Power To The Elbow

This post is a summary of how I did in February. I am including my personal goals, trading results, Index Coffee and Books results, entrepreneurship progress, and some silly hobbies like running and chess. I am making these monthly posts in an effort to hold myself accountable.

Personal

2 Goals

1. Give the world all the love, respect, and kindness I have.

I did better here. All my interactions with family have been positive. I leaned into going to events I would have passed on in the past. I even initiated a couple of get togethers that have previously been unthinkable. 

I am actively making new friends at the weekend running clubs. I have found that showing genuine interest in their interests has been the best friend making tactic. Go figure…

I am going to try to do better next month by organizing a friend get together. I am traditionally awful at this. We will see how it goes.

2. Create something that makes the world better.

I did not do anything to advance Beyond the Book Club. Fail! I did read a book called Murder Your Employer that would be an awesome book for the show. There are so many fun possibilities including hosting a “track meet” and discussions about the overall concept. The book left so much unsaid that a show that talks about it is really needed.

My prototype for a light fixture that you can hang plants in underwent at least 3 interactions. Here is a picture of the latest. It is currently being glued up.  

I think this will look good once it is caulked and painted white. I am disappointed I did not finish by the end of the month. I must have something for sale by the end of March.

I thought alot about hosting a charity treasure hunt around town. Before I thought I needed an app to pull this off. Now I am thinking I might be able to do it with a blog that has posts password protected. In order to unlock the post you must find the password hidden somewhere… This would be cool and I want to partner with someone soon.

Index Coffee and Books

Goal – Achieve financial solvency

February we were cash flow positive and profitable! This was a big deal considering this month is traditionally one of the worst months of the year. Sales were up 35% over January despite having 2 fewer days. Coffee increased modestly, but most of the increase came from book sales. We added quite a few used books and some new ones, but did not see any new buying habits from customers. They just resumed buying books at the same rate as they were before January. 

Expenses are nominally higher in March so we will need to maintain the momentum if we shall stay financially solvent.

Investing

This went really well. Overall, the account went up 29.03% just in February. I collected a premium at 5.59% of available cash. I ended the month with no short contracts anywhere near the money and a clean slate to operate in March.

I got very lucky in the market’s reaction to ON Semiconductors Annual report. The stock price run up got my short puts out of the money and left me with a nice little profit. It is not my intention to be active in a stock that has known market moving events scheduled because I could have just as easily gotten unlucky and be staring at a big loss.

Buzzer Beaters

This is when I sell an out of the money option on the same day that it is expiring. I only sell options that have over a 90% chance of ending out of the money and only when there isn’t any news expected. If the underlying moves against me, I will buy back the option and sell a future dated option for the same or more money, effectively rolling my position forward.

I successfully executed this strategy 5 times. Of the total premium I collected in February only 7.32% came from this strategy. The pricing on daily options were comparatively low most of the month. If the market experiences some down days the pricing should get better and I should see more opportunities to execute this strategy. 

Calendar Spreads

I did not execute this strategy in February. I looked at trying it in the lead up to the NVDA earnings event, but the pricing was too rich for me and the hype was too much for me to reasonably believe I had an edge.

Selling Puts

This strategy has the potential to be the most profitable and it is where I collected the most of my premium from. After the big up move in ON stock price on February 5th, I successfully sold out-of-the-money Puts and Calls without any drama the rest of the month. I hope that this continues for the rest of my life…

I know it won’t. It is important that I stay disciplined in my use of liquidity so that I can stay in business when the price of an underlying moves against me. 

I also need to research more companies that have a high IV, buyback program, notable short interest, and weekly options. Having more options when selling options is always best.

Books I Read in January

Death at La Fenice by Donna Leon

A Gentleman in Moscow by Amor Towles

The Greatest Capitalist Who Ever Lived

The Last Devil to Die by Richard Osman

An American Tragedy by Theodore Dreiser

The Subtle Art of Not Giving a Fuck by Mark Manson

Man’s Search for Himself by Rollo May

The Octopus in the Parking Garage by Rob Verchick

Murder Your Employer by Rupert Holmes

Wrong Place Wrong Time by Gillian McAllister

The Daughter of Time Josephine Tey

The Slippery Slope by Lemony Snicket

Running

I ran 200 miles exactly in February. I also set a PR in the Half Marathon at 1:45:33. I did this by myself on a breezy afternoon one weekend after my wife was away all week. I think I could go faster if pushed. The running clubs are peer-pressuring me into training for and entering a race. I don’t know if I will give in or just continue to add mileage and speed until I feel I am competitive. 

I think I will take a stab at breaking my 10k PR this month. 

Chess

My Blitz rating ended up at 1633. That is up slightly but it was as high as 1714 on 2/16/24. I found a local chess club that meets once a month at a local library that I might show up to. I have never played a real person over a board before so that will definitely be a new experience.