Weekly Update: +$52,569 & +13%

What a crazy couple weeks

Hey everyone,

Hope you had a great week. First. I hope it’s clear I share these numbers for transparency and maybe some inspiration. Investing and finance in general is not a comparison. That’s easy to say and I’m sure internally we all compare ourselves to others based on money to some extent.

Anyways, just want to be clear that I realize everyone is in a different place financially. I invest to eventually have freedom over how my wife and I spend our time and to hopefully make a positive impact on the lives of others.

Today’s email is a bit different. I want to share a “Tweetstorm” of some options gambles I recently took. They ended up working out, but my conclusion is that it was extremely careless, stressful, and just not how I want to invest or encourage others to invest. So PLEASE PLEASE PLEASE don’t mess with options unless you are 1000% comfortable with them.

You should be able to click on any of the Tweets and they’ll bring you to the actual Tweet on Twitter (that was a tongue twister). Or…just read them here.

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Austin Lieberman @AustinLieb

1.1 Who I follow that has shaped how I think about money and invest @morganhousel @danielcrosby @DavidGFool @themotleyfool @jasonzweigwsj @AnnieDuke @naval @awealthofcs @ReformedBroker @michaelbatnick @nntaleb Some very different opinions/styles in there but...

Austin Lieberman @AustinLieb

1.2 My takeaways when combining all of them Our default emotions work against us when it comes to investing. Overconfidence can destroy you. Too much fear can destroy you. People misunderstand Risk and Process vs resulting. People underestimate black swans impact on them..

Austin Lieberman @AustinLieb

1.3 my takeaways continued Longer time horizons = better. Impossible to know what and when. Possible to find the winners and add to them. Winners keep winning. Most people shouldn't invest in individual stocks. It is possible to beat the market investing in individual stocks.

Austin Lieberman @AustinLieb

1/Results from my experiment/gamble. I must reiterate that 95% of my portfolio is invested in great founder-led companies that I'd like to hold forever (I won't, but that's the initial mindset when I invest).

Austin Lieberman @AustinLieb

7. so some examples. $SFIX bought $20 Puts & 25 Calls - at $31 pre-mkt looking like it will be about a 150% return $MDB $130 Put & $150 Calls - $144 could end up worthless $SMAR $35/$45 - $40.80 could end up worthless $ESTC $75/$90 - ? $BYND $80 & 90/$110 - reports today

Austin Lieberman @AustinLieb

2/So first, let's look at where my portfolio was when I tweeted that. This is a report from my brokerage at the close of market yesterday Jun 6th, 2019. YTD: +48%

Austin Lieberman @AustinLieb

3/We will start with the winning trades: June 5: Bought $SFIX $25 Calls and $20 Puts for a total of $1.92 per combo June 6: Sold Calls for $3.80 = 97% gain I still own the $20 Puts which will probably expire worthless @stitchfix

Austin Lieberman @AustinLieb

4/ $BYND @BeyondMeat June 5 Bought 10 x $110 Calls for $3.5/ech = $3,500 total 20 x $90 Puts for $2.35/ech = $4,700 total 20 x $80 Puts for $0.65/ech = $1,300 total = $9,500 total (very risky/stupid of me) June 7: Sold 10 x $110 Calls for $15.5/ech = $15,500 = 63% gain

Austin Lieberman @AustinLieb

5/ $ZM @zoom_us June 6 Bought $85 Calls and $70 Puts for a total of $5.10 per combo June 7 Sold all Calls and Puts for $10.58/ech = 108% gain Huge fan of Zoom and loved the earnings report. I think this company has an opportunity to 5x or 10x in 10yrs but don't own shares

Austin Lieberman @AustinLieb

6/ $SMAR @Smartsheet June 5 Bought $45 calls and $35 Puts for a total of $1.70 per combo June 7 Sold all Calls and Puts for $2.63 per combo = 55% gain I don't own a position in SMAR and I don't intend to. Was not impressed by ER and I feel there are better opportunities.

Austin Lieberman @AustinLieb

7/ $DOCU @DocuSign June 6 Bought $60 Calls and $50 Puts for a total of $2.28 per combo June 7 Sold all Calls and Puts for $4.59 per combo = 101% gain I don't own a position in DOCU and don't see this sell-off as an opportunity to invest. I try to invest in only the best cos.

Austin Lieberman @AustinLieb

8/ Okay now for the losers: $ESTC @elastic was another where I bought a different amount of Puts and Calls so I'll use cash value: June 5 Bought 10 x $90 Calls for $2.30 = $2,300 Bought 50 x $100 Calls for $.55 = $2,750 Bought 20 x $75 Puts for $1.75 = $3,500 = $8,550

Austin Lieberman @AustinLieb

9/ Still on $ESTC @elastic I still own all of the Puts and Calls. They expire June 21st. There's a chance that one side of that trade is worth something, but I'm going to count them as worthless. So goodbye $8,550. Just like that. So -100% if all trades r equal weighted.

Austin Lieberman @AustinLieb

10/ $MDB @MongoDB. This one is frustrating. I ended up selling for a loss and now 2hrs later it would be up 100%+ that's the risk/frustration/stress/fascination with short-term options gambles. however, MDB shares make up 16.6% of my portfolio so that helps a little bit.

Austin Lieberman @AustinLieb

11/ Onto the $MDB options gamble June 5 Bought 5 x $150 Calls for $6.62 each = $3,310 Bought 20 x $130 Puts for $2.39 each = $4,780 = $8090 total June 7 Sold 5 x $150 calls for $5.30 each = $2,650 I'm going to count the Puts as worthless so that's a loss of $5440 or -67%

Austin Lieberman @AustinLieb

The frustrating part, right now, the calls I sold for $5.30 are trading for $13.50 or about 125% higher than when I sold... but what can you do? I was fearful of losing that extra $2,650.

Austin Lieberman @AustinLieb

12/ @Domotalk $DOMO June 6 Bought $34 Calls and $28 Puts for a total of $3.76 ech June 7 Sold all Calls and Puts for $2.78 loss of 26% I do not own any shares and don't look at this as a buying opportunity. I think there are better companies to own.

Austin Lieberman @AustinLieb

13/ to round out the pain $pd @pagerduty June 6 Bought $50 Calls for $2.12 and $40 Puts for $2.17 = total of $4.29 June 7 sold all for a total of $3.65 for a loss of 15%

Austin Lieberman @AustinLieb

14/So in total (if they were all equal position sizes when I bought which is how I want to test this type of experiment) +97% +63% +108% +55% +101% -100% -67% -26% -15% = +216% What does all this? Well probably that I got really lucky. I risked a lot which was really dumb

Austin Lieberman @AustinLieb

15/Even though this worked out for me this time, I do not plan to do this anymore. It just isn't worth the time, stress, risk, etc. Also, I enjoy reading about and investing in what I believe are the world's best founder-led companies to generate long-term wealth.

Austin Lieberman @AustinLieb

16/ Investing long-term in companies like $TTD, $TWLO, $MDB, $AYX, $OKTA, $ZS, $PLAN, $ROKU, $PD, $ESTC, $SHOP, etc is how I want to spend my investing time. It's also something I'm much more comfortable sharing because I believe it's more attainable for everyday people.

Austin Lieberman @AustinLieb

17/ So to conclude, my performance as of today and current portfolio. YTD +56% Holdings as a % of total portfolio: $TTD 19.46% $TWLO 17.82% $MDB 16.81% $AYX 14.89% $OKTA 9.65% $PD 7.26% $ZS 7.26% $ROKU 5.56% $PLAN 5.50% I sold $ESTC today and added to $PD $ROKU & $PLAN

Austin Lieberman @AustinLieb

18/ I'm sharing this because it was painful to write. I'm a bit embarrassed and mad at myself for foolishly risking that much money on some options gambles. I do believe the stock market is a great vehicle to build long-term wealth, but we must have discipline.

Austin Lieberman @AustinLieb

19/ Now I want to get back to spending my free time studying, investing in, and sharing my process/thoughts on what I believe are the world's best founder-led companies. I apologize for the distraction.

Wrap it up already Austin

That’s all for this week. As always, thank you for your time and attention. I would love your feedback on these updates. Are they too long and what else would you like me to talk about? Email or comment and let me know.

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