2025 - Week 2 of 52 

Net profit: -$1,684📉
YTD Net profit: $9,714✅ 

YTD return: 4.57%🏆
S&P 500 YTD: -2.44% 
NASDAQ YTD: -2.84%

Market recap: Holding steady in a tough market

The market dipped a bit last week, but we held (relatively) steady. Important to quickly note that while this week shows a loss on paper, our account actually made money. This is because our bearish hedges, which help balance the portfolio, expire on January 17th. These will reflect in next week's tracker—which show a pretty damn impressive week. 

Every week offers a chance to reflect and improve. This week was relatively clean, but here are a couple of areas we could've done better:

1) XSP Short Call management: We closed and rolled up our 593c to 601c early when the market started off green, locking in a $272 loss instead of riding out the movement. If we had held on, we could've made about $500. It's a small nit, but a good reminder to remain a little more patient.

2) Aggression on $AMD: We rolled a 119p to a 129p, aiming to capture value while $AMD trades below $130. Unfortunately, this resulted in a $486 loss. Was this a mistake? Tough to say, as we followed position-sizing rules and stayed within our strategy so I don't have many regrets here. Could have maybe staye d a little more patient and waited for a dip to re-establish the position, but nothing back-breaking here. Loss is smaller and we're still in the position.

Opportunities in the Dip
Market dips create opportunities, but it's critical to stick to sound principles. A key reminder: only sell positions you can afford to take assignment of. Avoid overloading on margin, which could force you to close positions prematurely. Patience is often the best play.

This week we scaled into some names we like: $AMD, $CELH, $ON, $MDB, and $INTC. These stocks offer solid value and align with our strategy of focusing on strong fundamentals and reasonable valuations. They've also been beaten down a bit so I imagine they may not feel as much paid as the rest of the market if we continue to drop. 

Looking Ahead
The 2024 market setup feels reminiscent of 2022—overvalued stocks correcting back to reality. We’re prioritizing stocks with better fundamentals and value, particularly those that have already seen some punishment in 2024. On the flip side, we're cautious about names like $PLTR and quantum stocks ($QUBT, $RGTI, $QBTS), which still have lofty valuations and could face challenges.

This is also a great time to consider longer-dated positions. With increased implied volatility, we're seeing attractive entries that:
(i) Offer solid returns,
(ii) Are comfortably out of the money, and
(iii) Provide time to ride out volatility.

Final Thoughts
Markets are always challenging, but they’re also full of opportunities if you stay disciplined. Remember that things can always get worse. We're not even 5% down from the peak, and typical market corrections are -10%. 

If you found value in this update, follow me for more insights, strategies, and weekly recaps. Let’s navigate these markets together and make 2025 a strong year!

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