He “Doesn’t Know The Gentlemen” September 22, 2024 UNDECIDED? These 2 minutes with Bill Maher pretty much say it all. HEAR NO EVIL, SEE NO EVIL Russia was a “hoax” so long as you don’t read Volume One of the 381-page Mueller report . . . or the equally thorough Volume Two detailing at least 10 instances of criminally indictable obstructions of justice Trump committed to keep Volume One from being even more damning. (Take these 2 minutes to watch that). To those with eyes and ears open, this is all old news. Something NEW no Trump fan will allow himself to be exposed to is FROM RUSSIA WITH LEV. Trump, of course, doesn’t know Lev. Or Igor. Might have had a photo with them — he has photos with thousands of people! But he “doesn’t know the gentlemen.” Ha! Watch! So fun — except for the fact that it really happened yet Trump could still be elected; and millions of his followers will only accept the results if he is. BONUS: PROFITING FROM DJT Why didn’t I think of this???? It’s basically too late now — but interesting, I think. My old pal Terry writes: Here’s how I use options to capitalize on the huge difference between the market cap and the fundamental value of the enterprise. You can’t sell DJT short because even if you can find a broker who will accept the order, you pay a huge monthly interest charge which goes to whoever loans stock to cover the short sale. Normally, if you believe a stock is headed lower, you’d buy a put on the shares, but DJT is so universally recognized as trading well above its fundamental value that the puts are extremely expensive and pretty much not worth the risk. For example, a two-week at-the-money put on DJT would cost $2.67 as I write this. The stock would have to fall 11% in those two weeks before you started making a profit, but if it remained flat or moved any higher, you would lose 100%. Not a bet that appeals to me. Instead, I have been selling what are called vertical call credit spreads. I have been selling these every month since DJT was about $40 and every trade has been profitable (about a 50% average gain on the maximum risk for a one-month time period). I made only small investments, however, because it was with money that I could not afford to lose. Even though the stock was ridiculously over-priced, you never knew when a MAGA millionaire or Russian oligarch might buy shares in hopes of getting an invite to Mar-A-Lago. I believed that the risk-reward basis would change on September 19 or 26 when the six-month lock-up restriction would expire for insiders who received shares in DJT. Two individuals who own about 10% each could then sell their shares (Donald publicly stated that he would not be selling his, a statement that caused them to soar by 20% for one day only). These other insiders probably don’t like Donald that much because they both are suing him for something related to the issuance of their shares. So I figured that they will unload their shares before the election when Donald may change his tune and start dumping his shares. On September 10, with the stock trading about $18, I sold call options on DJT expiring on October 4 at the $18 strike as part of a vertical call credit spread, buying October 4 calls at the $23 strike. These calls would all expire at least one week after the lock-up period had ended, giving the insiders ample time to unload some of their shares and presumably push the selling price down (or at least not cause it to move higher). I received $167 for each spread I sold. A $500 maintenance fee was required (like a margin loan but no interest is charged). I just had to post $333 per contract to maintain the position. This meant that my maximum risk would be $333 per spread and that is how much I would lose if the stock rose to above $23 on October 4, a highly-unlikely event in my mind. If the stock remained flat at $18 on October 4 or traded any lower, both call options (my long and short positions) would expire worthless and I would gain 50% on my maximum risk. I figured the odds were strongly in my favor, and I committed considerably more than my earlier similar spreads. In fact, I’ve subsequently sold similar spreads almost every day since then at several lower strike prices as the stock fell to below $14. I’m finished for now, and have to wait out two weeks to cash in. I am a little concerned that the stock must stay below $14 to make a gain on some of my spreads. There is always the possibility that Elon Musk or Putin will buy a few hundred million shares to gain political favors. If they do that, I hope they will wait a couple of weeks to do it. If I wanted to cash in on my September 10 spread sale, I could buy them back for $37 at today’s prices for a $130 gain on the $167 I collected per spread, but I am willing to wait out the two weeks to collect the full amount that will come my way if DJT stays below $18. I know you have personally bought both puts and calls along the way, but I was not sure you knew all about the opportunities to be a bit more creative with option spreads. PS — I am totally obsessed by Kamala’s arrival on the scene and am doing whatever I can, including personally contacting three Republican old Vermont friends now retired to Florida about voting for her in a state which really counts (yes, I think Florida is a swing state). Two of them (and their wives) have agreed to vote blue for the first time ever. → Note to readers: when you have a brilliant idea like this, please share it with me before it’s too late for me to get rich!