whales).

This is the beauty of the US stock market.

Don't get me wrong, however. I'm not saying that this is easy, or even recommended to sophisticated retail investors. But as you can see Cyanide has thoughtfully put together a home run thesis, and is using derivates to cleverly manage his risk.

Cyanide my man, please never stop posting this stuff as I learn so much from it. Thank you immensely, friend!

 

[JacobMcCandles]

This is the general advice/adage that you hear often, but when you look into it a little more than surface level/level 1/level 2, you'll realize this isn't always how it works.

The savants on Wall Street represent big money, big whales, institutions, and massive position sizes. The kinds of positions and strategies that, if not enacted carefully or subtly, can move markets impressively. The kind of liquidity and volume needed to realize any gains or losses on these positions is absurd compared to the kind of size retail investors are using.

As such there are actually TONS of market inefficiencies that exist that can be identified and used to derive capital for a retail investor that are simply not interesting or viable for that kind of Wall Street savants (representing institutions and whales).

This is the beauty of the US stock market.

Don't get me wrong, however. I'm not saying that this is easy, or even recommended to sophisticated retail investors. But as you can see Cyanide has thoughtfully put together a home run thesis, and is using derivates to cleverly manage his risk.

Cyanide my man, please never stop posting this stuff as I learn so much from it. Thank you immensely, friend!

Just because someone represents big money doesn’t mean they couldn’t do it with their own money which would be much smaller in size than the institutional money you describe.

 

[cyanide12345678]

Ah yes, the low-risk way of getting 20%+ returns that none of the savants on Wall Street have figured out.

Guess I’ll report back in a few years on mpw. Time will be my witness. That’s all i can say.

Now that they’ve reduced their dividend and opened 300M extra per year to reduce debt (aka increase equity and improve their balance sheet), time will serve them well, as it always does with real estate.

Your savants on wallstreet actually are extremely short sighted. Stock prices are irrational in the short term, respond dramatically to news items, over corrections happen all the time, but long term fundamentals matter and therefore stock prices are more predictable.

Let’s take mpw as an example - it was at a high of $24 last year. Yesterday it was $7. This REIT has dropped 70 percent from its high. Do you think the underlying real estate has lost 70 percent of its value? Has it? No. What has traded at roughly 110 percent of book value for over 20 years is now trading at 50 percent of book value today.

Sure the company has issues, considerably debt expected to refinance at a higher rate, 2 large tenants facing financial issues, but when wallstreet becomes too negative, they value things like management are idiots. Well people who actually built a 19 billion dollar real estate portfolio turns out aren’t exactly the idiots that wallstreet is expecting them to be. They’ve gotten a piece of prospect’s managed care business in return for their deferred rent. They helped steward get all their debt refinanced for the next 4 years to improve their solvency. They sold parts of their portfolio to decrease debt and pay off all debt obligations for 2023 and 2024. They’ve dropped dividend to further be able to drop debt by 300M every year.

Show me physical medical real estate at a 70 percent discount compared to 2022 prices. Well….. this is exactly that. At this valuation, they are even starting to become attractive acquisition targets.

And yet even though I’m bullish, i still sell puts that are far out of the money to further provide downside protection.

But yeah your savants of wallstreet are literally momentum traders in the short term and forget fundamentals - take meta. It was $80, p/e of 8. Was that rational? Again it was assumed that management is an idiot, expenses will remain high, and management will be twiddling their thumbs and doing nothing and they will continue to burn money. I don’t know….i don’t think zuckerburg is an idiot. Boom. Layoffs, expense control, improving earnings, and stock goes up more than 200 percent in 8-9 months. Is that price movement rational? No. Your wallstreet savants had it wrong when they had over corrected so much as to undervalue what was otherwise a great business.

So yeah….i think you’re confusing short term momentum and chart based trading with actual fundamentals. Wallstreet savants routinely over correct and present excellent values for solid businesses.

 

[skougess]

As much as I fundamentally disagree with cyanide’s viewpoint on possible returns and risk, we kinda beat it death in another thread.

It’s cool that he’s posting his strategies, I think we should keep this thread focused on that.

 

[cyanide12345678]

Just because someone represents big money doesn’t mean they couldn’t do it with their own money which would be much smaller in size than the institutional money you describe.

Please educate me about what is SO SO SO SO risky about the attached play. That’s not the play I’m doing, I’m doing riskier trades. But this is a very very low risk way of getting 9 percent in 5 months with 0 leverage (21.9 percent annualized return). What’s risky about it? Educate me.

If by risk you mean buy medical real estate with a book value of $8.4B for a value of $2.7B (cost basis of $4.59 per share which is $500 strike minus premium of $41 per contract) as your worst case scenario and then keep getting $0.6 per share per year (0.6/4.59 = 13 percent dividend based on your cost basis) as you hold for eventual recovery. And since you like cash flow you sell covered calls for a little extra juice…. And just for you, I’ve attached what a at the money covered call can generate in 5 months $99/700 = 14 percent return in 5 months (33.9 percent annualized). This is based on todays prices and a cost basis of $7 per share. Now add $60/700 = 8.5 percent return by dividend based on todays $7 price. Yup…40 percent annualized return. (And this collecting dividends and selling covered calls strategy is your worst case scenario if you end up acquiring shares for a cost basis of $4.59 if you were to sell $5 strike January cash secured puts which is a 9 percent return in 5 months. I’ll say it again…win win situation. Asymmetric bet. Risk is much lower than return now that we’ve dropped 70 percent already). Hence i have 1000 contracts.

So yeah…. Where’s the huge huge huge risk? I mean i love buying cheap things.

Do you know the last time mpw traded at a price/forward affo of 5 was? Yeah 2008.

 

[cyanide12345678]

Please educate me about what is SO SO SO SO risky about the attached play. That’s not the play I’m doing, I’m doing riskier trades. But this is a very very low risk way of getting 9 percent in 5 months with 0 leverage (21.9 percent annualized return). What’s risky about it? Educate me.

If by risk you mean buy medical real estate with a book value of $8.4B for a value of $2.7B (cost basis of $4.59 per share which is $500 strike minus premium of $41 per contract) as your worst case scenario and then keep getting $0.6 per share per year (0.6/4.59 = 13 percent dividend based on your cost basis) as you hold for eventual recovery. And since you like cash flow you sell covered calls for a little extra juice…. And just for you, I’ve attached what a at the money covered call can generate in 5 months $99/700 = 14 percent return in 5 months (33.9 percent annualized). This is based on todays prices and a cost basis of $7 per share. Now add $60/700 = 8.5 percent return by dividend based on todays $7 price. Yup…40 percent annualized return. (And this collecting dividends and selling covered calls strategy is your worst case scenario if you end up acquiring shares for a cost basis of $4.59 if you were to sell $5 strike January cash secured puts which is a 9 percent return in 5 months. I’ll say it again…win win situation. Asymmetric bet. Risk is much lower than return now that we’ve dropped 70 percent already). Hence i have 1000 contracts.

So yeah…. Where’s the huge huge huge risk? I mean i love buying cheap things.

Do you know the last time mpw traded at a price/forward affo of 5 was? Yeah 2008.

Selling covered puts. Getting assigned, then collecting dividend and selling covered calls until underlying ends above strike and your shares are assigned, and then selling covered puts again. This is options 101. Called the wheel.

So with such juicy premiums and juicy dividends - where’s the huge risk? Patience and time will be very rewarding.

Here’s a basic explanation of the above.

 

[sevo00]

awesome post. i may not put some money into this play but i will be watching from sidelines for sure

 

[cyanide12345678]

awesome post. i may not put some money into this play but i will be watching from sidelines for sure

Rising up pretty dramatically now that things have Settled since dividend reduction has happened (resulting in long term value, debt reduction, and equity build up).

Was at 6.39 Friday. Opportunity was knocking 🤣

 

[cyanide12345678]

awesome post. i may not put some money into this play but i will be watching from sidelines for sure

$5 puts are losing value. Was $41 yesterday.

Might be worth waiting on a very negative day so premium goes up.

But if it keeps climbing…. Then return gets smaller and smaller. I can’t predict the future.

 

[Mount Asclepius]

A failure to appreciate stock market risk somewhat equates to a NP not knowing what they don't know. You can feel like you know all there is to know, but market volatility and unpredictability can hang you out to dry. You don't know what you don't know in the form of what will come. Past returns don't guarantee future success. If you are comfortable with the risk of losing massively, then sure shoot for larger returns. It's not as much of a guarantee as you seem to think. Slow and steady my friend. You seem to value things other than money, which is laudable. Don't risk shooting for the stars and in the process miss the beautiful trees on the ground around you.

 

[Groove]

Daily:

Price is below SMA 50 and 200 (along with SMA 50 below 200) and you have full on bearish ichimoku criteria with a bearish kumo twist. Price ping ponged off the SMA 200.

Weekly:

You've got a death cross on the weekly (SMA 50 crossing 200). Look at how the volume picks up after that death cross. It was like a flare gun to the market calling on longs to dump their money. Shorts rushed in.

I can think of a lot of option strategies but why sell puts out of curiosity on this particular stock? If the chart looked similar and price came back and touched kijun-sen I'd be very tempted to short it with a stop loss just slightly above SMA 50. I'm not an options trader but wouldn't it make much more sense to sell calls given the chart?

 

[Groove]

21% short interest. Yuck.

 

[thegenius]

A failure to appreciate stock market risk somewhat equates to a NP not knowing what they don't know. You can feel like you know all there is to know, but market volatility and unpredictability can hang you out to dry. You don't know what you don't know in the form of what will come. Past returns don't guarantee future success. If you are comfortable with the risk of losing massively, then sure shoot for larger returns. It's not as much of a guarantee as you seem to think. Slow and steady my friend. You seem to value things other than money, which is laudable. Don't risk shooting for the stars and in the process miss the beautiful trees on the ground around you.

Do you think OP doesn't know the risks? It might be a bad trade for you, it might be "too risky" for some but what makes you think OP doesn't know the risks?

Or are you just writing standard sound bytes on the dangers of option trading.

Responses such as this generally tell me more about the lack of knowledge about the poster than who it's aimed at. Because you are uninformed, it is suggested from the post that others there are uninformed and taking on too much risk. OP very well might know all aspects about his position.

 

[cyanide12345678]

Daily:
View attachment 376092

Price is below SMA 50 and 200 (along with SMA 50 below 200) and you have full on bearish ichimoku criteria with a bearish kumo twist. Price ping ponged off the SMA 200.

Weekly:

View attachment 376093

You've got a death cross on the weekly (SMA 50 crossing 200). Look at how the volume picks up after that death cross. It was like a flare gun to the market calling on longs to dump their money. Shorts rushed in.

I can think of a lot of option strategies but why sell puts out of curiosity on this particular stock? If the chart looked similar and price came back and touched kijun-sen I'd be very tempted to short it with a stop loss just slightly above SMA 50. I'm not an options trader but wouldn't it make much more sense to sell calls given the chart?

Great short term chart analysis. What about long term fundamentals?

Remember, chart looks the worst at the bottom.

Charts also happen to look great at the top.

If someone sold a $5 strike put then there’s significant downside protection. Even if downside momentum continues, price is undervalued from a pure fundamentals perspective.

Again, worst case scenario is acquiring a company that holds a crap tonne of real estate at an incredible price point. It may not be the lowest point, but holding something while it recovers and collecting a dividend and premium for cash covered puts is itself a good worst case.

From a fundamentals perspective, company isn’t going bankrupt, has a dscr of 3x, has pretty much taken care of all debt coming due until 2025, so no refinancing at higher rates for now. It’s ironic how office reits have a higher valuation than this thing.

Fundamentals. I keep talking about fundamentals here. But i agree with you, chart looks terrible, and this is where the brave/smart/value seekers come in to get incredible value.

 

[cyanide12345678]

A failure to appreciate stock market risk somewhat equates to a NP not knowing what they don't know. You can feel like you know all there is to know, but market volatility and unpredictability can hang you out to dry. You don't know what you don't know in the form of what will come. Past returns don't guarantee future success. If you are comfortable with the risk of losing massively, then sure shoot for larger returns. It's not as much of a guarantee as you seem to think. Slow and steady my friend. You seem to value things other than money, which is laudable. Don't risk shooting for the stars and in the process miss the beautiful trees on the ground around you.

All generic things said.

I’m giving concrete numbers and you’re giving words.

Tell me why selling a $5 or $6 put is so incredibly dangerous based on fundamentals. Why do you think buying real estate at half off is a bad idea?

Single stock risk? I guess we can just ignore that it’s a reit that owns 440 medical buildings across some 10 countries…. The last i checked, that was pretty diverse.

Tell me the specific risk here with selling a $5 strike put?

Price goes to $3 ? $2 ? Cool. You still keep collecting 0.6/share and keep collecting premium until there is recovery above $5 (assuming you sell cover calls for your cost basis)

Markets move together, the entire reit market is down, eventually it will go back up. Again…. WORST CASE SCENARIO YOU GET 0.6/shares PLUS PREMIUM from covered calls until price recovers above strike price of covered call.

Let’s talk about bankruptcy risk too.

Dscr 3x

All debt obligations paid off until 2025

300m extra cash flow per year to pay off debt aggressively by dropping dividend 3 days ago to 0.15/quarter/share. Opens 300m of extra cash per year.

0 loans are actually secured by real estate. All debt is unsecured. Can always raise cash by having a mortgage secured by a property.

Significant cash flow despite 4th largest tenant not paying a penny, they are expected to resume payments in September,

Ltv at around 56% as far as i recall

Can always sell assets to decrease debt and pay off debt (Australian portfolio sold for 1B just 2-3 months ago for a 5.7 cap, yale buying some properties from them too for $400M for a similar cap rate)

And obviously, they can just refinance debt always.

So yeah….i don’t see bankruptcy happening when you’re at a dscr of 3x

 

[Groove]

Great short term chart analysis. What about long term fundamentals?

Remember, chart looks the worst at the bottom.

Charts also happen to look great at the top.

If someone sold a $5 strike put then there’s significant downside protection. Even if downside momentum continues, price is undervalued from a pure fundamentals perspective.

Again, worst case scenario is acquiring a company that holds a crap tonne of real estate at an incredible price point. It may not be the lowest point, but holding something while it recovers and collecting a dividend and premium for cash covered puts is itself a good worst case.

From a fundamentals perspective, company isn’t going bankrupt, has a dscr of 3x, has pretty much taken care of all debt coming due until 2025, so no refinancing at higher rates for now. It’s ironic how office reits have a higher valuation than this thing.

Fundamentals. I keep talking about fundamentals here. But i agree with you, chart looks terrible, and this is where the brave/smart/value seekers come in to get incredible value.

I'll be super curious to see how this one does... I'm definitely less of a fundamentals guy and much more of a technical analysis trader for sure. Experience in the industry hopefully gives you an edge.

 

[dieABRdie]

It's not one trade. It's a series of trades. You cannot look at options as a single trade that you either win or lose. Read the following to understand the core strategy (chapter 6 is literally where all hte money is - managing, adjusting, and repairing naked puts).

Selling Puts: The Complete Guide for Finding and Managing Great Put Selling Trades (No Opt In Required)

How much would you think someone would have to set aside to start implementing this strategy? Slowly at first... of course.

I uinderstand the risk.... so I'm going to start with a chunk of money I don't need any time soon; if ever.

 

[cyanide12345678]

How much would you think someone would have to set aside to start implementing this strategy? Slowly at first... of course.

I uinderstand the risk.... so I'm going to start with a chunk of money I don't need any time soon; if ever.

You can start with as little as $460 ish dollars which is what you would need for 1 $5 strike contract if you got $40 in premium.

However more is up to you and your personal preference.

If you had a margin account you could start with $250 for the same trade.

Money needed for Cash covered put 1 contract = (strike price x 100) minus premium received.

However big you want to go is a question for yourself and not for me. That question comes down to risk tolerance, comfort, net worth, earnings, and remaining portfolio size.

I personally do it with an account with ~600k and I’m usually aiming for 1.5-2 percent return per month.

 

[Apollyon]

Ah yes, the low-risk way of getting 20%+ returns that none of the savants on Wall Street have figured out.

How do you know they haven't?

 

[cyanide12345678]

How do you know they haven't?

I personally have.

 

[JacobMcCandles]

I personally have.

You deleted that chart pretty quickly but did your chart start at the lows of 2020?

 

[JacobMcCandles]

How do you know they haven't?

Because we'd hear about it if they sustained it long term. Buffett's annualized career return is 19.8%.