What's my goal?
To turn $20,000 into $1M in 7 years.
I know, I know. I can feel your eyes rolling into the back of your head. It seems like another one of those harebrained plans, and it's incredibly likely I'm going to crash and burn. But, let me tell you how I got to this ridiculous goal.
"A journey of a thousand miles begins with a single step."
My journey started in this tropical country called the Philippines.
Yes, that's where I was born. I grew up in Manila and was fortunate enough to go to the best schools, thanks to my parents. Even at a young age, I already had an affinity for money. I always saved up my allowance, not because I wanted to spend it on something, but because I wanted to make it grow. Unfortunately, my older brother somehow always found a way to "borrow" it from me. But that's what older brothers do.
When I graduated from high school, my parents pounced on an opportunity to move to the US, so we sold all our shit, packed our bags and boxes, and left for New Jersey, initially, and finally to New York.
Before leaving, I thought about being closer to Wall Street and told my friends my goal was to become a billionaire. I didn't know how I would do it, but I had that naïve cockiness of a dumb young guy with nothing to lose. I've since learned that it's not as easy as "willing it into existence." I actually have to do the work.
But enough about that - let's talk about who I am.
My Background
I'm a first-generation immigrant (isn't that the trendy thing to say?), a guy in my early 30s, looking for a job as an accountant in the middle of a pandemic. I worked for around eight years or so, where I got started with a SIMPLE IRA. It was a Merrill Lynch account, and the fees were ridiculous every time you had to make a trade.
(You can tell this was years before Robinhood was a sperm cell in Vlad Tenev's balls.)
I ended up not touching my account for two years until I built it up to around $10,000, then transferred all of it to Vanguard.
I had been reading up on the Boglehead philosophy by then and admired what John Bogle was doing with Vanguard. He pioneered index investing and set up his company to offer low-cost index funds to regular people. The "buy and hold" strategy sounded like the best way to go. So every six months, when cash built up in my Merrill Lynch account, I would transfer it to Vanguard and invest it all in its ETFs, mostly VTSAX (Vanguard Total Stock Market Index Fund) and VGT (Vanguard Technology ETF).
And that was the first three years of my "investing experience."
When I had some downtime at work, I devoured as much knowledge as possible from various finance and investing communities on Reddit. The advice was all very sound and also very risk-averse. As a result, I felt I was going along a safe but quite boring path to a worry-free retirement.
And then I stumbled upon WallStreetBets.
"It's like 4chan found a Bloomberg terminal"
It was early 2015, and these "degenerates," as they liked to call themselves, were gambling a shit ton of money on biotech stocks. They scoured the web for catalysts, like FDA approvals, and threw down a serious amount of money on call options and, as these things go, posted the loss porn afterward. When they do hit it big, they would talk about the yachts they would buy with all the tendies (investment gains, enough to buy some chicken tenders) they made. It was madness!
But I was hooked. And I partially departed from my Boglehead ways. (I say partially because I still held around 20-30% of my portfolio in index funds as sort of a settlement fund which I converted to cash to fund my plays when opportunities arose.)
Among all the biotech plays were DDs (due diligence) on $AMD, $SHOP, and $NVDA. I kept seeing those tickers pop up in post after post, so I finally decided to invest in individual stocks the next time I had a lump of money to transfer to Vanguard.
After all, I'm just heeding Michael Scott's advice:
If you're in your 20s full of cum and not taking risks, you might as well just kill yourself. You're already dead.
During that time, a small startup called Robinhood started disrupting the industry by offering "no-fee investing." They targeted millennials, like me, and younger people still in college. They offered one free stock for every referral that signed up, which helped their growth tremendously!
At first, Robinhood users were the laughing stock of WallStreetBets, with their puny accounts and an unstable platform. The app crashed all the time, especially in times of volatility where you'd want to trade in and out. But over time, the platform gained popularity that, pretty soon, most people were using it, and trading on Robinhood became the norm.
While I still made most of my investing in my Vanguard IRAs, I put some money in my Robinhood account to scratch that gambling itch. It didn't take me long to figure out that the "buy and hold" strategy was legit.
I lost money on most of the stocks I tried to day trade (or lost out on more potential gains) while my IRA's value kept going up. So eventually, I just hung on to the stocks I already had in that account and watched it grow.
In my IRAs, I started investing in $AMD, $NVDA, $NFLX, and my biggest winner, $SHOP, among others. It was a thrill to watch these grow day after day after day, even while my $VTSAX was lagging. Unfortunately, life got in the way after several years, and despite my best efforts, I was unable to put more money into my Vanguard IRAs. I quickly had to find a way to make more money in those accounts.
And then, the pandemic happened.
The V-Shaped Recovery
It was around late January of 2020 when WSB started tracking the virus in China. A lot of people were predicting that it would soon spread into a full-blown worldwide pandemic. So they started buying put options on $SPY. I told myself now was the time to get into options and learn by just doing it.
So I got in on the action and bought some put options on $SPY as well, weeks before the CDC finally declared Covid-19 as a pandemic.
And I made a ton of money. The market kept hitting circuit breakers for several days because of how fast it was going down.
I was ecstatic. I started thinking about how easy it was to make a lot of money while dismissing the fact that it may have been beginner's luck. The option greeks were just an afterthought (I didn't take the time to understand them). More so, IV% and IVR.
Many people on WSB, including me, got overconfident and doubled down some more on puts after SPY had already gone down so much. And then, the market started reversing. It didn't make any sense. We were still in the early stages of the pandemic, but day by day, the market just kept going up.
...I lost most of my tendies. And I learned a costly lesson about IV crush. The market went back up as swiftly as it crashed.
I figured I'd take time away from the market and let it do its thing. Like most portfolios in 2020, mine doubled in value, even without touching it or adding money into it. It wasn't until December of 2020 when I started really paying attention to the market and WSB again.
The GameStop Mania
I'd been seeing DeepFuckingValue's (aka Roaring Kitty or real name Keith Gill) posts on $GME pop up on WSB months before but kept on ignoring it. His monthly updates were beginning to have a cult-like following - almost always not a good sign. I just figured it was one of those overconfident YOLOs that'll end up with loss porn.
I mean, who the hell would gamble on a brick-and-mortar company with an outdated business model? In a pandemic, no less???
It was around mid-December when I finally started paying attention to it. Everyone invested in it was ecstatic and made all these posts about the tendies they were making. I was feeling the FOMO but wanted to wait it out until the new year.
There were a lot of posts exploding when the stock popped up to $20, and I remember telling myself, "Wow, I'm glad they're actually making money." Then, when $GME popped up to $30-35, the sub started getting a lot of attention, and everyone was in a wild state of FOMO.
Based on my experience, when a stock shoots up like that, you better bail— the same day. Maybe even a day later, but usually, that would be too late. I expected it to crash soon after, to somewhere around $15-20.
But this was different. For some reason, I missed the thesis behind GameStop and its potential for a short squeeze. So, dismissing it as another pump and dump scenario, I bought $AMC and $BB calls instead.
Suddenly, $GME mania spread around the world in only a couple of days. But, unfortunately, it also became something that WSB didn't intend it to be: a social cause to "squeeze the shorts."
A lot of regular people, normally not involved in the markets, joined hands and sang kumbaya and wished upon the fall of hedgies, or hedge firms, that make money by shorting stocks. They called themselves apes because individually, they were dumbasses, but collectively, they thought they were stronk.
Trust me: you do not want to be an ape. Knowing nothing about investing and just blindly following the hype is, in my opinion, not a sound investing strategy.
Although, thanks to the apes, volatility in the markets rose sharply, and my $AMC and $BB calls got swept up in this worldwide movement of squeezing the shorts. I didn't sell right away when my calls were up 1000% because I'm a greedy fuck, but I sold later when they were down to just around a 300% gain.
This brings us to today.
The Journey Begins
The events this past year just made me more interested in options strategies. So now, what's my goal again?
I want to make $1M in 7 years using a starting capital of $20,000.
How am I going to do this seemingly impossible task?
Follow along this journey with me, where I will keep you updated on my progress every month. I hope you can learn a thing or two. Hell, I hope I learn a thing or two.
Catch you on next month's update to read about the strategies I employ to reach my goal.
Growing Tendies does not accept any liability for any loss or damage which is incurred from any loss of money on a trade. All trades are done using the tastytrade platform.
