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Did I Miss The Boat on MARA and BTC?
Episode 47th December 2023 • Yield Guide • Tibio, Inc
00:00:00 00:13:54

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This episode explores the possibility of missing the boat on a big trade and what that means for your portfolio and your life. I talk about the emotions involved with that type of investing and offer an alternative type of investing that I personally use to grow wealth and hope that you will too.


00;00;00;00 - 00;00;40;28

Kevin Hamilton

Know thyself. It is as true in trading and investing as it is in life. One thing that I know about myself is that I am terrible. Absolutely terrible at holding long positions. Emotionally, I just can't handle it. I'm no good at timing the entry or choosing the exit. Whether I'm profitable or not, it doesn't really matter. I became acutely aware of this shortcoming when I lost around $90,000 on a huge bet on small oil and gas companies.

00;00;41;00 - 00;01;17;15

Kevin Hamilton

One in particular, bright burn energy partners, BP, headquartered here in California. I bet big held until the very end. Diamond handed all the way and lost. And now I can't stand holding a long position for very long at all. That one loss may have affected me psychologically, or it may just be my nature. How I naturally behave. Let's roll forward now and take a look at Marathon Digital Holdings.

00;01;17;15 - 00;01;47;11

Kevin Hamilton

Major, a a recent trade that I exited after holding for several months. That is a long time for me. The psychology of it is pretty crazy in almost all of these kinds of trades. At first I'm very certain and want to scale up my position. But then at some point I'm watching the price action on the chart, reading news headlines, watching related securities trade.

00;01;47;11 - 00;02;30;14

Kevin Hamilton

And I think to myself, Man, what if I got this wrong? I may still hold it. But once that doubt creeps in, it begins to grow. And then I may even have trouble sleeping. From Tiberio, it is a yield guide, a show about conquering the markets and building personal wealth. I'm your host, Kevin Hamilton, and in each episode we go deep into the strategies, stories and tools that I've used and continue to use to build wealth.

00;02;30;16 - 00;03;03;04

Kevin Hamilton

On this show today, I'm going to explore the emotional side of investing through the lens of a recent trade that I closed early for profit, but by doing so gave up nearly 100% to the upside. I'm also going to compare this type of trade, one big trade, to a strategy that involves a lot less prediction, a lot less stress, and a lot less emotion.

00;03;03;06 - 00;03;31;28

Kevin Hamilton

Okay. Once that creeps in that doubt, I'm done for. To be fair, usually when I start having problems sleeping over a particular position, it has worked out very well for me to act on that. And close the position. This was the case for my trade on the regional bank First Republic. I woke up one morning after barely sleeping at all and closed the position.

00;03;32;00 - 00;03;58;25

Kevin Hamilton

The following week they were being taken over by JPMorgan Chase. And now if you look up their ticker, they're trading for a penny and will soon be delisted. The market is extremely good at creating that doubt. No matter what your trade or position is, the swings will go up, go down and try to take money from everyone on both sides of the trade.

00;03;58;28 - 00;04;27;20

Kevin Hamilton

In this case, I have been scaling in slowly on MHRA in the fifteens because I knew there was a good chance it goes back to the tens or nines and I had done a pretty good job of selling options if assigned on all of my puts. My cost basis would have been in the nines, so not bad. But then the price moved down to the sevens.

00;04;27;22 - 00;04;59;05

Kevin Hamilton

I was assigned a nearly all of the put options. I rolled about a quarter of them out and took assignment on the rest. The selling was so strong on MRA for days, weeks, even the price behavior deviated from Bitcoin. Mario was selling off, even as Bitcoin was rising. Every single minor pop was sold off within minutes, which didn't even really give time for the option.

00;04;59;05 - 00;05;29;25

Kevin Hamilton

Prices to adjust based on that price action. I was convinced that there was a high probability of a large pullback in the price, maybe back to the sevens or possibly even back to the fives with Amara trading in the nines. And based on my view of the price action, I exited the trade and banked roughly a 10% profit.

00;05;29;28 - 00;05;57;14

Kevin Hamilton

And then if there was a pullback, the idea would be I would try to reenter under seven. Right. That was the plan. The punchline. If I had held through today just a few weeks longer, I would be up more than 100%. Okay, back up just for a minute, because the emotion is very strong. Did I make the right decision based on price action?

00;05;57;17 - 00;06;25;22

Kevin Hamilton

Probably. I'm pretty good at reading price action. And if Bitcoin had dipped instead of moving up above 40 K, then for sure Mera would have sold off hard and fast. But the emotion is there is the emotion. What drove my decision? Whenever I'm holding a large long position, I hear that little voice going, boy, what am I doing?

00;06;25;24 - 00;06;55;09

Kevin Hamilton

I'm over extended on this account and I'm currently up 10%. The little voice in my head is screaming at me to take profit. And while I may have read the price action correctly, I was also biased looking for weakness in order to justify closing the position. Is it just my nature? Is it driven by my previous loss in oil and gas?

00;06;55;11 - 00;07;28;06

Kevin Hamilton

That little voice screaming, Take the profit now. Take the profit now. If you wake up in the next morning and Mara is back at $7, you're going to be so angry at yourself. So take the profit now. So that's what I did. I started scaling out of the position and or leading up to the earnings announcement. That being another reason why I wanted out.

00;07;28;09 - 00;07;58;04

Kevin Hamilton

I don't like to trade over earnings and I don't like to hold large positions over earnings. I scaled out and ended up scaling out of the position, I believe before Mara announced earnings, their earnings came out and they were pretty good. So not a week later, maybe two weeks later, the price action completely shifted, the aggressive selling subsided.

00;07;58;06 - 00;08;24;25

Kevin Hamilton

Bitcoin shot up and Mara followed. Now, I noticed that the price action has shifted. But here's the thing. I don't like to be too wishy washy in my trading and since I. I made the decision to exit the trade. I didn't want to then go, my gosh, price action shifted. It's only been a couple of days now.

00;08;24;25 - 00;09;03;05

Kevin Hamilton

or just under:

00;09;03;08 - 00;09;39;02

Kevin Hamilton

But it isn't really about this. I don't like this kind of trading, which is also why I'm terrible at holding these kinds of positions. My comfort zone. Going back to knowing yourself and your investor and choosing a strategy that is compatible with that, that is critical for both the day traders and the swing traders. My comfort zone lies in repeatability and being able to find a trade that I can repeat over and over and over and over again.

00;09;39;04 - 00;10;01;00

Kevin Hamilton

I don't mind giving up this win because it wasn't repeatable anyway. And would I exit the trade now at $15 per share? Or would I hold? And if I hold, will it go to 20 or back to ten? Does it end up being a loser if I hold it long enough and that is the problem with these kinds of trades.

00;10;01;03 - 00;10;47;09

Kevin Hamilton

We never know and we can't know. We cannot predict the market. We cannot predict the future of the market or of a single stock. We don't know what the price will be tomorrow. So instead of having to execute one trade perfectly meaning size it perfectly timed it perfectly for both the entry and the exit I need. For me personally, I need a system that allows me to reliably execute trades repeatedly, almost on autopilot, without having to predict the future or time the stock or time the stock market at all.

00;10;47;11 - 00;11;23;21

Kevin Hamilton

This is why I sell options and why I'm comfortable with option selling strategies in general. So don't worry about missing the boat on one big trade. If Mara goes to $50, I will be ecstatic for everyone who's stuck with it. But in the grand scheme of things, it doesn't really have a big impact. And you may find that by chasing the one big trade that works out, you'll have so many losers.

00;11;23;24 - 00;12;01;05

Kevin Hamilton

Don't worry, when you see a news headline talking about the hut merger with US BTC, you couldn't have known. And would you really have been better off letting your money sit in hurt with enormous risk for years, waiting for some black swan event like that to take you up 1,000%. And even if you would have been long on Hutt, would you have put enough capital into that wild bet to make a difference in your total portfolio or change your life?

00;12;01;08 - 00;12;35;20

Kevin Hamilton

Probably not. I hope not, because that would mean going all in and because for every one of those there are a thousand just like it. That end up losers. This is how investors blow up their account. Let's avoid that whole mess altogether. It's fun. It's high anxiety, it's high excitement, high risk, high reward, potentially. But I believe that there's a better way.

00;12;35;23 - 00;13;11;19

Kevin Hamilton

Let's spend the time instead working out a repeatable investing strategy that works with our own personal emotion. What's mine? I sell stock options over and over and over again. The strategy is so repeatable that I wrote software to do it for me, that software is available for you today to use for free on up to $10,000 at table 0.8.

00;13;11;22 - 00;13;35;29

Kevin Hamilton

Get all of the market data you can handle. Find volatility to drive your options trading strategy over it to become that will do it for today. Thank you for being here. For listening to this episode. For questions about today's content, please reach out to me on Twitter at Mining Theta or a message me using the little icon in the lower left corner of my website.

00;13;36;02 - 00;13;54;03

Kevin Hamilton

Yoakam I would love to hear about how you're using options in your accounts, your trading strategies, what's worked, and what hasn't worked for you, and what Tiberio can do for you. Please write to me and let me know.




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