Good discipline: miners are leveraged to the metal both ways, so the time to rebuild cash is into strength, not on red days like this. Rebalancing on a schedule rather than on emotion is what keeps that rule honest.
May I suggest you learn how to roll your puts forward. Time will be on your side once you go the roll route. On the other hand, remember to never sell a put on a stock you do not want to own.
It's a good idea for some. I roll rarely. Dealing with two spreads concurrently, and getting on the wrong end of both is possible and maybe probable. My accounting software and the brokerages don't get along when there is a roll. It always twists up the bookkeeping. So I usually take the assignment and then control the shares instead of rolling and then not control the cash.
I know that Doug & Matt are geniuses who walk on water and are legends in their own minds; but you might want to tell them that their dog shit penny gold mining stocks are dead money until there is a sustained drop in petroleum distillate prices.
Such timely excellent advice. I totally agree and have long followed your basic discipline, but I'm sure a lot of your readers are sort of panicky and reassurance and friendship are always appreciated from all good docs. Thanks.
I rather optimistically deployed a chunk of my collateral not long after your options wheel article and got assigned on all three stocks, including Kinross. They were clobbered last week after their latest production outlook; that was after a steady drop in line with the gold price. I guess I'm going to be holding these for quite some time, but it's all part of the learning curve.
I'm sorry. The option wheel mildly moderates the effects a declining market by picking up the premiums on the way down, but declining markets still suck that's for sure. I sold some KGC puts this morning. And some calls on a part of the market that was staying up for now. I've definitely accumulated a few dogs in the accounts from assigned puts that went upside down. I've never closed those positions. But I can often (or at least sometimes) sell far out of the money calls for a nickel each week Not anyones happy space. On the flip side, I can sell puts at these lower prices and gradually make up for the higher entry price earlier. If the relevant stock comes back up that is. The key thing to remember is to sell the options for the premiums, but only sell puts for stock that you are happy to buy at the strike. If it goes down, it goes down whether or not you acquired it through an assignment or standard open market purchase. It just has that slight moderation of having paid you a premium on the way down. All that being said, I am very sorry that your experience with KGC was shite so far.
That is completely on me. I allocated a bit too much of my collateral the other week instead of holding enough back for a scenario like this. I knew the risks but didn't expect another market correction to hit quite so soon. It was a miscalculation on my part, lesson learned!
Good discipline: miners are leveraged to the metal both ways, so the time to rebuild cash is into strength, not on red days like this. Rebalancing on a schedule rather than on emotion is what keeps that rule honest.
https://paretoinvestor.substack.com/p/pareto-portfolios-update-oct-2026-bd1
Own quality while red-screen days keep filtering weak bids.
May I suggest you learn how to roll your puts forward. Time will be on your side once you go the roll route. On the other hand, remember to never sell a put on a stock you do not want to own.
It's a good idea for some. I roll rarely. Dealing with two spreads concurrently, and getting on the wrong end of both is possible and maybe probable. My accounting software and the brokerages don't get along when there is a roll. It always twists up the bookkeeping. So I usually take the assignment and then control the shares instead of rolling and then not control the cash.
I know that Doug & Matt are geniuses who walk on water and are legends in their own minds; but you might want to tell them that their dog shit penny gold mining stocks are dead money until there is a sustained drop in petroleum distillate prices.
Well that’s not coming anytime soon.
Well then. I'll be sure to tell them.
Excellent, excellent essay. Thank you.
Such timely excellent advice. I totally agree and have long followed your basic discipline, but I'm sure a lot of your readers are sort of panicky and reassurance and friendship are always appreciated from all good docs. Thanks.
Thanks, Dad!! Sir, may I have another?
Great article for a morning like today!
I was already lining up trades to spend some "dry powder" on under-allocated mining positions. Also gonna scoop up some physical gold
I rather optimistically deployed a chunk of my collateral not long after your options wheel article and got assigned on all three stocks, including Kinross. They were clobbered last week after their latest production outlook; that was after a steady drop in line with the gold price. I guess I'm going to be holding these for quite some time, but it's all part of the learning curve.
I'm sorry. The option wheel mildly moderates the effects a declining market by picking up the premiums on the way down, but declining markets still suck that's for sure. I sold some KGC puts this morning. And some calls on a part of the market that was staying up for now. I've definitely accumulated a few dogs in the accounts from assigned puts that went upside down. I've never closed those positions. But I can often (or at least sometimes) sell far out of the money calls for a nickel each week Not anyones happy space. On the flip side, I can sell puts at these lower prices and gradually make up for the higher entry price earlier. If the relevant stock comes back up that is. The key thing to remember is to sell the options for the premiums, but only sell puts for stock that you are happy to buy at the strike. If it goes down, it goes down whether or not you acquired it through an assignment or standard open market purchase. It just has that slight moderation of having paid you a premium on the way down. All that being said, I am very sorry that your experience with KGC was shite so far.
That is completely on me. I allocated a bit too much of my collateral the other week instead of holding enough back for a scenario like this. I knew the risks but didn't expect another market correction to hit quite so soon. It was a miscalculation on my part, lesson learned!