During periods of market uncertainty, investors should maintain disciplined strategies such as selling covered calls to generate income while waiting for market bottoms, and focus on companies with strong fundamentals like Broadcom's custom semiconductor solutions for AI infrastructure. The video emphasizes that market volatility creates opportunities for strategic investors who avoid panic selling and instead use technical analysis and fundamental research to identify undervalued assets.
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Good morning, good evening ladies and gentlemen wherever you are. It is Friday 5th of June and the stock market is extremely extremely red today. I mean I guess comparatively to the last couple of weeks. I guess we can call this pretty red. Uh let me just get everything set up and then we are good to go. Welcome. Welcome. Thank you for the 11 of you over here.
How is everyone doing? I hope uh the well I hope the stocks that you own are treating you better than mine. Uh because mine is heavily heavily correlated to Ethereum.
And I mean at this point it's no longer a surprise once again Tom Lee is wrong.
Crypto winter is definitely still ahead of us. We are not near a crypto spring if you ask me, but we might be pretty close to a bottom. And I think that is where I want to start today. Uh before talking a little bit about Brocom and perhaps you know starting to open a position in one of uh the most fundamental companies in the entire AI buildout uh after Nvidia.
I think especially as uh I mean right now the frontier models claude GPT they are gearing up for IPO season and as they are gearing up for IPO season I think it makes sense for them to uh keep increasing their prices so that they can show investors that hey look at me I'm generating revenue but there will come a tipping point in this entire AI race when it will no longer be about petting their revenue but taking market share and at that point in time. I expect uh companies like Broadcom that provides uh cheaper uh chips to really uh start to, you know, take a bit more market share. Yep. Got to love it.
Nothing like losing money.
Absolutely right. Absolutely right. I love the pain. Um after after like eight, nine years of doing this. Yeah.
like at 20 $19 $20 initially I was considering taking a bit of you know taking the loss on bit mine but I'm not sure now it it's just like it feels like it's not worth it I I would just write it down and I did something uh yes we will start with the bit bit mine news and I've gotten the video ready so it will be released over the weekend as well so you can look forward to that but But let me cover uh Bitmine first. Well, um when it comes to Bitmine, uh I've decided to play it extremely aggressive on the covered calls rather than to seller of the stock. So, what do I mean?
Now in the past or usually my playbook for selling covered calls are 45 days out but at these prices uh and we know Bitmine is a highly volatile company so it can run up 30 20 30% in just a single week and so that means Bitmine could very easily get from $16 to $20 in just the next 5 days. We have seen that happen many many times before and that is because this is the nature of investing in crypto treasury companies right so that's that's the first thing and so because of that I was always afraid of uh I was always a little bit concerned uh about selling covered calls on Bitmine 45 days out when you know they are trading at such low prices because I think the 30% move can happen in a week much less 45 days.
So what I have done is or what I've actually done uh is actually to sell uh Bitmine covered calls over here at $2021 and I have done this uh just until 18th of June. So two weeks out and on a whole I think I've so far I've collected around $500 in premiums today itself and then there's another around $800 left on the table which means this entire trade over two weeks could net me $13,000 and I plan to keep doing that until uh Bitmine proves that it has the momentum right to to break past uh 20 $21.
And that will really help me to stack the cash as I feel like still there is a possibility for a slightly bigger drop uh in Q3 and Q4 of this year.
Now I want to start with uh this BitMine news over here because I ended with this previously and um so right now I just want to start with this because I've said in the past that Yes, that there's really nothing other than opportunity cost, but with so many other things running other I mean other than software, I don't really know whether or not it makes sense, which is why I decided to just run the aggressive covered call strategy. Uh when it comes to software names, I'm pretty confident in a software rally. But with that being said, am I certain that it's going to happen faster than uh Bitmine? No, I'm not. And I've already gotten into Zeta at and uh Service Now at pretty good prices and 98. So I got into service now at around 98 99. It is at 115 now. Do I really want to do I really want to add into service now at these prices? Uh, probably not.
Not because that I don't think it can get back to over $200. It's still a double from here, definitely. But will it get back to over $200 faster than Bitmine? I can't answer that question as a yes. Right. And right now if you take a look at service now we are kind of breaking through the the 238 line. So it doesn't seem like we are I think we're going to get a gap close at around $110. And Zeta we are up nearly 30% from our cost basis. So again no hurry to get in there because of that decided to just uh sell a covered call pretty aggressively to cover the entire position.
Uh well I I I I mean I personally do not dare to use margin at this level. I bought a little bit more today at around640.
Uh yeah so I I basically swung the pendulum from thinking hm should I sell to oh okay this is a bit ridiculous.
Let's buy a little bit more. And then I just sold aggressive covered calls to cover the entire position. Receive around $1,300. That's fine. 18th of June just uh just about two weeks out. If it doesn't get to $20, um I'll keep the 103, roll it out for two weeks in.
Uh yes, I do. My ETH holding is not at at 2.4K. My ETH holding is at 2.8 2.9K, I believe. So, uh yeah, still holding. I have around but my ETH holding is definitely not as big as my Bitmine holding. Only have about $20,000 inside there. Bit mine is much bigger. But this was the article. Uh this was okay this article came out uh a couple of days ago but Ben Cohen has been saying this for a while now that he said that the correction in the stock market later this year could drag Bitcoin down towards a cycle low around October. This isn't the first time he's saying this.
He has repeated this many times and this is why that's why uh on Wednesday when I was saying somebody made the quote I can't remember who it was. I went to dig Ben Cohen said it and just nice you know two days ago we had an article come out on this and I feel like this makes a lot more sense because again I want to explain when I say that Tom Lee is not a I wouldn't consider Tomley a crypto person. He is just an analyst that you know believes the asset can appreciate but he's not someone that is very ingrained into the crypto space into the inner workings of how the tokens work and things like that. Ben Cohen isn't the the only one. Uh there are a couple others. Uh Ali Martinez as well, I believe. Um he's he tends to talk a little bit more about crypto for for a long period of time. Uh there are a lot of people that that see the bottom of crypto uh towards October, November. In fact, only Tom Lee and people in the treasury companies think that the crypto winter is ending early. And I feel like they have to say that because they have a vested interest in their stocks continue to have liquidity.
Okay. So if you see over here, the analyst type Bitcoin's outlook to the S&P 500 saying that the four year cycles are not unique to crypto. So he's saying the for cycles can be seen in a lot of uh different parts of the market. And over here um his base case scenario remains a secondary correction in US equities later this year arguing that Bitcoin status as a high beta liquidity sensitive assets could leave it vulnerable to another link lower. So he has said this he we will find a new low between uh now and October. So when I look at the charts we really don't have anything nice as a support below uh other than this one.
Yeah. If you go back you don't really have anything I guess you have one you have ETH at 1500 over here back in 2023. that is somewhat of a support but if you don't get a support there the next the next level lower is basically 1300 so we are basically right at that level where ETH was bouncing uh back in 2023 and I guess yeah for for March of 2023 so so Ethereum was around this level back in 2023 if this doesn't hold the next leg lower will be between around 1300 Now, I think this to me doesn't necessarily mean that the thesis is broken for a couple of reasons actually. Number one, if you take a look at the transactions and everything on Ethereum, uh it's still been rather stable. I wouldn't say it is increasing.
it has been stable but as we get the crypto bill passed through I believe the crypto bill is uh getting passed through by this year I do think so then I I I I think that we see more tokeniz more tokenization happen within the financial sector however I think what is important for us to remember is that that is going to take some time number one number two the fact that people are tokenizing their stocks and their money market funds on Ethereum means that they have to hold Ethereum on the balance sheet.
And for a lot of these financial institutions, they would much rather buy Ethereum low than high if they need to accumulate it on the balance sheet. And I believe there's a what we are seeing on exchanges uh having you know the the supply of ETH fall off the cliff basically while the price is moving signals two things. These two things are definitely not untrue. People are accumulating but price is not moving because people are not accumulating from the open market. And the reason for that is that in order for them to process that amount of transactions uh on Ethereum's network, they need to own as many ETH as possible, right? Because you pay the gas fees in ETH. Now the one interesting thing to note is that economically they are tied in some way the price of ETH as well as the gas fees but not necessarily. So what do I mean now? Every time a transaction happens or you need to process a block of transactions you you need to pay a certain gas fee. This gas fee uh especially during times when um the transaction gets uh transaction volumes get high. This gas fees can actually have a compounding effect because it increases uh exponentially every time the block value is more than half.
Right? And if that happens if you have three or four blocks in a row where the block volume is more than half, you know, you compound that 12% increase in fees three or four times in a row, you get a pretty big increase in fees over a couple of minutes.
And so that is what the next upgrade of Ethereum Glam Amsterdam actually hopes to solve. Uh it increases the block volume so it's harder to get to that half a block limit. Now the thing is if let's say someone choose to transact at such high prices. Yes, they are burning off the ETH that is lowering the supply of Ethereum. Again, we have seen the supply of Ethereum lower and yet that doesn't necessarily translate to at least in the short to medium-term uh the upward movement of the price of Ethereum because a lot of this can be happening on cold stoages.
And I think for a lot of financial institutions, it is likely that they are holding their ETH in cold stoages rather than on exchanges. And because of that and because of that I I I do I do believe that uh at the end of the day it's quite hard to it's going to take some time right you can't just say that oh because there's lesser ETH price will go up or because transactions are going up ETH price will go up ultimately the economics of supply and demand will play out um but yeah ultimately I feel like the supply and demand dynamics will play out but It might take longer than we expect and you don't and just because the transactions go up means that people are paying more with ETH. More ETH is being burnt lower supply doesn't necessarily mean the price will go up because if they are burning the ETH that is already not on the not on the exchanges in the first place it wouldn't really move the price.
So I think this will take some time to play out. And so right now uh the good thing and I say good despite ETH being down 10% in one day uh in this session alone while ETH is down 10%. Uh Bitmine is only down 9.8.
Okay. So ETH is down 10.6. Bit mine is down 9.8. We are still 1% uh above ETH.
That's not the only thing. Yesterday we closed higher than what our bit my move yesterday was actually higher than Ethereum. And what is important is actually over here. If you take a look at this tab, this is the tab that I always like to to show uh in my BitMine videos which you'll be seeing come out this uh that that you'll see come out this this weekend. But basically over here uh what you're actually seeing is that today bit mine is actually at a 1.03 times m that actually means Tom Lee can raise money today. Now then this is where I want to talk about the capital raise using uh using the preferred shares which I think came out when did they come out?
I think I I re what I I I requed this Uh, yes I did. But it's back down to 480 today. Am I right? I believe it's at 480 today.
Okay. So, this is basically my response to Bitmine um using preferred shares.
Bitmine I know and I I I feel like I had to start this post off with this caveat otherwise people will be coming at me in the comments. But I know that Bitmines stakes their Ethereum makes around $300 million a year. Uh and what they plan to do is that they use $30 million of this $300 million to fund these uh dividends of the preferred shares, right? Because they're paying out a $9.5% dividend on the preferred shares of uh $300 million.
So that works out to be around $30 million. This $30 million doesn't come out of their pocket. It comes from staking revenues. So this is very straightforward. Now my problem is that they only have $300 million in staking revenue. Of course, this will go up when the price of Ethereum goes up. But but you also have to remember that at the end of the day, they were supposed to use this to number one buy back shares, number two to continue expanding uh their portfolio. uh if you are you if you were here for a long time you would remember one of the original thesis is for them to invest in different projects within the Ethereum ecosystem that helps to promote the network which is why they invested in beast industries which is why they have invested in a co holdings now from here you you have to understand that there's going to be a balancing act that is required because they're only making $300 million in revenue of course that is relative to the price of Ethereum That also means that you need to allocate some of this $300 million into other projects. Now, I would personally much rather them allocate this into other projects. My concern is that they are going to use this to actually issue more preferred shares, structure this like the micro strategy style, which then I am not too keen on. Now, of course, I understand it works better for Ethereum than for Bitcoin because Bitcoin doesn't generate any revenue.
Ethereum can use this staking revenue to fund that. And all I'm saying is that that I think there needs to be a little bit of a balance over here so that we can actually get the best return for our money. This $300 million uh basically is a little bit of a leeway right now for Tom Lee and the management team at Bitmine to work with to generate shareholder value. So I don't think the best value is being generated when we only go out and buy use preferred shares to buy Ethereum. And plus I also think that personally uh this is an aggressive move because they know they're so close. They're so damn close to the alchemy of 5centent.
So I did the math over here now based on BitMine's last disclosure. Let me just double confirm. I I was I was like tweeting this as I as I was walking. So I I don't know if I remember remember the wrong numbers, but I presume nobody calling me out means I didn't remember the wrong numbers.
Okay.
Oh, I just saw a press release today, 5th of June. Uh, Bitmite announced uh pricing upsized.
All right.
Okay. You can see over here, this is fresh out of the oven. At least for me.
I didn't see it earlier on. Uh, Bitmine today announced the pricing of its upsized offering registered under uh the security securities act basically on 4th June. 3.5 million shares, 9.5% uh series A perpetual stock, right? This reflects an upsizing of the previously announced three million shares. So now it has gone from 3 to 3.5 million shares.
Okay. And uh it's at a price of $80 per share. If someone is willing to do that, I mean it shows that they whoever it is on the other side of this is actually pretty bullish.
Right? I feel at least.
Okay. But I think the important number is over here. If you take a look at this number over here, Bitmine owns around 4.49% of the total ETH outstanding. Um, what is important here, they have around 5,420 E. So 5 5.42.
So if you work backwards I'm not wrong to say that they have let me see.
Okay let me just create a new tab all together E on balance sheet.
Uh let's play this out a couple of different ways. Let me zoom in so you guys can have a look. Let's uh what's the number? I think I updated it here.
Yeah. All right. So, this is the number of E that is on the balance sheet of Bitmine at the moment. Now, at the same time, their cash is 446.
Okay. So, we put the dollar sign on this so it's easy to understand. This is the total.
Now, price of ETH.
Um, I'm just going to use whatever I have in the front here. What's the price of Ethereum? This the Bitmines's average price. I should update that soon once they give us their disclosure price of Ethereum today. Yeah.
Now why is this numbers here important?
Firstly, we need to understand how much Eve needed.
So if you take alchemy of this is 5%.
Their estimation is 120 700 times. I'll be very exact with the numbers over here. They need around 600,000 more Ethereum. Okay, I said 580 this 600,000 numbers are pretty close.
Assume let's assume they are not able to buy the Ethereum today for some reason. Okay? and they only buy it at 1,800.
That means okay assume by ETH at okay I I so I can always change this 1,800.
So we know Bitmine needs over 600,000 more ETH. They assume they buy each of the Eid at 1,800. Although right now they can buy at 1,600. I'm assuming that on average, right, perhaps they don't buy everything now at 1.6. They end up buying some a little bit higher as bit as Ethereum recovers. On average, they make the final 600,000 shares purchased at 1.8 uh,000 or 1.8K or $1,800. Uh, capital needed basically take 1.8 8 * 63,000.
Oops, sorry. I just I remember I need to minus this off.
Uh they need another $1.1 billion. Okay, Bitmine needs $1.1 billion to buy $620 E to reach their alchemy of 5%.
That is what this means over here.
Now, we already know they have $446 million of cash. Okay. So if we say less cash and we take 1.1 billion - 446 million.
This is Bitmine needs to raise $666 million to buy 620k ETH to reach their alchemy of 5%. Now, let me go back and just take a look at.
So, there are a couple of things that are at play over here. Now, this shows you that Bitmine can number one very easily reach their alchemy of 5%. If they wanted to, they have over $700 million to deploy, right? pretty soon.
Now that can actually help them uh completely uh oh not completely nearly close the gap. Now they so preferred stock $300 million.
So still needed after preferred stock. Take this minus the $300 million still.
needs uh 366 million to buy 620k ETH to reach alchemy of 5%.
Now I know today they actually upsize this number but I'm not going to talk about that. Why? Very simple. Now let's see what was the trading volume last week. Last week Bitmine wasn't heavily traded. You can see over here that last week in the past week, Bitmine was the 225th most traded stock in the US. Gone are the days where we trading in the double digits in the top 50, the top 70, even the top 100.
No, we are 225th. Yet we are averaging $628 million per day on a 4day average. So trading volume.
Oh yes definitely Ginger uh they are going to get liquidity from uh the Russell 2K listing as well. Okay. So from here we said 6281 * 5. Why? Because you're assuming a 5day average. So all I am assuming is that Bitmine doesn't get more liquidity right it get it's trading it's going to be traded more or less around the same levels 225th most uh popular stock in the stock market on a 5day average. then that would equal out to around $3.1 billion in stock being traded. Out of this 300 $3.1 billion, Bitmine only needs to issue $366 million worth of stock. Now, this is where it gets interesting.
This is also percentage of trading volume.
So this means number one, Bitmine only needs 11% of a weekly trading traded volume in order to raise sufficient capital for them to get to the alchemy of 5%. That's number one. If you assume that this is too hard to do in one week, then I don't think it is too hard for them to do in two weeks.
Now, like I said, if I go back to my valuation page over Oh, sorry. Sorry, I just realized need to share this. This is where I'm sharing it. Right. You still need three $360 uh million after the price. Sorry, lost my train of thought. You still need $366 million after you le the preferred stock over here. After you account for the cash that they currently have on hand, you still need $336 million. This is what we are seeing over here. Now the weekly trading volume uh what I've done is take take 628 million. I just times five. Okay, this is how we got this number over here $3.1 billion. And if in order for Bitmine to raise $366 million, they will actually they only need to uh issue at around 10% of the overall weekly liquidity, which is well within uh the kind of range that these kind of capital uh these kind of um treasury companies like to issue capital at because if they issue too many shares at one go, uh you you cause a lot of selling pressure and then it's detriment to your own share price and then you don't get to raise capital at that price. Now, here's where it gets interesting. So, like I said, okay, if you think this is too aggressive, then can they use 5% of the weekly volume across the next two weeks to raise enough capital to reach 5%. So, my my hope is that we see Bitmine get to the 5% of Ethereum uh within the next couple of weeks. Uh I I don't know how long will the preferred shares take to go through or have they already gone through? Let me just go and double confirm.
Uh, I don't think it's gone through yet. It tends to offer I mean it's not yet.
Series A preferred stock will accumulate dividends at a fixed rate of 9.5%.
Oh, so they issuing this at $100 per share.
Let me take a look.
H no, I'm just reading the disclosure.
perpetual stock at $80 per share. So what is 350 0 0?
Okay.
No, I'm just the the the wording here is a little bit weird. The series A preferred stock will accumulate. Okay, let me show dividends at a fixed rate of 9.5% perom on the stated amount which is $100 per share of series A preferred stock regardless of whether or not declared or funds are legally available for the payment.
Okay.
Okay. What I don't understand is this line over here. It says they're upsizing this to 3.5 at a public offering price of $80 per share. Isn't that lower than $100? But then they still kept this line over here. The series A preferred stock will accumulate that could possibly make sense as well.
Um, but we explored it in one of my videos previously. I think I let me let me see if I got the link to the video over there. But basically the the conclusion uh if I can find it the the conclusion to that is that the big companies that are available that you would buy or bit it would make sense for Bitmine to buy um they might not want to sell because they do have a substantial amount of Ethereum and they can just hold right they they haven't been buying unlike Bitmine but they could just hold. So that's number one. Uh the second thing is that yeah the second thing uh the sorry uh the the second thing is that uh the smaller companies it doesn't really make sense for for them to go out and buy because it really doesn't make much of a difference. a lot of them have like 5,000 ETH on their balance sheet and things like that.
So I I'm not sure. And then you end up having to divest the rest of their business. So yeah.
Yep. It's just the filing no date for issuance. So it's like a dividend grower starts at 9.5 goes up 5 BP as capping at 15%.
Right.
Right. Okay. Understand. So I mean with that the calculation still stands, right? You assume they raised around $300 million from this uh private preferred stock. They still need 3.6 uh $360 million which can which is basically 11% of one week's trading volume or 5 and a half% of two weeks trading volume. Extremely extremely doable. Now why is this important?
Because when you take the average price of Bitmine right now, $15, let's assume the worst case. Okay, worst case, I would say that Bitmine can get to 12 and let's say they raise at 12.
Okay, this is the BitMine shares needed 366. Let's say they are slow. They didn't do anything these few days. they would need to issue just another 3 million shares. I think this is extremely extremely doable if you ask me.
I think this is extremely doable. Oh, sorry 30 million shares.
So why is this from here current shares outstanding?
The current shares outstanding is 580.
Let me just times my 1 million.
This is the current number of shares outstanding after their raised uh earlier this week on the 1st of June.
You add these two numbers of of shares together. Final shares outstanding 611 million shares. And how much dilution is that?
If I count the dilution, you're going to see in a minute what I mean in terms of fair value of bit. So I am assuming a couple of things here to be extremely conservative.
After we raise $366 million, we do not raise it today. We did not raise it across the last couple of days when we we are trading above a one times MNF.
Let me be very clear. Even at $1588, we are still trading at a 1.02 times MNF which is above a one times MNF.
and be solely because of the market net asset value being above one to me the thesis is still not broken because if they are like some of the other companies 76.5 times below MDF I do not have the confidence that when Ethereum recovers your multiple will recover as as fast of a pace as what Ethereum is doing but here since we are tracking Ethereum one to one even though we are we have fallen to these levels.
This tells me that if we think Ethereum can get from 1,500 back to 4500, there's at least a 3x on the cards for Bitmine from this level. Okay, I'm not saying from whatever cost basis you have from this level, which means we can very easily get to what what's 16 * 3? 48, right? Uh so $48. I think that is the distinct possibility. Now, the calculations I just did, okay, just let's just call this PS for now. The calculation I just did showed you that this is actually extremely possible. Why? Now do you remember in the calculation over here I' I've said that the I've said that the dilution from the preferred stock if we do not if we do not issue shares today above one times MF if we did not issue shares on Monday because Monday we were also above one times MF we completely miss the window over here and we raise when it falls to $12. Okay, let's say Tom Dup and Tom Lee really suck at uh technical analysis. Okay, they raise at $12 means we dilute more than we need to because just to let you know if we raise at $15, right? We only need to issue 24 million shares. But let's not do that.
Let's do $12 to be a bit more conservative.
Means by the time Bitmine reach 611 million shares, our dilution will only be 5%. This is important for the fair value because over here my bare case is 40%.
Just to give you a understanding 40% dilution means that I am assuming Bitmine to end up with 813 million shares. In my base case with 35% dilution I am expecting Bitmine to end up with 784 million shares. And even in my bull case over here with 30% dilution, I am expecting Bitmine to basically end up with 750 million shares. But with the preferred stock that were just issued, okay, or at least just announced hopefully going to be issued soon plus them being able to raise capital opportunistically like this week, Monday, and today. Right. Since the start market open, I've tracked Ethereum's price has gone below 1,600, below 1,700, and yet we are still trading above a one times NF. Thesis is intact. Tom Lee is annoying because he keeps uh calling out these outlandish targets, but the thesis is still intact.
Transactions happen on the Ethereum network. Doesn't necessarily have to drive up price because all it does is that it reduces supply. It's over time that the reduced supply will cause an increase in price when the demand comes on. Demand is still not coming on yet.
Right? I believe a lot of these financial institutions are holding and hoarding the Ethereum through co-wallets which is why we are seeing the supply of Ethereum drop but the price not responding and eventually those that are slow to the game will have to end up buying the limited supply of EE that are on the exchanges and that is when the price of Ethereum go up.
Nothing to do with the gas fees and the transactions. If the people that are holding ETH right now are the ones that are paying for the transactions, assuming some of these big financial institutions are the ones doing so, then I think uh the ETH price can still stay low for a longer period of time. But if we start to see the tokenization movement start to take shape uh in other different industries uh beyond uh beyond just financial services uh that we really start to go out to tokenize every single stock in the stock market and things like that. In that scenario then I think yes we are still going to start to see the price of Ethereum move. Okay.
So going back to this why is this bullish for me? Now my assumption is that they are going to issue another 30 million shares which means my bare case should only be around maybe 20%.
Okay let's be a little bit more bearish 25%. I can do 20% here and 15% here. And I think this which means that if Bitmine issue shares below $12, then that's the only case that we have a problem. That actually drives up the price target of Bitmine. Now, when this price target that you're seeing here, initially it was $32. Let me just go back and show you. Initially before I changed everything it was around $32.
This gives an additional 10 12% uh to the fair value of Bitmine. Okay. This gives an additional uh let's say call yeah $4. So let's call it around 12% to the value of Bitmine. Why is this important right now? That means all I need is for Ethereum to reach $3,000 for the fair value of Bitmine to be worth $36.15.
Now, if Bitmine continues to trade at one times MNF, which it has been doing so when Ethereum is going down, it is safe to assume that it will continue to do so when Ethereum is going back up.
They don't need to trade at any multiple just one times MNF or 1.1 times sorry if you want to use one times also can but let's just use one point the average over here average is around 1.1 times MF base case you end up with $36 which I think even more people would break even by Uh I'm not sure. Why do you think the clarity act will not be passed this year?
Pass the banking senate committee.
Uh, let me see.
Yeah. So, now we're just waiting on the Senate vote. It should happen, I believe, in June.
Middle of June. I I can't remember which video it was, but yeah, I I I saw in all my research that the the vote was probably going to be in middle of June, early July, uh passes the Senate, gets to the president July, August, and then that's when it should be in. So, I I am actually hoping that we do see it come to pass in 2026.
But basically right now with these assumptions uh it tells me that the fair value of Bitmine as long as we keep trading at a one times MNF once Ethereum recovers to 3,000. Again I don't need alltime highs. I just need Ethereum to recover to 3,000 we are at $36. If Bitmine continues to trade at onetimes MF and if they issue shares way below how much below? Let me just give you a example over here. If I take this minus okay let me just show you how much below they would have to raise assuming Bitmine issued shares 145 million. So, if I go back to my earlier example, my assumption is that Bitmine uh only issued 30 million shares at $12. Right now, in my bare case, I'm assuming that they raise that they issue 145 million shares.
So, in order for 336 million, let me divide this by a million. So, Okay, correct. The math is correct.
In the bare case, Tom Lee and team would have to issue 145 million shares when Bitmine is $2.50 in order for the bare case to play out.
Now there will come a time where I feel like you know perhaps the entire thesis is wrong or or the price action itself technically is too weak. There might come a point in time $2 that and that point in time will actually come before $2.50 at least for me. Okay, at least for me at that point in time I'm going to take the loss because it would need a 10x just to get back to where we are trading. But it is unlikely because for Bitmine to be at these prices, ETH needs to be sub 1,000 and severely sub 1,000.
Okay. Now, let me do it for our base case. In our base case, ETH will sorry, Bitmine will need to issue 11 16.
Yes, correct. 116 million shares and that means they would need to issue shares at $316.
Again, I think we can assume we can say that that is pretty ridiculous. Over here in the bull case, they would they would actually have to issue 87 million shares, which means issuing shares at $4.20. Now personally I think this is already a very conservative assumption.
So I think right now it is fair to say that if you are buying Bitmine at $1516 there is at least a double from here if you believe Ethereum can get back to where it was.
Let me see where it was on January 29th, 2026.
If you think Ethereum can get back to where it was on January 29th, 2026, which is basically the 382 fib, which of I think now it has been broken. the fib retracement. I have to redraw it.
But if you think we can get back to those levels, then I think we are good.
We don't need a huge recovery. We just need $3,000. Go back to, you know, the pricing four months ago. If we get back to last week's pricing of 2400, the fair value should be around $30 based on the amount of if that they have if they still are trading at, you know, a one one times MF.
if we get back to last week's pricing.
So, I think the it has gotten to a point where I think the the stock now is a little bit too cheap.
Uh I thought of selling because of opportunity cost, but I but looking at it, I can't I can't bring myself to say what's wrong with the thesis other than the price action.
And if I'm being disciplined about how I approach this, I shouldn't sell if the thesis isn't broken. That's number one.
Now, I have learned also one point is that there is there is a point in time where the thesis also includes technicals. But I don't think we are at the point where I can say that the technicals have severely broken down because right now uh with my I just bought ETH again. So now my I just bought sorry Bitmine again.
My average cost of Bitmine without without considering the premium is around $36.
With the premiums now it's at 3132.
So if I ask myself can can I see Bitmine doubling from here in the next four to five years? I I can I don't need the money in the next four to five years. So I got four to five years to wait for it to double to get back. Okay. Uh is there going to be opportunity cost? likely if it's if it's taking four to five years.
But is there a world where Ethereum gets back to all-time highs, close to all time highs? Definitely. And if Bitmine is still trading at a one times MNF, this could be $50.
Oh, sorry. Alltime high is not 4,500.
It's $4,900.
This could be $54.
So, the upside for me is from $36 plus my premium uh $24 30.
What's 24 out of 30? It's around 80%.
Upside for me, plus whatever premiums I collect along the way. And like I said, my strategy now is that I am literally daring the market to go up. I am selling extremely aggressive covered calls. Um 30 to 40 times the 30 to around 30 deltas or.3 deltas.
so that you know I can generate extremely high premiums every two weeks.
My goal previously was to generate around $1,000 of premiums from uh Bitmine every 40 days or so. Right now I'm generating $1,300 worth of premiums every two weeks at the at the deltas that I'm selling at. And it is aggressive and there is a chance that my BitMine shares could come under pressure. But if you think about the psychology of this whole thing, isn't that what I want right now? Would do I want my $1,000 in premiums or do I want Bit Mine at $20? I want Bitm at $20 any single day of the week. And I would rather deal with deal with the cover call.
So for me, I don't think it's a problem.
I'm just selling aggressive cover calls.
If they get caught away, I'm not going to be so married to this stock that I would 100% defend it. I'll just turn around, sell cash puts, and get back in again because it has proven to be so volatile.
Exactly right. I mean, it's not it's not even AI plays at the moment. Nothing is doing I mean, today the S&P is down 1.38%.
Let me just share my screen for you. You can see over here the S&P is down 1.38%.
Let me see if I can What is the Oh, sorry. I need to do something. I I I'm testing something out. You guys can tell me how good this is.
Uh because I have uploaded my old journal entries into C.
when it comes to uh I I've given quite a full like breakdown of how I've done earnings review and all that and I'm trying to let it do Broadcom's review because I've already read through Broadcom's earnings and I want to see how accurate it is. I'll show you guys in a bit. It is. I let coowork do it and I didn't realize it was asking me a question. So, it's not done yet. I was supposed to do it, but anyway, it's running in the background now. Uh, I'll show it to you guys later. We Let's see how accurate Claude is. It has gotten around two years worth of data on Broadcom. I never thought I'll be able to buy Brocom at uh uh at I would say I I wouldn't say sub 400 is I wouldn't I don't think I didn't think that the the crash would be so bad. I would say that I don't think the crash would be so bad. I find it hard to say that I don't think I'll buy Brocom at these prices. I think if we get to mid 300s and below then I would say oh I don't think I'll get I would didn't think that I would get a chance to buy Brockcom at these prices. If we get to 350 to me for the long-term thesis of the company definitely a pretty good entry point.
Will I be opposed to dollar cost averaging now? Uh definitely not. Right.
So actually if you're in the AI place, you are not safe as well. You can see the AI plays are all down. There's nothing red. There's nothing green.
Barely anything green today. Let's see what's green. Uh did you all see Victoria Secret was up over 40% one day.
Okay. So the VIX is green. You have Proctor and Gamble. So you can see it's really a move to uh defenses and I think this is largely because of the job numbers that we got earlier. I believe we got 172,000. Am I right? the job numbers and that means that chances of rate cuts much lower and we can see the two-year rise by around 2%. What is the 10 year?
Two years is at 1 4.1%. What is the 10 year?
The 10 year is at 4.5%. Again you see we are not breaking that uptrend which is not good. That is not what we want to see. Uh this is in an uptrend.
I think we need to break it and we need we need this to come down. But with the war still going on, I don't think this is coming down anytime soon. Uh from the start of the year, at the start of the year when when when people were asking me, I wasn't super confident on Singapore stocks for the very simple reason that Singapore companies have been running in the past year. I don't usually like to buy things uh that have huge momentum. Unless I'm already in, then I will buy into strength. But to start a completely new position uh at these levels, it kind of scared me.
But with the way the war is going in the Middle East, I can see it. And I mean, I'm seeing more and more people move their capital, especially with the latest news around China. With the latest news around China, trying to uh ban some people's accounts. So, China has been banning accounts of uh Chinese nationals that are overseas. So, if they use mumu and things like that, uh their account gets banned. A lot of these people are trying to move their money over to Singapore, right? So, we are seeing an inflow of capital in Singapore thankfully. Uh, and I think it's going to sustain Singapore's rally for a little bit longer. It will it will not be as violent as what we saw it in the last 18 months, but I think it can continue to slowly trend higher because I I'm not sure how how does inflation in the US come down. Everybody says AI is going to make it deflationary. But before AI makes it deflationary, inflation is going to happen first.
AI will make it deflationary in the long run. But in the next one year to two years, I'm I'm not really sure.
Hey Kendall, thanks uh for being here.
I have always heard about Okay, E.L.F.
is definitely E.L.F. is one of those makeup companies that I think you know I I do follow them uh every now and then but I am not really in the makeup space if I want safety uh I usually usually uh yeah I I don't hide out in the makeup makeup space to be very off uh to be very honest but I think for ELF uh their business should be pretty safe right what I like actually is Celsius I don't follow it very closely I know it was very hyped on X very hyped on YouTube. A lot of the popular uh finance YouTubers tend to follow it.
But my problem is that we don't have Celsius here in Singapore. Now, I've just been told previously uh I think a couple of streams ago that I can buy Celsius through Shopee.
So, firstly, I might have to do that, but secondly, it becomes hard for me to invest in this company because I I I can't see it growing here in Singapore.
I can't see the growth for myself. So it becomes hot.
Yeah.
And just by the way, I just noticed the price. Bit mine is at $15.90, down 11% on the day. And we are still above a one times MNF. Just want to make that very clear. But for me, uh if I'm going defensive, uh I would actually go more towards SD Lauder because uh okay, I don't know how I because I feel like they have they are the more established brand.
But I don't really go into makeups whenever I'm looking for defensives.
Yeah. Actually, to be very honest, if I'm going into defensive, usually I'm I'm just all cash. I I don't really like move into the defensive sector like McDonald's and Pepsico and things like that, which is what what everything that is up today. Waste management up 7%, Proctor and Gamble up 3%.
Costco up one, Monster Beverage up one, McDonald's up 2%, uh, yeah, and Pepsi up 1%.
So, you can see the trend. Companies that are up today uh, are really the defensive plays, but I my style is that I I don't really do the defensive plays.
Okay, you can see a lot of the smaller companies are down big. Nphase down 14%. Uh, this is no surprise. I mean, they kind of hit the 50% over here at 75. I hope my friend goten out. I just remembered I told him to watch 7375 and to trim around that area. I better check in on him tomorrow. Uh, BTBT, I mean, no surprise. Uh, this is one of those names that hold Ethereum if I'm not wrong and we were looking at them previously, right? Down 12 13% on the day. Cipher Digital down 13% on the day. I ran down 13% of the day. The interesting thing over here is that Iran is still in an uptrend. If you take a look, you can see higher highs. If we bounce back off on Monday, this is going to be the next higher low.
Like I said, Iran really hasn't been my favorite Neocloud. It was just the one that the valuation made the most sense to me at that point in time and I would really like the opportunity to buy Nebus or even core even over irrand.
It's just that at that point in time valuation wise corweave was in the 150s and you know Nebas was doing what Nebus does which is how I ended up in Iran. But right now, uh, if we can get to August and we do get a dip opportunity, you know, I wouldn't be opposed, uh, switching Iran into Nebas or Corv, but I'm not buying Nebas at these prices.
Whatever you see this 11% drop, this is ridiculous. Okay, this 11% drop is nothing in the greater scheme of whatever that is happening.
and then this will come down. Yes. Uh talking about this, have you ever heard of people saying uh IPOs will actually lead to people leaving the speculative markets? That is you kind of read my mind because that is exactly what I want to share over here.
Where is it?
the aerial vice chairman Charlie Brenvoy. Uh Charlie, what do you make of the the current situation? I I know that you have been studying kind of this crowding out idea. You say that for the first time this century, we're entering a period of crowding out where capital becomes scarce and there is not enough risk capital to fund all projects. Uh how should we be thinking about that as it pertains to the markets right now?
>> Yeah, that's exactly what I see happening. I see people um selling stocks in order to make room to buy the new hot sexy IPOs. That's dangerous. I'm seeing in leverage lending in particular crowding out in which um there was lots of new money raised in private credit.
The banks said fine, if you want to take those risks, we'll let you have it. a lot of money went in there chasing yield and and chasing yield is has killed more people than than many diseases. And so we're seeing that right now nervous. I'm hearing people say, "I have to buy this IPO because it's going to be such a big part of the of the index. I have to own this stock because if I don't, I'm going to underperform." That's the kind of talk that has almost always led to trouble and it's frankly a lot worse today than it was even two or three months ago.
>> Yeah, there's that's a lot of >> All right. And I mean that's that particular segment over there. exactly what Kunal was bringing up. I personally wouldn't be investing in any of these IPOs.
I I think they are extremely extremely overpriced. Uh I think we are likely seeing some of their valuations going to be cut and that's when you know a lot of the cost cutting in some of these companies will actually happen and I I do believe that token price token usage will continue to go up. Token prices will start to come down.
And so I think larger scheme if you zoom out I think the AI trade is definitely still in play. It's going to be in play for much longer especially with the $80 billion that Google uh raised through their share issuance. I do not believe that Google is a company that will issue shares to dilute their shareholders if they believe that the AI trade is going to be done soon.
Of course, I think that at $350, uh, close to $400, sorry, close to $400, they were definitely overvalued, uh, because they were pricing in a lot of future growth. But right now, uh, since then, uh, it has come down quite a bit.
It's not yet at a price where I would say I'm happy to to buy. I think I trimmed at around 340 most of my Google.
Uh, yeah. So, it will have to be a bigger discount for me to be interested.
Right now, if you're asking me which companies interest me, uh, Microsoft, if we can get a bounce off the 50-day over here, I'm trying not I'm I'm trying to be a lot more disciplined in in the last couple of years not to buy stocks in no man's land like over here. I like to buy when uh support has been found. So, for Microsoft, uh, if we see a rebound, that could be a higher high, but I prefer it around the 50-day moving average. for Meta. Um Meta is showing signs of trying to break past the the 50-day but again uh doesn't have didn't have any success yesterday. Right now we're seeing it break down below again. Could we retest 600 possibly right below that? I don't know. But 600 has been a level that we have held at for uh yeah for for quite a while. Uh since when was this end of April right? So for the entire month of May uh May we were around uh $600 didn't move much. Tesla again coming down testing the 50-day. Uh we are seeing this slowly start to inflct up but you can see momentum on the MACD is coming down. Uh this uh this is not rumors uh Kunal this is true. A lot of the Ethereum Foundation people have left and some of them have been pretty forth uh forthcoming about it. is that it is due to internal politics and I think it happens at every company. Um it is definitely one of the reasons why I really have my I'm really keeping an eye out for uh the developments over there.
Uh and that is also one of the reasons why I'm just not sure. I think the the asset itself long-term not a problem.
But when I invest a large part of it has to do with management. I don't it's going to be a bit hard for me to ac assess the new management team in Ethereum in the Ethereum Foundation.
Number one. Number two, we shouldn't really be talking about them for as the management team of Ethereum. Uh it is Yeah. So by right in the first place, the Ethereum Foundation's influence over Ethereum should be getting smaller with time. they are just using this disagreements that they're having as an opportunity to accelerate that process of uh reducing the the responsibility or the the impact that Ethereum Foundation has on Ethereum. Uh so those although it is in the long-term plan that does not mean that that is why there were a lot of departures uh in the last couple of months. There has been definitely a disagreement. I covered that in previous previous streams as well. So, uh, yeah, I I'm not too This is one of those things where what were the technicals that they were arguing about when it comes to crypto. There's a little bit of philosophy as well as fundamentals.
And I feel like it is not the fundamentals that they disagreed on. I think they disagreed more on the philosophy of Ethereum. But we know in terms of Vitalik's uh, Vitalic Buterine's u philosophy of Ethereum, he wants it to be decentralized. He wants it to be uh available to everybody but at the same time uh he wants to bring back economic value to the layer one and I think that is something everybody can get behind. So from that perspective not too worried but makes me reconsider whether or not I want to hold something uh with uh yeah it just makes me consider yeah I don't know something just doesn't feel too right for me about it. I can't put my finger on it.
Yep, I agree. I feel completely comfortable with my BMR position because I just received, like I said, 1.3K or $1,300 in in premiums yesterday uh to sell Bitmine at $20. So seeing it fall to 1580 today, not a problem to me.
$20 Zeta covered calls. You see the thing about this market condition is that you might get a chance to just sell cash puts at $20.
Let talking about Broadcom. Let's see.
Okay, so this is my first test of uh Claude doing this for me because in the past I used to have to do this myself. If it works in future, I'll just run this every time they have earnings.
So I I'll have the I'll have the quick version of it and then uh I'll do my own breakdown later on. Okay. Okay. So, let's take a look. Uh, all right. So, it's okay. This part I actually added in my earnings don't usually cover the mechanism of the company, but because I've never spoken about Brocom on stream before, so I thought it's important that, uh, I cover that. So, this section uh, like it says over here, I think I need to zoom this in.
All right. The reason why this is in this format is that because sometimes I send this to uh to to my friends to test the formatting uh in future. I know some people I will be sending this out uh for for for people to read in future right once I've uh tightened some of the processes and make sure clot doesn't make that many mistakes and they really understand how I want to present this. So this is a live test. Let's take a look uh how how Broadcom actually makes money. So uh it has two businesses bottled together on one balance sheet.
Okay, they have semiconductor solutions.
This is 68% of the revenue this quarter.
Designs chips and manufactured by outside foundaries and the smaller one infrastructure software and okay mission critical enterprise software dominated by VMware sold as a subscription annot.
I believe their annual uh recurring revenue uh is up 17% year-over-year but the VMware segment of the business actually missed expectations. Uh overall they also uh miss the upper end of their guidance which means it not not they miss their revenue they miss like people expect them to guide a little bit higher but they guide more towards the midpoint. I think that's that that's what caused the crash if I'm not mistaken.
So it does not sell a general purpose AI chip off the shelf the way that Nvidia sells a GPU. It co-designs a custom accelerator. And so this custom accelerator Brockcom calls it an XPU with a single hyperskll customer tuned to that customer specific workloads.
Right? So uh Google's TPUs they are the most uh famous example as well as meta as well. So the the customer themselves own the architecture, own the software stack and Broadcom basically just supplies the the engineering right that turns that entire architecture into a a manufacturable chip. So they do their business slightly differently from Nvidia, but that is where they differentiate themselves. They are not something that you need to get off the shelf, right? So so that means a lot of these hyperscalers want to work with them especially if they want the most cost effective way of doing it.
So over here right exactly as what I've just said the performance per watt cost uh a chip built for one workload at the volume of a hyperscaler runs can beat a general purpose GPUs uh on the two numbers that dominate a data centers economics power and total cost of ownership. So this is exactly what I say because of the lowering cost I think brokcom in future is going to have an advantage over some of its competitors.
Am I saying it's going to beat Nvidia?
No, I'm not saying that Nvidia is still going to be the king of the semiconductor space for the foreseeable future. But if you are talking about lowering cost about a lot of these uh enterprise companies coming in designing their own chips, then Broadcom has a role to play in this semiconductor market. Okay. Then of course the AI networking this is the second part of the company's mode. Uh let me see over here. Okay. Okay, so networking was almost 40% of its AI revenue this quarter. So they need to be able to scale up uh the chips wreck and scale out. Okay, so I'll leave this for the actual video itself. But let's take a look at the actual narrative. So you understand Broadcom's business, right?
They broadly have two segments and they do not, you know, manufacture their own chips to sell. You come to them and then they give you the engineering to help manufacture the chips, put it in a way that you can then fabricate your own your own chips. And so that is what uh Google has been doing. So uh Broadcom over here.
Love cyber security names. Would love to buy Rubric at 48. Uh if you have followed the previous account um I actually wanted to buy rubric at around 48 to 50 55 between that $7 range but my cash was all locked up in cash puts. So because the cash was locked up in cash puts unfortunately I missed it and then it went all the way up to uh 80 over dollars.
But I I like Rubik especially in uh a aentic AI world. Uh I like their agentic version of the software. It's not it's not going it's currently not a big revenue driver for the company but in future I think this is extremely important. Uh right now I see Rubik bouncing off the 50-day moving average.
You know I personally waiting for a little bit more confirmation. If we get a bounce off the 200 day which is and I I I might consider opening a position at around 67 and yes Lawrence uh recession does bring down inflation. Okay, so let's take a look at the actual quarter. Broadcom printed record quarter stock fell 12.6% uh in the next session which is true. Uh that was a few days ago revenue $22 billion 48% growth year-over-year came in above their own guidance. Fantastic.
um non-GAAP operating margins record 67.3% IITA 96% and free cash flow of $10.2 $2 billion and yet the stock is down. I saw nearly what 15 16% on the day that was crazy at one point even the forward setup strengthen management raised Q3 bar to 29.
Okay, got no problem. Okay, the inflection that could the stock was not the quarter was one thing management did not do. CEO Hawkan reiterated that rather that rather than raise in excess of hundred billion dollars. Oh, okay.
All right. So, the CEO reiterated rather than raise the in excess of a hundred billion uh financial year 2025 AI target.
This is such a small thing to bring the stock down over 15 billion uh 15% over.
But yeah, multiple wise still rich but already pretty good.
I think I don't know.
Would I rather just double down in my Nvidia since I already have the leaps?
What's Nvidia trading at today?
So you can see the AI semi-revenue over here. Oh, this has been growing pretty.
4.4 billion to 8.4 to 10.8. Uh, this is really strong growth. Then we're getting 16 billion next quarter.
12 quarter revenue trajectory from $9 billion all the way up to 22. So they doubled their they more than doubled their revenue uh in the last three years. This is actually pretty good. I personally haven't like looked super deeply into Broadcom.
So, this is to me also one of the first times I'm looking so deeply into this company.
Have I bought SoFi Leaps for June 2028?
No, I have not. And thankfully, I have not because today gives me a good time uh a good opportunity to take a look at that. I'll take a look at at that right at the end before I end the stream. Uh right now, let me just take a look through the profitability over here. So, non-GAAP operating income.
All right, we are at 14.9 call it $15 billion. Even the quarter over quarter, this is actually very impressive. No, this is still what the 25% quarter overquarter growth. That is still pretty impressive.
uh adjusted IBIDA margin 69%. Yeah, it is a rich company but it is a rich company for a purpose. It has a very uh sustainable moat in the AI space. Like who else are are these other companies going to go to right that can give the same kind of quality.
So diluted EPS $1.90. So I think everything was pretty good for for them. The the real thing for Broadcom is their is their guidance. They guided for they reiterated hundred billion in AI revenue instead of raising it. But in excess of hundred billion dollars can be so many things.
Unless I mean he could have come out to say in excess of $105 billion maybe the street would wouldn't have punished them that much.
All right. So they beat on EPS balance sheet cash and equivalents uh $19.6 $6 billion.
Total debt, $64 billion. Net debt 45 43.
Okay.
Good intangible. Okay. VMware acquisition. This is perfectly fine.
Okay, this is where I like what CL is doing. Uh I will have to take a deeper look at this, but it knows things that I look out for and then it flags them. Now I have to go and double check whether or not this is actually a mistake, but material event flag working capital build inventory rows $4.3 billion and days of inventory on hand jump from 86 to 61 in Q1.
Management frame it as securing supply ahead of guided H2 AI RAM. So it's confidence. Okay. So what I love about C is that because it has seen me done that before like when this this framework over here is how I looked at NFACE previously before I decided they had a problem. So right now what they're telling me is manage yes inventory is building up. Uh the days of inventory jumped to 86 from 68. But it is because they gave the rationale management guided uh that they are securing supply ahead of guided H2 AI ram and it shows confidence but it is still something to watch because it is a deteriorating key metric that we are looking at. So Claude is telling me watch for Q3, Q4.
And this is why I love uh working with co-work.
I did not buy puts, but I sold a lot of covered calls at 19, 20, and 21. So my entire 15,000 share position of so far is entirely covered. So I feel pretty okay.
Okay. Uh let's go to the last thing then I'll answer Brian. I'll answer Brian's question on Sofi Leaps. Uh cash flow cash flow from operations. uh $10.4 billion fantastic free cash flow $10.2 billion.
They're extremely extremely uh efficient in managing their cash flow. So you can see capex spend uh barely barely anything and SBC has a percentage of revenue that has gone down to just 9%. So again working capital cycle that has increased but not a problem because Brockcom gave account for this deterioration. So for us as investors, we just need to know, pay attention and then just look out for it in Q3 and Q4. So I'm not going to go through everything over here. Uh the mode custom uh silicon improving everything is improving. Okay, customer concentration of course it stays watch this is natural uh because you know customer concentration with what Brocom does is natural sometimes you have to understand that it is part of the business uh demand pull forward days of inventory. Okay, so this is the one where caught flag but they did say okay in that in that book in that segment earlier that this is not a real danger management has already guided that they are just securing supply in advance. So mechanically we have to change this to a watch for now but we know at the back of our heads that this is not a big deal and Claude has already said that and identified it right so because this is again how how I usually look at companies this is how it's managed to do that as well valuation okay so forward multiple rerates on any guy that barely meets uh and this is exactly what we're seeing right the forward valuation basically coming down so I mean, all in all, strong quarter. I will go through this and then we'll see whether or not uh I will turn this into something uh more tangible. I I like Broadcom uh by and large. I didn't get to buy it. Uh last year was a little bit more tight on capital. I'm having an injection of capital in the next couple of I think in the next two three weeks.
So hopefully by then markets are at better prices. Now, one question I want to answer before I bring this to an end.
Uh, okay. I'll answer both Brian and just the quick above over here. What are my thoughts? My thoughts is that I would rather allocate fresh funds than to move because uh the last thing you want if uh is for SoFi to just move from $15 to $40 in the next couple of months.
I think one of the things you have to realize is that SoFi moved from $8.90 to $32 in just uh over a span of eight months.
So anything can happen, right? Uh it could be because I have been investing for a very long time. I feel a lot more comfortable uh holding companies after they're down 50% from the highs.
But you see the the thing is I I I have a list of companies that I really like.
Number one on top of the list is actually Rubric. Uh number two, okay, number one to be fair is actually Robin Hood, but I already have SoFi. So uh a lot of SoFi. So the next company kind of like got promoted and that is actually Rubric and I think Rubric is a a good company for my portfolio because I think in the long run I do believe in the AI space and one way to play the AI space rather than the hardware which I sold out too early obviously um is actually in the software space and I think uh cyber security is something that is severely severely underlooked. Cyber security is also one of those spaces in the AI ecosystem that is not going to be VIP coded because you're not going to trust a small team within your own organization to code your entire enterprise software.
There's too much risk of data leaks and hacks and all that to to save that kind of money. And I think what Rubric does uh the way that they approach cyber security for me is the way that I think is more relevant uh in the in the AI age because what they do if uh for those of you who are perhaps newer to this company what they do um is that they assume that the that the system will already be breached or have already been breached and then that is their starting point. They try to have a gap between the attackers or the main system and the actual backup because what the attackers usually try to do is to go and corrupt the backup so that you cannot restore the system then they can hold you at ransom right when they whenever they install any kind of ransomware. What Rubik hopes to do is to create a kind of logic gap between uh the actual system and the backup itself.
And while that works for ransomware, they have improved that product to uh to be suited in an agentic AI era and I've given these examples uh at least twice now on stream I believe that if you read the article about the Hertz employee accidentally using the AI or giving AI instruction that led to the AI deleting a bunch of around 3,000 client information and they had to manually source everything back out. rubric helps to prevent that because you can just restore your data based on the last uh saved uh condition. Right? So in the world of agentic AI, rubric is not waiting for the AI to make a mistake.
They are not trying to prevent the AI from making a mistake. They're already assuming the AI is going to make a mistake and they're preparing for that eventuality. And I think that that is what makes their company or their value proposition a little bit different.
There's literally no reason to be buying Broadcom when Nvidia exists. And I mean, to a certain extent, I do have to agree with you. I mean, Nvidia is at relatively uh attractive valuations right now at 208, right? Uh it's very much close to the 50-day moving average.
Um I I wouldn't be surprised to see them base around this area for a while.
That's what it tends to do. It base around the 50-day moving average and then it has a huge move up and then it base around the 50-day moving average and then it has a huge move up. So, I mean, let's see.
uh this is how Nvidia tends to move. Um I would say that perhaps for the rest of this quarter, we're going to be basing around the 210 to 220 range and then uh let's see where we go from there. Now, personally, I wouldn't mind adding another leap on Nvidia. Let's see what's my Yeah, it's now at 7965. I got my leap at around $60. So, we are still in the green definitely, but uh we're only up by around 20 20 30 30% right now, right? We're only up by around 30% right now. So, I have no problems with that.
But I might be looking to add Nvidia more than Broadcom.
Uh yes, definitely. I think seven to eight times I it's it's still palatable but now at 70 over dollars I I really don't think so. I'm quite they they released their earnings yesterday. I I haven't got gotten a chance to look at it. I've been a little bit busy but but from what I see they're doing quite okay and from the stock price reaction I mean you know they didn't crash like Crowd Strike. They didn't crash like uh Zcaler. So it must be pretty decent.
And I don't think I don't I don't consider today 5% move down a crash by the way because you go and take a look at the entire sector. Everything else is down as well.
So this is just a normal move to me.
Well, I technically I'm a financial adviser as well, although I don't really do much of that anymore. Uh, most mo most of my Yeah, most of my friends or clients who wants safety are all in healthcare.
So everybody thinks yeah in healthcare a little bit of bonds no ons I'm not I I I think I think sometimes it's about framing it's really about framing I think for people who invest in index only they may feel like hey why why do you get so safe but right at the start for those that I know especially the older ones uh who are very scared I move them all into healthcare bonds. They're not up as much as the market. Definitely they're not up as uh at the same level as this mumu portfolio, but they're happy because at at comes to a certain point of a certain level of wealth where your concern is capital preservation, not capital growth.
So they don't care. They really don't care. They're just happy that UNH is, you know, up from 300 to 390. That's all. It's not even a whole big part of their portfolio, but it is a hedge and they feel good and that's about it.
Uh yes, definitely Nvidia feels slow compared to the rest. So, one of the things that uh I want to talk about uh is around SoFi. Now, I definitely think that buying leaps on SoFi uh is a good idea for my portfolio. I'm not too sure about everybody's individual situation.
You guys have to do what is best for yourself. But for me, I think it makes sense because I have capital constraint even if new capital comes in in the next two to three weeks. Uh it's only going to be uh yeah it's not going to be that substantial or some uh close to what Tavis spent on buying his his SoFi leaps. Let's just say it's around there. Okay. Close to what Tavis spent on his sofi leaps. So with that I am not going to put everything into the market definitely because I'm keeping some cash on hand for other things but I might be able to allocate some into sofi leaves. Now this is where it is important one of the things you have to understand when you are buying uh when you are buying leaps is that you don't just have to look at the price you have to look at the implied volatility.
Now over here it does show that Sofi's implied volatility is actually lower than the historical volatility. So that is actually pretty good. Not much lower but lower. And that is when you want to be buying leaps, right? So for me, like I said uh in the previous stream, $18 leaps. That would be my call. And you can see them over here. Uh I actually wouldn't be opposed to getting into some $18 leaps at 650. And that's dollar cost average from there.
And so I strongly advise that you understand how LEAPS work. Please do not misunderstand that LEAPS work according to price.
I bought my Nvidia LEAP at a at when Nvidia was trading at 170. I bought it at $180 strike. Now since then, Nvidia went all the way up to 236. And even in the last couple of days when it went up went back up to 220s uh this lead was worth around $96 yet right now is at 207 and if it continues to base uh I will keep losing theta over the next couple of weeks but I am okay with that risk because I believe the next earnings they're going to completely knock it out of the park and then that's when I may consider cutting the position because for me this Nvidia position I have all the way up to 2028 I'm in no hurry. But I know for myself I will trim if Nvidia reach 250.
So I'm just trying to be disciplined over there.
And if Nvidia does get to 300, fantastic. But to me, I've already made the gains that I want to make. I will not be greedy for for the extra $50 because I would rather deploy the capital somewhere else uh in this in this smaller portfolio. But for me, if you're asking me about SoFi, let's take a look at the options profit calculator that we were looking at previously.
Because just a couple of days ago, uh, so far $18 calls were trading at around $8. So now at $16, the returns should be better.
Okay, let me just share my screen over here.
No, that's the thing. You see, Lawrence, he doesn't want he just wants to maintain his capital. I mean, this guy is like practically uh retired. And I did tell him that with bonds if you get inflation okay at the point of time there was no inflation but I did tell him the risk for bonds is that if okay I didn't know about the war definitely but I was at that point of time we were uncertain about the tariff outcome uh and I said that if tariffs come back in another form there's another wave of inflation these will get hurt but he's perfectly fine because of the income that he's receiving he doesn't really care.
So I I think it depends on on on age, right? I I guess if you're a guy in in your late 50s, I don't think you want to be in ons, but he's happy with United Health.
I insisted on the healthcare companies.
Do I think Sofa gets into the S&P 500 this year? Uh you asking my heart or my head?
We were just talking about this previously. at 1850. That is the threshold that they need because they need $23 billion in market cap. That's around $1850. Couple of weeks ago after Anthony Nodo's uh podcast on basis point, that seems likely. Today, a lot less likely. So, if you were to ask me, I find it hard to find another better company, but that may be my bias speaking.
Oh.
Let me see. $18.
I I think my head tells me no. My heart tells me yes. Basically, that's what I'm trying to say. If in case I wasn't really clear about the S&P question.
$18. Oh. Oh, why do they have it at 590?
I have it on my screen at Am I not Am I seeing this wrong? June 16, 2028. $18 covered call. Uh last transacted price 653. Not this. Let's let's let's move it to 650.
Okay.
I'm not I do not have 65,000.
You know what? Let's just let's just do 20 contracts. 20 contracts. 13,000.
Let's let's see gets from 20 to 45. Why?
Because I always think that Sofa can get to 45.
So the profit bear in mind the numbers that you're seeing on screen this is not the ending value of the capital this is the profits that you're seeing. So a 340% gain or 315% gain over here this is basically a 4x.
So basically this means that if SoFi does a 3x your option by June 2028 your options will do a 4x and of course if it happens faster definitely that's going to be better. Uh let's say you get $35. Now $35 is basically a double from here 100% gain.
But let's say it happens by October in the fourth quarter of 202. You're getting 170% gain on top of that.
Yeah. I mean I think it is not too bad because Yeah.
Is that extra $10,000 worth it?
Probably. Right? It is 77% extra.
So what I'm trying to say is that if you buy $13,000 worth of Sofi and it doubles, it becomes 26,000.
But if you buy $13,000 of Sofi leaves and it gets to $35, which is basically a double, you can end up with what's this? $36,000 instead of 26. So it's $10,000 more.
So I is that worth it? I don't know because the risk then is that of course if so far is below $20 at expiry we are down $8,05 if we are below $18 then we are basically completely wiped out. So that is the risk definitely that is the risk but I see so far in the $28 ranges uh throughout this and next year uh which means that you are getting a pretty decent return all the way until I would say August and September of next year because a $28 range from here would mean less than a double but for you you will be getting slightly over a double. U maybe the premiums here don't make the the the amount of premium extra you'll get might not make as much sense at the moment.
But you never know, the deltas can move pretty quickly. Uh, so Okay. Okay. No, no, no. I I know you're not criticizing. I I thought you were trying to tell me to put my my client into uh on on dust.
But yes, I know I know I know you're not trying to to to criticize. It's fine.
No, never.
I you I try to Okay.
I want to I only sell options on margin.
uh I do not use margin to buy anything because the opt when I sell options with margin I do not have to pay any interest in any case I would just need to top up the capital but back in on liberation day last year I literally sold options with money with margin and then I was driving home and I didn't have time to top up my money because I was in the car right and I got my sofi shares called Okay. At $9.20.
And yes, I was profitable. Let Let me see if I have that screenshot. I believe I still do.
Yeah, because I my my average sof price was around $8 and then uh I sold cash secure puts at $6 on on margin and basically uh after liberation day I kind of got margin caught at around $9, which was stupid because I ended up making a profit of over $1,000. It's the first time that you get margin call and you didn't lose money. But it was annoying because I had to wait to to buy back SoFi.
Yeah, I I ended up having to like buy back at like how much I buy it back at and it's annoying because it was through Interactive Brokers and it took and it takes very long to deposit money at least in Singapore on Interactive Brokers. And then after that after that experience, I I I just transferred everything out because they were too slow for for for me in Singapore because you have to wire them the money and like with like with Mumu or with Weeboo Tiger, I'm it's connected directly to my uh NIC number which is like the social security and the deposits happen like instantly. But it's not so with Interactive Brokers, at least at that point in time.
Okay, if the cues are down 20%, the index itself is down 20%. Totally different consideration.
Totally different consideration.
What's going uh what's going go today? I I think you mean what's going on today or what's going good today? What's going good?
Well, the VIX is good.
Give me a second.
That's about it. I I mean I I I have had like $60,000 swings in my portfolio in the last couple of days. It's really pretty insane. Uh wow, I ran down 15%.
painful painful day in the portfolio.
Literally everything is down.
Iran down 15%, Ethereum down 10%.
At this point, I'm just thinking whether or not it even makes sense to hold ETHA in this small portfolio.
I'm like so tempted to just train change the whole thing into Bitmine stock.
Robin Hood down 8%, Sofi down 8%, Zeta down six, Service Now down five, uh Nvidia down five, Grab down three.
Again, Grab is one of those should I just change to C Limited?
I think this is always a good time uh where when the markets are coming down, it's probably not at the bottom yet. You need to pick your horses before it gets to the bottom so that you are actually ready to redeploy your capital.
Oh yes, UNH is good.
I'm sure health is doing well. Yeah, you can see why is this here? This is not here.
TMDX. Well, I mean TMDX was popped its head over 70 yesterday. Uh but today we're back at 90 uh 69, right? UNH again uh thankfully like honestly the healthcare sector is like single-handedly carrying my client's portfolios.
Yeah. And by the way, the only reason why I have WBY Parker over here is because some of the creators that I used to listen to, uh, they were affiliates of WBY Parker. That's how I got to know them.
Oscar.
Well, Oscar is flat on the day definitely.
I I like Oscar. I mean, I like to see you. I traded it from 13 to 19 but I mean that's it for me.
Yeah. So looking at it uh I am interested in opening a small SoFi call position in this portfolio over here.
In my main portfolio I have to wait for money to come in over the next couple of weeks. But over here I have $20,000 ready to go. Uh, I might add some sofa leaps, but I do not like to buy it on an You see, we I don't do not like to buy at these kind of levels.
I've learned my lesson.
Uh, when I say these kind of levels, what I meant is that we tried to go past the 50-day moving average, didn't come back down. Seems like we are un going underneath the 618. If we are going there, I if we close below the 618, we are retesting $15 again. Pretty sure.
Yes, all of my retirees are very happy recently. I mean, their bonds are down slightly. Uh I think they're down like 3 4% but I mean they they're getting a 5% yield so so they're pretty happy on that and then yeah healthcare is carrying the portfolio.
Yeah.
So I I think for me I am exercising a little bit of discipline. In the past I do not have so much discipline. I would just buy and I would have bought so today as well. But from the looks of things below the 50-day moving average looks like we are closing. I mean we we tried to go past the 50-day didn't come back down and right now we are below the below the 618. What I would say is that on Monday if we get a bounce I will buy.
Otherwise I will likely be buying if we get another retest of the $15 ranges over here. So I I I'm really waiting right now. I want to see what happens next. So not in a hurry to buy. I would rather buy it at 720 with a confirmation uh than at 660 without a confirmation.
Yeah. But I am a bit tempted to dollar cost average into this uh with Momo right now. 650 is pretty decent. The the reason why I am a little bit tempted is that because when I first looked at $18 leaps for SoFi, I believe they were around 690. So this is already lower 5% lower than what I Yeah, but if we get to 15, maybe I can get it in the $5 ranges. That is my hope.
And I would say that if I can get it in the $5 ranges, it's going to be a lot it's going to be a lot nicer returns because if you go over Yeah, if you go over here, you can actually see if we end at 28 $30 and we get it at basically buying the LEAP at 580 590 buys us an additional know 4 months to get a double in our money right by the time 2850 comes around because 2850 is uh 103% gain on December 25th 2027 nice Christmas present for yourself right you can consider buying yourself an advanced Christmas present so 580 leaps for 18th of June on de okay sorry 580 leaps expiring 18th of June 2028 on the 25th of December 2027. It may be a 2x Christmas gift to yourself if we at around $28.
But yes, uh I see BM bouncing back up. I am really hoping right like there there's something inside that just feels like Tom Lee what he's doing right now he's issuing the preferred shares they already have $400 million they are going to raise $300 million this week like with what is happening on Monday and what is happening today I believe today nearly the whole day we were trading above uh onetime MF and once they do that they basically have all the money they need to go out and a and buy up the last 5% of ETH thesis. Yes, Tommly. No. Uh it's two separate things. I don't think Tom Lee is part of the Ethereum thesis.
So, a very quick recap of what I was saying.
with an increase in transactions on the Ethereum platform. This increases the gas fees. The gas fees are being paid for in ETH. Now, it doesn't mean that when gas fees increase, ETH price have to increase because as long as the people performing the transactions already have ETH, it doesn't matter.
They are not going to have to go out into the market and buy new ETH to pay the gas fees. They currently already hold Ethereum.
So we need a exponential volume of transactions to take place on the Ethereum network and for that to happen that will really mean things like the tokenization of the entire uh stock market, the tokenization of real world assets of uh all the money market funds and things like that. That level of transactions coming onto the Ethereum network. Then once the ETH that some of these companies are holding uh is used up paying all the gas fees they would be forced to go out into the open market to buy more ETH. Now when that happens that buying of ETH in the open market is what will cause the price of ETH to rise. So it is not a direct correlation. The moment I see transactions rise ETH price will rise. It is not a direct correlation. Uh it is more indirect correlation. There's a more longtail effect. So I do think that the will take a little bit longer. Transactions will go up. People will start paying with the ETH that they have on hand. Once those ETH starts to run out, the ETH will start to be burnt. Yes, the validators will have more ETH. Some of these ETH will be sold because they will not you see the the whole mechanism is quite unique. The validators will not hold on to too much ETH for the very simple reason. The more Ethereum you hold, the bigger validator you become, the lower the yield you are getting.
The CIA ratio helps to balance the validator validator network so that no one validator gets too big. Because you stick too much, you end up lowering and hurting your own yield. Because of that, it is likely validators will end up selling those Ethereum on the market and you will hopefully help to balance the ecosystem.
What we have right now is that yes, one block of Ethereum can I think can can hold up to a number of transactions.
They want to increase that number so that the block fees does not scale as quickly because I believe every time the previous block is more than half full, the next block will cost 12.5% more. And if you have four or five in a row that are more than half full, then you're going to see the price scale quite exponentially because it's 12.5% five times in a row. That's nearly a 80% growth in the space of just five transactions, which is a minute. So you imagine the fees that you are paying to transact on Ethereum increases 80% in one minute just because you have five backto-back transactions where they're more than half full. So that's what the next update hopes to do. So all in all, thesis not broken thesis much more long tail than long Tom Lee has made it out to be. you go and look at people who have been talking about Bitcoin and uh Ethereum, it seems like there is the the bottom is still yet to come. Uh and we are likely seeing an end. If you're going by the traditional four-year crypto winter, the end of the crypto winter should be in October, November.
I think this is this and this is where okay what you say is true but this is where at this point in time it makes sense for that this is what it means by Tom Lee BMR is protecting the network because in order for the vote to go through Tom Lee holding quite a big share like Bitmine has to vote against uh have to vote for the fork if there is ever to be a fork.
So the core aspect of Ethereum will still hold because of all of these validators. And I think that that is what uh that's the kind of certainty that Wall Street actually needs.
All right, with that uh I've come to the end of the stream. Thank you for your time. Uh it is a red day. You know what?
If you got no capital, no more cash, I go to bed. If you're in Singapore, go out for a walk. Go to the gym. Do something, right?
Do something. Watch Netflix. You have earned it. Do not look at your portfolio. Do not think about leaps. Do not think about calls. Do not think about any of that. Just don't look. Just don't look. Okay.
Yeah, you can. Today, you have the permission to be Yeah.
free from the stock market which I mean I'm sure none of us are actually completely free from the stock market but yeah I I think it is a red day uh everything is red there's no need to try and find reasons for why your particular stock is red every single stock is red there are whole host of reasons inflation conflict in the Middle East right the higher jobs numbers causing inflation private credit fears everything oops Sorry.
Right. And so with that, I will bring the stream to a close and I will see you on Monday.
Bye.
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