🍕 Pentagon Pizza Index: Reading Geopolitical Tea Leaves – Ever noticed takeout orders spike near the Pentagon before major crises? Sometimes unconventional data points can provide valuable market sentiment insights
🧬 Martin Shkreli’s Quantum Computing Crusade – The controversial pharma entrepreneur turned quantum computing bear makes his case for why the sector is a massive bubble. We dissect his debate performance and whether his “never ever” stance goes too far
⚡ EOS Energy Options Strategy Deep Dive – Krzysztof breaks down his sophisticated options play on EOS after the stock’s 40% crash, using standard deviation calculations and long-dated LEAPs to maximize leverage while managing risk
📃 Immigration Policy Reality Check – Luke explains why he sold Remitly after Trump’s immigration promises didn’t materialize as expected $RELY
🎰 The Psychology of Cutting Losses – Poker lessons applied to investing: why folding a position (even at a loss) often separates beginners from pros, and how price anchoring can destroy portfolios
🌴 Thank you for supporting Wall Street Wildlife on Patreon! 💵 Your support helps us continue bringing you valuable insights and market analysis
Segments:
00:00 Introduction
00:45 Pentagon Pizza Index: Food Orders Predict Crises
08:45 Open Source Intelligence and Flight Tracking
12:12 Technical Analysis: Valid Tool or Voodoo?
15:57 Martin Shkreli: The Quantum Computing Bear
25:00 Gartner Hype Cycle and Quantum Bubble Dynamics
27:59 Shkreli’s Character and Investment Credibility
32:37 Quantum Computing Short Strategies
33:01 EOS Energy Options Play Breakdown $EOSE
41:02 Options Strategy: Standard Deviation and LEAPs
45:25 Immigration Policy and Remitly Exit $RELY
48:57 Poker Psychology: Folding Winners and Cutting Losses
E85 – Pentagon Pizza and Shrekli Debate – No Ads
[00:00:00] Krys: you know what my greatest accomplishment was? I went to the tax office tried to pay my taxes, and two hours later almost succeeded
[00:00:07] Luke: All my money’s in a tax free account now and I’m withdrawing from it. So hey, taxes are SMUGs.
[00:00:13] Krys: have never been more convinced that a company like
quantum Computer Inc, is going to lose the majority of its valuation.
[00:00:21] Luke: Everybody gets overexcited peak of inflated expectations, like money flows into, this sector, like water, people are backing the dumbest companies. And then boom, trough of disillusionment.
then you reach the plateau of productivity, this technology, is adding value it’s really here.
[00:00:39] Krys: I’m gonna cash out it might be a hundred percent, 150 depending on the news that caused the spike.
there is a surge in takeout food orders, not necessarily pizza,in the vicinity of the Pentagon CIA and White House before most major international crises are announced to the public.It’s not a bad thing to have in your toolkit.
learn the tool, weigh it properly, add a pizza index, now you’re in business
[00:01:13] Luke: Welcome to Wall Street Wildlife with Christophe and Luke in this week’s packed episode, the Pentagon Pizza Index. What canned fast food.
Tell us about geopolitics. Martin Shrek on quantum computing and where this investment theme might be going longer term. Plus, we are actually gonna tell you why I sold Remitly, and Christophe is gonna tell you why he bought some more EOS calls
[00:01:42] Krys: If that’s what’s gonna happen In the meantime, you might all you visual learners out there might notice I look more like a monkey than ever before. That’s because I’m back on my native soil. I. So I’m getting in touch with my natural self.
[00:01:59] Luke: like, is are Poland, are, are monkeys? Uh, what Not endemic, what’s the word anyway? Do they live in Poland? Do they come from Poland?
[00:02:05] Krys: No, we don’t have a raging monkey population besides this one.
[00:02:09] Luke: Okay. Alright. Alright. Are you enjoying the home country? Is it known as the home country? I.
[00:02:14] Krys: It is my home country. It’s very bizarre to be back to the place where, you know, you have roots and happen to know the language, but everything still seems, uh, um, different, a little foreign, It’s hard to see. Yeah. Uh, not just different in form, but like in Sicily there’s, there’s a certain, obviously feel and, um, a lot of, let’s say bricks and mountains.
And here everything is green and giant, tall trees. And you could like, smell, like it smells different. It’s just so wild. It’s just different, different worlds. But the historical layers I could feel just personally and, and overall,
[00:02:52] Luke: I was hoping to come and join you, but you forgot to invite me, and so I figured it wasn’t happening. And then you messaged me a few days ago and said like, when are you coming? Like, you haven’t fucking told me where. When do I need to bring a tent? Like what’s going on?
[00:03:05] Krys: Uh,
dear listeners, I don’t, uh, that is Badger’s version. My version is slightly different. I extended an invite on the silver platter. I did not hear a reply. Uh, I trusted he was booking his tickets. He, he was in contact with his agent, so I reminded
[00:03:22] Luke: tell me where to fly to. There’s many airports in Poland. Just to make you aware, there are multiple airports.
[00:03:31] Krys: Process of, of elimination, uh, I dunno if we’re ready for a special guest, but we’re, we’re recording at the moment, so I don’t care. Okay. Mama doesn’t care. So,
[00:03:44] Luke: All right. Hey,
[00:03:46] Krys: hi, look.
[00:03:46] Luke: on Hello. Say hello to
[00:03:50] Krys: What is your beer? Listen, the the best Polish beer I’m drinking. You are invited. I don’t see you. You don’t, don’t, don’t, don’t even tell me that you have beer in this, in this container. You don’t look
[00:04:09] Luke: Mama, this is like, it’s, it’s midafternoon on a Tuesday. No, Monday. This is water. Why are you drinking beer on a Monday afternoon?
[00:04:16] Krys: Listen, right now, morning in Poland. So. Bye. So now, now you can see the, the root Yeah, the, the roots of the issues.
[00:04:34] Luke: your, your mama is a fearsome character. The apple fell far from the tree ’cause your weak drinking capability. When I came visiting you in Austin.
[00:04:45] Krys: Right on. Yes. So anyway, it’s been a wild ride. Hey, you know what my greatest accomplishment was? I went to the tax office and I tried to pay my taxes, and two hours later I almost succeeded. And this was in, this was like in, in, in the native tongue. So if I could do that, uh, I might, you know, it’s, uh. I was impressed with my, with myself.
[00:05:10] Luke: Fantastic. Very good. Well done. I’m not sure do, uh. Oh, let’s not go there. I was gonna ask you about your US tax situation, but let’s not go there on podcast.
[00:05:24] Krys: Isn’t me, isn’t me? Or does every government on the planet want, want a piece?
[00:05:30] Luke: I dunno. Yeah, I’ve sort of escaped from the system in some ways. I live this tax free life. I’ve got my own like personal Dubai. I take everywhere with me ’cause. All my money’s in a tax free account now and I’m withdrawing from it. So hey, taxes are SMUGs.
[00:05:45] Krys: I have, I have much to learn from you. See, that’s, that may be the difference, the main difference between us. I. Is that what you just said here? I am spending most of my hours in tax offices and you are not.
[00:06:00] Luke: like, just like the invitation that was not forthcoming to Poland, I plan. I plan a ahead. I take actions today to make my life easier in the future. So you must do those things.
[00:06:18] Krys: You know, you know what’s convenient is we have records on our, on our channel. I’m gonna scroll back and see just what we could present our viewership in terms of, was what I said an invitation or, or was it some, some hocus pocus mirage that I just dreamed of, dreamed of.
[00:06:40] Luke: It’ll have to be next year. The, uh, the logistics didn’t, were not forthcoming anyway, anyway.
[00:06:46] Krys: Not, not necessarily. Uh, I am allegedly being whisked off to Northern Poland later, uh, later in the week to go deep into another one of these Polish premeal forests to go birdwatching for like an extended period of time. Here’s here. I’ll let you know where, I’ll let you know when you show up. Put on a nice grizzly bear costume.
Jump out from behind the tree. Uh, and then
[00:07:19] Luke: Get my ass shot by your hunting uncles. Yeah.
[00:07:24] Krys: how’s life, uh, how’s life on your side of the pond?
[00:07:27] Luke: It is pretty good. Uh, yeah, like not, not much is going on right now. I’m having a nice chilled time. My whoop, I’ve, I’m now, I’m wearing a whoop for the last month or so, and, uh, it’s unlocking all sorts of insights and I’m not sleeping well. It turns out I thought I was sleeping great and now it’s given me all sorts of drama about my ever increasing sleep debt, and it’s trying to help me figure out.
Like thing, behaviors that correlate with bad sleep. I didn’t know I slept badly. Turns out I do. And it’s like, like it’s, I’m younger than my chronological age. My biological age is like five years better than my chronological age. But, uh, this sleep debt is doing damage. So yeah. I’m in a bit of a worry about that.
I’ll figure
[00:08:12] Krys: I have a theory. I have a theory. You’re not paying enough taxes and that’s weighing on your soul.
[00:08:21] Luke: That’s it. Yeah. Gotta contribute. Yeah. Good. I’ll, I’ll find a way. I’ll find a way immediately to contribute to society. Well, how about we both try and contribute to our own little society by talking about something I meaningful to an investor for this week. And why don’t we start with something called the Pentagon Pizza Index.
You heard of this?
[00:08:45] Krys: Tell me about pizzas and indexes and what they have to do with the world. Uh, blowing up outside our window.
[00:08:51] Luke: So apparently this is quite, this is relatively well known, right? It totally passed me by, but I think it is always interesting as an investor to look for things that like correlation and causation, things that tend to happen around the same time, ideally before like another thing. If there is a, if there is a correlation there, then you know, maybe you can rely on that and you can start to form judgments about what’s happening in the world.
And someone apparently identified that. Well, let’s, let’s rewind news and what, what course happened this time? So unfortunately, like the situation in the Middle East has broken down again, uh, Israel and Iran are back at it, back at each other’s throats. And, um, somebody noted that. Well, the Pentagon Pizza Index, so there is a surge in takeout food orders, not necessarily pizza, um, in the vicinity of the Pentagon and the CIA and the White House before most major international crises are announced to the public.
So you could kind of front run this a little bit perhaps by studying like. The, the sort of food times in these restaurants and you can see that like live on Google. You don’t even have to be like stalking and hanging around outside the pizza joint at the time. And then another sort of similar quirk is like.
Bars and nightclubs and places like that tend to get less busy around that time. ’cause everyone’s like pulling all-nighters and they’re super busy and they haven’t got time to like go and blow off steam. So, interesting correlation. I kind of buy, this sort of makes sense to me that this might be true.
Would you reckon?
[00:10:34] Krys: Uh. You, uh, let me ask you a follow-up question. Do you see this as a kind of one-to-one correlation or am I missing some level of complexity? I.
[00:10:45] Luke: Oh, there’s probably like a ton of things that will cause a particular pizza restaurant to be more busy, right? Maybe they just launched a promotion or maybe there’s like, you know, a band playing in town. There could be a whole bunch of reasons. Uh, might be a COVID pandemic and no one can go to the stores, but I.
I think, so this is an example of something known as open source intelligence os in uh, essentially like getting a bit of insight into the inner machinations of government, perhaps through like publicly available information. Like that guy, that guy who got shut down ’cause he was tracking Elon Musk’s jet and like where is his private jet flying from?
And then trying to infer something about. Like deals and actually relevant to one of my holdings, um, Jonah Lupton, like a pretty famous, uh, name on X, like he’s been tracking publicly and sort of posting his insights. He’s been tracking flights taken by trans medics owned aircraft, like their aircraft network.
And then from that. Publicly available information. There’s nothing illegal about this. And from that he can draw some inferences around like their growth rates and sort of take up and like, you know, are hospitals increasingly using their services So that can tell you something before you wait for like the quarterly report to come out and you potentially could invest around that?
[00:12:12] Krys: Yeah, I don’t think it’s crazy. That’s one, two, what? Uh, two. Yeah. It’s not only is it not crazy, but if you think about where in this age of information you could still gain some alpha, to me, this kind of sleuthing, ’cause it’s knowing where the look and it’s not over leveraging on just say the data points that everybody uses.
It seems to me like, uh, not. Not stupid way to gain an additional layer of perspective. Obviously, obviously, were you to make this large portion of your investment in case you’d be, uh, you’d be ridiculous. But why not do something like this to confirm a certain trend? Second point, therefore, and this is where, uh, I know you’re gonna laugh at me because of what you did to me on the Patreons. But I don’t think this is too far different in kind from the kinds of magicians we see that use technical analysis as long as they don’t say right, that the price, uh, is the end all and be all like some people do, but who use price stuff to kind of, let’s say measure sentiment. Might we not say, uh, that’s a little bit of a similarity, like you measure sentiment via pizza indexes, and you could also measure sentiment via looking at price patterns and that as long as you don’t, you’re not overleveraging.
It’s not a bad thing to have in your toolkit.
[00:14:00] Luke: Yeah, fair enough. Look, I, I, and what Christophe’s referring to is, uh, a snarky comment. I posted a meme on our Patreon, uh, community when one of our Patreons was asking about who uses technical trading successfully. Christophe believes he does, and I posted a bit of a meme about it. Um, uh, but you, you’re right, like I, kind of rag on you ’cause it’s funny to do so, but you’re right.
There’s probably something in that as part of a wider tool set.
[00:14:27] Krys: Exactly the stuff. We might as well talk about it just a little bit, uh, right. Um, the things that I think are rightly mocked are sort of what people were pointing, uh, out on our Patreon. It’s, it’s the, it’s the over extended belief that a certain pattern. It is predictive to the point where you could, you know, make your decisions on that.
I never approached it that way. It’s just more like out of 20 data pieces, if that too is in favor or against favor, you know, I weigh it. I, I weigh it in a certain sense, and it’s not a zero. Right. So I don’t know. This is, we’re not saying anything mystical here, although it’s unusual, like some people do.
Uh, it’s what they do all day, every day and they’re playing a mechanical game, which has nothing to do with investing. It’s just chart reading. There’s some people that think it’s complete garbage, which I think, uh, it’s not a small group of people that think there’s absolutely zero merit in any of it.
And I fall, I think somewhere, I don’t know if in between is the right word, but I. If you learn the tool, weigh it properly, add a pizza index, now you’re in business.
[00:15:43] Luke: Yeah, fair enough. And like you’re gonna tell us about your EOS position later in the episode. Like I know that’s one where you’ve used some technical indicators to kind of inform when you’ve added, so yeah, let’s pick that up when we chat about, yes.
[00:15:57] Krys: Yeah. Uh, so I. Sometime during the week, you, you sent me a, what, half an hour, 40 minute interview with, uh, Martin Shrek. Shrek, right. Shrek.
[00:16:14] Luke: Yeah.
[00:16:15] Krys: The guy that, uh, well, he ran a, he’s kind of open about it too, right? He, it’s a little surprising. The guy that committed some sort of fraud in the biotech business. Uh, and then when you listen to him talk about himself, he’s like, yeah, I was in jail.
I know I know more than you do because I went to jail or prison.
[00:16:32] Luke: Yeah. Quick, quick light reminder of who he is. So, um, yeah, Shrek, I think he was voted as like. The most punchable face of, I don’t know, like the 21 of the 20 teens. And I think he famously, he’s a, he’s like a pharma guy, investing guy, and he’s managing like a lot of money. I dunno if it’s own money or investors’ money.
He didn’t, he famously buy up the patent on some drug and then jack the price through the roof. And then was like, basically like he went, he, he uh, he got lambasted in the media for essentially like monetizing. People who are sick and needed these drugs. Um, and he made some arguments as to why, you know, this is how the model works.
But you know, ultimately it was kind of a predatory type thing and he became infamous for that. But like put his ethics and everything else aside, there’s no argument. He’s a smart dude. He understands like his niche of biotech very, very well. He’s certainly an expert in that area and he’s now. He has like a almost daily Twitter feed where he like live streams and, uh, chats about positions in his portfolio.
And he’s recently gone beyond biotech into talking about quantum computing. ’cause he, a bit like you and I were saying a few weeks ago, although I’m sure Shrek Lee was way earlier to this party than we were. Um, he’s been pointing at how quantum computing is a massive bubble. And, uh, he has a significant and increasing short position.
Like I get the impression it’s like hundreds of millions of dollars plus, uh, betting against most of these quantum meme stocks.
[00:18:14] Krys: First thing is for, uh, in terms of who he is, I stayed away from him. I did not listen to anything he had to say because of that. Most punchable face quotient.
[00:18:27] Luke: Yeah.
[00:18:29] Krys: I tend to, I just, I tend to get a little, when greed is your, is your domain, I’m like, okay, I don’t, I’m just not gonna mess with that. Two during that interview, he was extremely righteous. Would you agree with that?
[00:18:45] Luke: Yeah, well actually, so it wasn’t so much an interview, it was a debate, uh, and like a bull and a bear debate on. Quantum computing as an investment theme. And Shrekli was the, like the bear, like the strong bear. And then the bull in this particular debate was a investor called Shea Balo, um, stock Savy Shay on X.
It was also like a relatively big name. And I think like shade didn’t come out looking great in this interview, but I think it like just to sort of acknowledge. I mean, he’s probably made a mistake having that particular debate because as an investment professional who maybe understands like the high level and the theme, very hard to go into like a nuts and bolts detailed, granular debate with someone who is a domain expert, right?
You’re probably setting yourself up for a tough conversation, but yes, you’re right. Probably for good reasons like Shrek Lee came across as a bit self-righteous in the conversation.
[00:19:52] Krys: And here’s why I raised that point. Uh, I wouldn’t, I would amend that sentence from a bit self-righteous to. Full on self-righteous.
[00:20:01] Luke: Sure.
[00:20:02] Krys: He clearly has done more work in this space than his opponent, so to speak, where his debater debater, right. And yet, and yet, uh, I know from my 25 years doing this that some of my biggest investing mistakes was when I had.
S put in my 20 hours of doing, like reading the tiny print and I knew the technology better than anybody and I was like, you know, pounding my chest about how great this thing is and how it’s gonna do X, Y, and Z. And there’s a fine line where you cross, where you can delude yourself because of how much you know.
So it’s almost the opposite of the Dunning Kruger effect or whatever that’s called. Uh, and I sensed it so strongly. When I was listening to him that he came across as though he could not be wrong. That there was no way in which he could be wrong, even though his arguments were obviously to, to my ears quite solid.
So I. I don’t know where the truth lies. I’m guessing it’s probably closer to his argument, much closer, and yet because of the self-righteousness, I, I, I, I could not make the kinds of bets he’s making at this moment. I.
[00:21:20] Luke: okay, so it was like, here’s where I stand on this. So we’ve talked about the Gartner Hype Cycle in the past, which is where any new technology like quantum computing, like 3D printing decades ago, like ai, all sorts of stuff, right?
Everybody gets overexcited peak, peak of inflated expectations, like money flows into this, this sector, like water, people are backing the dumbest companies. And then boom, trough of disillusionment. Everybody realizes the technology’s not there. Uh, and everything comes crashing down super hard and then slowly.
Often you climb the slope of enlightenment, IE you start figuring out, okay, this is how we’ll do this thing, this is how we’re gonna deploy this thing, monetize it, generate economic value. And then you reach the plateau of productivity, which is like truly now this technology, this thing is adding value and it’s like real, it’s really here.
And like, you know, we ai right? We, everyone got excited about AI multiple times, like in the last 50 years. Like it’s, you know, AI was being discussed a long time ago. It’s only now that we’re climbing the slope of enlightenment and we seem that, you know, there is real revenue to be generated and cost savings to be made now.
I, where I sit on this is, I think we are on this hype cycle with quantum computing and we are certainly are the far left of this thing where like we are near the peak of a inflated expectations. Maybe we’ve still got like another double triple 10 X to go, right? Who knows? But at some point the bubble’s gonna burst.
I think that’s I, so I think we all probably agree with. Shrek Lee on that point, but probably where Shrek Lee diverges, maybe from you and me, I don’t wanna put words in your mouth, is so the position he took in this interview, in this debate was this technology is a science experiment. It will never, never, never, like definitive, never be generate economic value and actually be something material that like beyond very niche.
Cryptographic scientific, like mathematical domains. And I agree with respect that we’re gonna, that’s the journey over the next five years, let’s say. ’cause we are so far away from actually knowing how to do this stuff. But I. I sort of see through this too. There probably will be a slope of enlightenment that we will, we haven’t figured out how we’re going to use quantum computing, but we know like there are optimization problems that we could probably apply this technology to.
We don’t know exactly how yet, like there are, so this is why it’s screwed right now for the next five years. ’cause there are so many things we do not know that we have to discover. And it’s so, so ridiculous. Like it’s not just not knowing how to do it, it’s not knowing how to use it once you’ve successfully done it.
Like we’ve gotta figure out what the thing is and then how to actually deploy it, how to use it, how to monetize it, generate value from it. Shrek believes we will never figure out those things. I accept that we might. But the next five years is the same either way, like this stuff is gonna get slammed, body slammed hard and the only companies that are gonna be successful are gonna be like the giants, like the alphabets and the people, the folk like that, who have almost like a bottomless money pit.
And they can treat it as a science experiment. They don’t have to monetize it to actually do science in that domain and maybe kind of continue the uh, the investigation.
[00:25:00] Krys: This is why it’s so interesting to go back to his character. On the one hand, there’s something about him that seems raw and honest. He’s just gonna like shoot his mouth and tell you what he thinks. So I’m like, oh yeah, I’ll listen to that. But because he committed fraud in the past, I don’t, I can’t, I can’t also feel quite comfortable.
Uh, confident knowing he’s not, uh, not telling me something or that he’s, you know, lying by a mission or whatnot, but the part where he. Uh, you know that he’s sort of in the inner circle in some senses with some of the top AI minds and open AI and whatever, and they’re, they themselves have no position that has to do with quantum computing.
Why not? Right. It’s not like they’re dumb, like, why would they not be throwing significant money at this? I’m like, yeah, that, that makes sense. The other thing is you’re right. Exact, exactly. This to me presents a massive paradigm shift right. Of, of a. Technological sort, and when you start saying never, you are forgetting fundamentally what the paradigm shift means.
You can’t ever, just like science as a discipline, cannot ever discover all the things and we can’t ever know all the, I mean the incomplete Ethereum and all this other fan fancy stuff. There is no, we have a limit to our knowledge and his being righteous in this way is, is why. Uh, he’s, he’s right.
Directionally, he’s wrong. I think holistically.
[00:26:35] Luke: it remains to be seen and probably no one’s making like confident. Beyond five year predictions about this stuff. Like you don’t need to, you can, I think you, I think you can know what the next five years is gonna bring and you can invest accordingly. Um, and then let’s, you know, let’s let two or three of those years play out and then we’ll take a, a, a view on where we think like years eight to 10 are gonna take us.
[00:26:58] Krys: There. There was one thing he said, which was. I don’t know if it was concerning, uh, the stuff that, the way it could be used for encryption because of the whole Shores algorithm and large numbers and all that, which is directly correlated with Bitcoin security. So, you know, uh, I put that in my, call it watch, keep a watch on those developments column.
But then I also think the world’s best cryptographers, no doubt know this too. So they’re not just gonna be sitting there letting some. Attacker, just build their d you know, mobile army while not counteracting it somehow. So, all in all, uh, all in all, we should, we should say, I should say that I have never been more convinced that a company like Quantum Inc.
Quantum Computer Inc, is going to go, uh, is going to lose the majority of its value valuation. But I can’t be confident as to when that will happen.
[00:27:59] Luke: Yeah. To sort of pick up the conversation we started having two weeks ago that you had a short on what ticker QUBT, quantum Computing, Inc. And I, you had to close that ’cause I think we reflected that you short was a little too short term to really see like the collapse. And I’ve recently bought, uh, January, 2027, puts on ti ticker RGTI, and that’s like 18 months.
Maybe there’s enough, maybe there’s enough time for like the short thesis to play out.
[00:28:36] Krys: Exactly. Yeah, that’s the, that’s the right way to think about it. Um, because, uh, to remind listeners when fundamentals are not what the stock price is based on, you’re now, uh, in the hands of, uh. The people with money who make the price go to where they need it to go, to make the most profit. Whether that’s in your favor or not in your favor, in the quote unquote short term, something like six months is not, is is not enough.
I.
[00:29:05] Luke: I, I did look over the weekend. I’d like to take out some more shorts in this sector on different companies. Um, again, we’re just like entertainment money. Like this is not a material part of my investing strategy. I’m just kind of playing around with this stuff. But like, options, long dated options anyway are on this sector are really expensive.
Like most of these stocks have to. Go to like a third of their current market cap over the next year to 18 months. That’s like a massive haircut for these to make sense because they’re just so expensive to buy these puts.
[00:29:38] Krys: I am looking at the price of, uh, qubit. As we record in this moment, and it’s actually back to it’s, it’s almost at $19, which is like a $2.7 billion market cap. Uh, before the quantum call it bubble thing started in about, uh, call it October of last year, the share price was 70 cents. So it went from 70 cents to $19.
Uh, and if our thesis is correct, it’s gonna go back to around 70 cents or lower. Although, um, yeah, so there’s Right, uh, it still needs to fall massive amount, but to put premiums because they’re expensive. Even when the stock falls, something like 70% from here, that’s still, I think that’s approaching break even.
That’s why I closed my original at a tiny, tiny loss. ’cause I was right in the timing. Uh, it still wasn’t enough. And then instead of going, uh, falling down to the $1 level, it, it reversed.
[00:30:38] Luke: Are you, are you tempted on the back of some of this conversation, like we’ve brought it back into our chitchat regularly. You tempted to jump back in again?
[00:30:46] Krys: Absolutely I did. I was, uh, I started doing the math again, uh, on the back of our last episode, and I held off because I’m using a little bit of that technical analysis stuff now in this moment. Another way it’s kind of useful. Actually, this is another one of these. Uh, because the fundamentals are not in play, so whatever the next earnings call will, won’t be, won’t really matter.
Then primarily you have the charts to go by, and when there’s this massive swing in which the momentum now is up, I know I need to wait because the odds, the probability is that’s going to keep going up. So I withheld and interestingly enough to, I mean, today, yeah, it’s up, what, 12% or something? Yeah. Um, it, it’s, I, I don’t know.
I’ve asked you this question many times. Don’t you think this is a little bit like what poker players do in terms of, uh, reading the table and kind of waiting, um, with incomplete information to sort of get more aggressive. You don’t necessarily wait for a good hand. You kind of read the chart, so to speak.
[00:32:00] Luke: Yeah, I think there’s, there’s some. Overlaps. Yeah, it’s not a perfect analogy, but there’s certainly some poker discipline around, you know, being patient rather than just like blowing your load way too quickly.
[00:32:15] Krys: This would play poker in this hat and just. Uh, uh, I might actually take you up on, uh, um, more, we, we talk about this. I might open up a little basket of shorts on this industry.
[00:32:37] Luke: Okay, cool. Alright, well let us, let us know on the Patreon exactly what you buy and what Stripe prices and stuff. ’cause I’m looking at it, but I dunno much about derivatives. So I’m trying to learn, this is, this is my like fund money entertainment, but at the same time I’m actually trying to learn something useful.
[00:32:54] Krys: Yeah. Very good. Should I actually talk about the EOS option I bought last week?
[00:33:00] Luke: Yeah, let’s do that.
[00:33:01] Krys: Because it’s a derivative. I wanna try to keep this simple because options can be incredibly complicated and overwhelming and you start just, you know, your eyes get cross high. But I use a couple of tools.
They’re very basic in a sense. Um, one is there’s a way to measure, uh, standard deviation from the current price. And all that tells you it’s just pure stats, statistics that at a certain standard deviation. It’s most likely that the price in the short term won’t exceed that number, whatever the statistical probability is, like 90 whatever percent, right?
Uh, I’m not a stats guy, but I know that much. So whatever price target I set that I think the stock can get to. If I wanna still not be too big for my britches, I make sure that that target price is within that first standing standard deviation, or pretty close to it. Does that make sense?
[00:34:00] Luke: Yeah, yeah, yeah. Yes. You don’t need like some like wildly improbable event for your thesis to make sense.
[00:34:07] Krys: Correct. So in terms, so when I was looking at the EOS option, I bought for King of the Jungle, this was right after the stock kind of cratered by whatever, 40%. It went from seven 60 down to $4 10 cents, something like that on the back of the financial restructuring. One, I tried to do my best to understand all that.
I came to the conclusion that was actually good for the company. So what we have in the moment is call it a temporary, uh, call, call it a dip, right? I thought of it as a temporary dip. Okay. So in my own mind’s eye, the stock price is, call it undervalued or, or overly short term pessimistic. So it will go back.
Uh, up. Okay. But that, that’s, uh, obviously I have to be right about that. So why did I choose to buy an option instead of more shares? Because, uh, I guess it’s, it’s the sequence of when the price collapse quickly. And almost like, uh, mistakenly, although that’s not quite the right word, but I would say it mis the market in a sense, misinterprets what happened then I have two pieces of the puzzle that I need for quicker rebound, and then you just get more leverage.
You know, you get more leverage using and the option because the volatility has also gone up. Side note, options pay you more when their volatility is higher. Okay? So. Um, when I did the first standard deviation calculation, it showed me that that would get us back to $6 88, 6 $6 86 cents. That’s still lower than the recent high.
So therefore, I’m thinking that’s not preposterous. It’s not a preposterous event for it to go back. Under its recent high. So that’s step one. And then step two, i, I use a platform called Option Strat , I looked only at an option that was long dated, so it was a leap.
It was a January 15th, 2027 leap. So I’m not dealing with any short term stuff. In fact, it’s a year and. A half, 1.6 years for my thesis to play out. And uh, and I selected a price target that would show me how much the option would go up if it got to this level of, uh, 6 86, but before it expired. So I thought, uh, what did I use?
I think 180 days. Like half a year, all I would need is several earnings calls, so it’s not even close to the full extent of the option. And when I selected that date and the price target, it tells me how much the option could go up by because options are sensitive to a bunch of the, the variables. And I got, uh, I got, it showed me it’ll be a 90% gain based on a move that was much less than 90%.
I. So all other things being considered equal. Even if I was wrong, using that particular 180 days, I would still have much more time left on the option to play out like a long-term investor would. So I thought this is exactly the moment that I wanted to take advantage of all of these. Uh. Items in sequence, and I felt as confident buying this as, as if I were buying shares outright.
And if I’m right, I’m just going to get a little more juice out of it.
[00:37:46] Luke: And if you were, like, if you, if your thesis played out and you’d sort of doubled your money as opposed to like, you know, gaining 30 or so percent, so the extra money you made potentially, then there’s like a second decision, you could actually then go and buy EOS stock with that if you felt it was a good long-term hold.
[00:38:05] Krys: Correct. Yes. Um, now the, the weird thing by this is just for those of you who follow our King of the Jungle portfolio. The only negative to this in my decision was that I was already overweighted in eos, so I really did not want more EO shares. I have more than plenty and I’m just gonna let that play out as it will.
So when I bought, uh, this option cost me 175 bananas. $1.75 per share that I control. Each contract is worth a hundred shares, so $175 and you know, we get, we add 200 bucks to our portfolio every month. So that was the, almost the entirety of my month’s wages, so to speak. I was like, hmm, do I really need to control an extra a hundred shares of eos?
So I talked myself into it because the setup I think was so favorable. Um, yes. My next decision is if I do, basically if I’m right, I will cash out. I won’t hold for the duration. I’m gonna cash out at some level, it might be a hundred percent, it might be 150 depending on what the news that caused the spike.
If I’m right.
[00:39:20] Luke: On the option where you are thinking this is like your strategy for your whole EOS position. If it gets to a certain level, you’re like, I’m selling everything
[00:39:27] Krys: Nope. This is just for the option.
[00:39:29] Luke: fine. Yeah, yeah, yeah, yeah. Okay. ’cause, ’cause that I would challenge, ’cause that kind of goes counter to like the ethos of being an
[00:39:37] Krys: Correct, correct. This is just for the option, but remember, you know, in our portfolio challenge, I’m controlling with this option a hundred shares. So if it goes up something, I don’t know, back to, its all time highs that’s already like, you know, 300, 400 bucks. Uh, I have other places in my portfolio to redeploy that 400 bucks that I think are, is a good spot.
So it’s a little bit of the parlay activity mentality, which, um, I don’t know. It’s in my toolkit. I feel confident doing it in this particular moment, but I also know there’s lots of moving parts. It could not go the way I think. The fact that it’s a leap expired in 27 gives me more confidence that this was the right move now. But I don’t know how it will unfold in total because I don’t know what other parts of my portfolio will do.
[00:40:32] Luke: Good. Thanks for sharing your rationale. Let’s, uh, see how that goes.
[00:40:35] Krys: And as a follow-up though, one last thing I. I know talking about this live can get confusing with options. There are charts and it, it, it, it’s advanced level stuff, let’s just say. So if you have a question about some of the other metrics I used or some of the other considerations I had to take in, in mind, please head over to patreon.com/wallstreet Wildlife, jump on our discussion board and I’ll be happy to answer whatever I can.
[00:41:02] Luke: Yeah, super. And as a reminder, like one of our Patreon tears, if you’re a jungle cat, uh, we disclose all of our own. Investment decisions, either you know, as we are making them or ideally in advance of making them. I’ll try and post whatever I’m doing, like same day, and then I’ll do the trade a bit later in the day.
So we’re trying to be super transparent on Patreon. I share stuff on X as well, but it’s usually like a couple of weeks lag.
[00:41:27] Krys: And also this is not financial advice. Do your own research.
[00:41:33] Luke: Precisely, precisely. Well, let me give some not financial advice as well. Cars, I did what turned out to be a bit of a short term trade, which is quite unusual for me. Um, I bought something in January and I found myself selling it in May, so that’s like
[00:41:52] Krys: a quick turnaround. Yeah.
[00:41:54] Luke: It’s pretty much overnight for me.
Right. My average holding period is. I think, depending how I measure it, like three or five years. And I own, I’ve had stuff I’ve owned for like 21 years. So anyway, uh, Remitly, um, ticker, RELY. So they’re, they’re like a, i, I own a bunch of FinTech companies, like Wise and Aen and I used to own Block, like Square and a few others.
Never really owned the big banks ’cause I don’t really. Like they’re, it is a legacy model and I think they’re gonna get their, or they’re having their lunch eaten by FinTech, but I’m always looking for FinTech options. Oh, Eubank Brazilian Neobank, like was also one I own today I’m a fan of. Around the same time as I bought Eubank, I also bought Remitly and Remitly Niche is remittances and remittances essentially.
Like an international transfer of money when you’re working overseas and you’re sending money home maybe to, you know, buy a house back home or to your family or your village or whatever it might be, but you’re remitting money back to where you came from and like practice is probably bad judgment on my part.
I thought I believed Mr. Trump, president Trump when he said publicly back in. Right, whatever it was November, December that he was gonna support, uh, H one B visas and overseas students, essentially, like you come and do your, to say degree at Harvard or somewhere, you get your doctorate. And then there was definitely talk about, and we’ll just give these guys like a visa.
So we keep the, like we’ve invested in them, we’ve trained them, we’ve given them a qualification, like these are the best and the brightest, let’s give them. Uh, the ability to work here and work for our companies and make our companies even better, like great policy. That makes so much sense. Um, and so I invested in Remitly on the back of that ’cause I thought, wow.
Can have like a whole bunch of like wealthy folk being supported and like increasing good immigration into the us. But no, it seems like that’s been, walked back pretty hard now. Uh, now the Republicans are in office in a couple of ways. Like there are, there’s a fairly de minimis. Tariff on remittances, which will hurt the company, but it’s not material.
It’s like 3% or something, but also a bunch of other actions, uh, around like canceling visas, sending students home, um, like really reviewing overseas workers. It like immigrants into the US quite hard. And we’ve seen a whole bunch of horror stories, some of which are true and some of which almost certainly aren’t, but certainly.
Like we’re seeing the Trump playbook, and I probably shouldn’t have believed that he was gonna be like a staunch supporter of immigration. So I’ve pulled out of that trade. ’cause I think the thesis is fundamentally broken.
[00:44:59] Krys: I think that even though for you it’s a short term ish trade, what you’re modeling
[00:45:05] Luke: I.
[00:45:06] Krys: is extremely important. I. You know, clearly what you based it on, and it doesn’t seem to be playing out, and I’m sure you’re missing a bunch of other, uh, variables that might even be in the trades favor. But it doesn’t matter. It doesn’t matter. You, uh, things changed. You, you made the call, you’re switching. I applaud it.
[00:45:25] Luke: I like the, I’ve, I’ve started embracing the
[00:45:28] Krys: I mean, it doesn’t have to
be more complicated than that in many ways, honestly.
[00:45:32] Luke: That’s it. Yeah, that exactly what I was about to say, like that I’ve lent into that idea of there’s the two complex pile, and if something. It’s just a bit unclear and muddy. Like I’m much happier just to dump it on the too complex pile and just walk away from it.
’cause there’s so many uncomplicated, great investment opportunities out there.
[00:45:51] Krys: I bet you that because of your poker experience, you know, I. Uh, you’ve practiced folding hands repeatedly. This is what the best poker players do. They just fold, even if they have good cards, probably makes it easier to fold even an investment that you had just invested in.
And I bet you a bunch of beginning investors would not be able to make this kind of trade. Simply because they had already call it, bought it, and they would justify holding it for longer with about bunch of what ifs and what abouts. So that kind of clear precision of action and thinking is what I want our listeners to really think about rather than the, the fundamental thesis of that particular company.
[00:46:39] Luke: Yeah, that’s a good point actually. I think like it is important. You have to be willing to admit that you are wrong and you’ve made a mistake or you know the things haven’t gone the way you expected for whatever reason. Maybe you misjudged it or maybe just the world turned out differently and you have, you have to own that and say, okay, like that was the wrong decision.
Let’s go a different path. And if you can’t do that, this is when you end up. Like doubling down on your losers and doubling down again and getting so overexposed to like a broken thesis. ’cause you can’t admit that you were wrong.
[00:47:14] Krys: Yeah. Uh, and in the poker analogy, you get dealt, I, I don’t, I’ve seen this so many times. You get dealt ACEs, so you bet big. But then the flop comes out, the three cards on the table, and they’re ugly. There’s a king. There’s a queen. They’re not the right color. And the number of beginning poker players that hold onto their ACEs because it was the best hand before the flop came out, and they cannot psychologically let go of the fact that it, is quantitatively no longer the best hand. Right? It’s just, it’s pure subjective, uh, um, bias towards what, uh, bias towards the past or something, whatever the.
Yeah,
[00:48:00] Luke: yeah. Like, like another another version of price anchoring like you’re anchoring on. On that decision you bought, the price you bought it at, and you’re like, well, it’s gotta come back. So you end up like chasing, chasing a loser, which is different to what we talked about with your EOS position because if you just looked at it in a vacuum, you could say, okay, Christoph is doing the same thing, like stock went down, he’s buying more.
But if it is, when you do it blindly without thinking and checking your thinking, when you just do it because the price went down, not because. The thesis is still robust, maybe even stronger, and you’re getting like a better value point and you’re taking like a longer view than the average market participant.
[00:48:41] Krys: A I.
[00:48:44] Luke: All righty. Very good. Well, good to, uh, good to catch up. I think we should probably, we’ve done well with your internet connection in deepest, darkest Poland, so we shouldn’t count our chickens too hard. And, uh, probably wrap this up cleanly. I.
[00:48:58] Krys: I would not say deepest, darkest Poland, uh, because I, I, uh, this country has has, but I would say rural promevo, foresty Poland. Yes. The fact that I have, uh, uh, working internet connection at all is a bit of a miracle.
[00:49:17] Luke: And listeners that that was essentially the detail of the invitation I got. That was as much detail as I had to plan itinerary around. So. All righty. Well, don’t get shot by your, uh, bear hunting uncle when you go off piece next week. Hope that’s gonna be fun though.
[00:49:39] Krys: I hope not to. I. Uh, fin chat.io/wildlife is where you should go to use fin chat.io, which is our FinTech platform of choice, where, uh, we both go to investigate all the numbers and financial charts.
[00:49:59] Luke: are you ready to become a beast of an investor?
[00:50:02] Krys: Your journey starts here.
