The Maneos Compounding Machine - January 2021 Update -

Summary

• "There will be good years and there will be bad years, but the compounding will continue on unabated." - Pietros Maneos.
• "If compound interest is indeed the 8th wonder of the world, then leveraged compounding is certainly the 9th, 10th and 11th." - Pietros Maneos.
• "A penny saved is just a penny earned, unless of course you double that penny every day for 30 days, which is then $5,368,709.12." - Pietros Maneos.
• "CAPITAL is perhaps the last form of individual freedom." - Pietros Maneos.

2020 was a tremendous year for The Maneos Compounding Machine even with the massive March sell-off, as I simply sat on my hands with existing positions as well as added to the most distressed sectors within the market.  Capital rose from $641,432.46 on January 1st, 2020 to $882,871.95 on January 1st, 2021 an increase of $241,439.49 in 12 months. It will be interesting to see how 2021 unfolds within financial markets.  Will the political instability as evidenced by the Neo-Marxist/BLM Riots of the summer along with the Neo-Fascist/Populist/Redneck storming of the Capitol factor into markets or will markets merely shrug these off as just minor distractions for the profit-making of companies?  As for me, I am neither a right-wing-populist nor a left-wing-Marxist, but rather, an Arch-Capitalist, always on the hunt to acquire more and more wealth.  I identify more with Andrew Carnegie and Mayer Rothschild than with Joe The Plumber and Thomas Piketty.  I loathe both political and financial populism.  Populism is nothing more than the spirit of Thersites, the embittered average-joe resentnik, whereas I self-identify with godlike, gleaming, aristocratic Achilles, Lord of Phthia.

But let us move on from a sort of philosophical macro musing tinged with Homeric Classicism to the nuts and bolts of investing.  One of the additions that I wanted to add this year is to dollar-cost-average at least $1,000.00 a month even if my option strategies continue to bear fruit.  I have decided to buy approximately $1,000.00 a month of (DIA), which is the Dow Jones Industrial Index Fund.  I might do this in perpetuity: where 2021 is allocated for (DIA), 2022 might be reserved for (QQQ) and 2023 for (VOO), and then in 2024 to start the process over again with (DIA).  I think dollar-cost-averaging-indexing coupled with a type of value investing can be a potent combination for long-term-wealth-creation.  So, for example, last year if I collected $6,000.00 in premium, I would buy $6,000.00 of positions whereas this year, I will buy $7,000.00, $6,000.00 from premium and $1,000.00 from the addition. So, on January 4th, I did the dollar-cost-averaging for the month.

1.04.21 - 3 shares of (DIA) at $306.295  = $918.885

On January 15th, 2021, I collected $1,277.30 on $22,000.00 of call exposure for an annualized return of 69.67%.  I immediately set about allocating the capital to the two Canadian banks - (TD) and (RY) - that I owned the least amount of in my brokerage account.  Additionally, both are at the top of a 'discounted-free-cash-flow' model that informs my investing decisions.

1.15.21 - 7 shares of (TD) at $59.215 = $414.51

1.15.21 - 10 shares of (RY) at $85.1667 = $851.67

On January 20th, 2021, while the world was passively viewing the inauguration of Joe Biden, I was actively making moves as if I was Nino Brown taking over The Carter.  I noticed that I owned 169.30 shares of TQQQ, so I decided to purchase 31 shares of TQQQ so that I could sell 1 call contract to pocket the high premium.  I purchased the 31 shares of TQQQ at $195.5999 for a total investment of $6,063.60.  Now, by owning over 200 shares, I could sell 1 contract, and still keep the other 100 shares as a buy-and-hold.  I sold the TQQQ February 26th 2021 200.00 Call for a premium of $1,464.31.  So, that addition of $6,063.60 allowed me to pocket $1,464.31 an annualized return of 289.7%.   (TQQQ split, so it became 2 contracts TQQQ February 26th 2021 100.00 Call)

Now, this is not the actual annualized return on the option, as that would be on the entire contract/exposure of capital - not merely the $6,063.60 addition to my brokerage account, but you can see from my risk-reward sensibility, it is calculated as that of a gambler (i.e. this is the amount of capital committed and this is the pay-off.)  The actual annualized return is 87.85%, which is still quite amazing.  I took the premium/free money and made two purchases as illustrated below.

1.20.21 - 10 shares of (ARKQ) at 90.3695 = $903.70

1.20.21 - 14 shares of (ERUS) at 39.955 = $559.37

On Friday, January 22nd, I was able to see for the first time the shares that were transferred over to Interactive Brokers being lent out in their stock yield enhancement program.  For perspective, previously, my account balance at Interactive Brokers was approximately $28,000 and $5,000 or so of the $28,000 was lent out every day, which resulted in about $3 a day.  But on Friday, January 22nd, $139,114.00 was lent out, nearly 30 times the previous amount.  Unfortunately, the positions that transferred over from Folio did not command a higher loan amount to short sellers with some garnering only .15% as compared to some of my existing positions which earn 80+% to short sellers.  So, the total amount of interest income collected was 4.77 - not bad, but when I first saw the number of $139,114.00, I thought that it might be $30 to $50 for the day before I examined the figures a bit closer and saw the low loan rates. 

Yet, even with the disappointment on the amount, it is still another source of passive, labor-free, CASH-FLOW.  For me, 2021 is all about dividends, option premium, bitcoin lending, and share-lending.  All four provide streams of income along with my real estate holdings, none of which are connected to a job.  I have always had contempt for a day-to-day job, which contrasts with Joe Biden's view below where he deifies a job as something to aspire to as opposed to something to abhor.  And in modern Society, the only way to be above holding a job is to have CAPITAL.  CAPITAL is perhaps the last form of individual freedom.  Furthermore, my stance is classically Greek whereas Biden's is modern American.  I stand more with Aristotle's pursuit of 'leisure' than with Biden's 'job-obsession.'  One might even aver that capital is the last vestige of Aristocracy. 

Now, contrast the spirit of Joe Biden above with Robert Kiyosaki below whose entire existence has been the pursuit of wealth, not a job, which is just a form of slavery: economic slavery.

Now, I understand that many of you reading this essay have a job, and I am not trying to be nasty with my assertions, but my larger point is that you should realize that the sole purpose of a job is to effectuate a wealth transfer from your employer into your brokerage account/real estate holdings, so as to attain FREEDOM.  Follow Robert Kiyosaki, not Joe Biden. 

And to this point, during the month of January, I read books as if I were Oscar Wilde luxuriating in Saint-Germain-de-pres, exercised in the gymnasia as if I were Achilles himself, and tended to my Jimmy Nardello Italian Peppers as if I were Monty Don at far-famed Longmeadow, and yet my capital increased $20,295.22.  What job in America, or any nation, would pay me $20,295.22 a month for reading books, exercising and gardening, essentially living the life of Riley?  Never forget, CAPITAL is perhaps the last form of individual freedom.  

On January 25th, I continued on with my option strategy.  I sold $70,000 worth of puts and collected a premium of $6,493.86, an annualized return of 111.32%.  So, for the month, I have $42,000 of calls and $70,000 of puts for a total capital exposure of $112,000.00 and a total premium collected of $9,235.47, an annualized over-all return of 98.95%.  The purchases are below.

1.25.21 - 10 shares of (BMO) at $76.4495 = $764.50

1.25.21 - 10 shares of (SPG) at $96.425 = $964.25

1.25.21 - 50 shares of (UNM) at 24.83 = $1,241.50

1.25.21 - 15 shares of (PRU) at $81.22 = $1,218.30

1.25.21 - 30 shares of (BKU) at $36.64 = $1,099.20

1.25.21 - 40 shares of (VICI) at $26.2699 = $1,050.80

1.25.21 - 9 shares of (PTY) at $17.9399 = $161.46

$6,493.86 collected, $6500.01 allocated, a mere difference of $6.15.

Even though I thought I was finished for the month on January 25th as evidenced by the above paragraph, I saw an opportunity on January 26th that was similar to the (TQQQ) call as outlined previously.  I noticed that I had 70 shares of (URTY), so I decided to purchase 30 shares in order to sell the call.  It cost me $3,054.00 to purchase the 30 shares of (URTY), which breaks down to $101.80 a share.  I immediately sold 1 contract of the URTY February 19th, 2021 105.00 Call for a premium of $757.32.  And as you know, money in, money allocated.  I opted to purchase the iShares Aerospace and Defense ETF, (ITA).

1.26.21 - 8 shares of (ITA) at 92.935 =$743.48

January 31st Update

Money Inputted into 'The Maneos Compounding Machine' = $592,080.00

Present Value of 'The Maneos Compounding Machine' = $903,167.17

Total Return = 52.54%

CAGR = 17.51%

Monthly Income = $11,258.16

Year-To-Date Income = Unavailable due to Motif-Folio-Interactive Brokers Transfers

Option Capital Exposure/Premium/Annualized Return: $122,500.00/$9,992.79/97.88%

Option Capital - Call Exposure/Put Exposure - : $52,500.00/70,000.00

Money Inputted Back into The Machine = $7,000.00 + $1,159.74 + $9,992.79 + $105.63 = $18,258.16 (Dollar Cost Averaging + Dividend Reinvestment + Option Premium + Securities Lending)