THE NUMBERS

STEALING SAVING TIME

Dear God,

Have you ever felt like you're constantly struggling against a rigged system? Life was never guaranteed to be easy. However, as minority entrepreneurs and hard-working professionals, the question inevitably creeps into our minds: "Am I the only one struggling with this?". It's easy to feel like the odds are stacked against you, and that success is out of reach. However, what if I told you there is no spoon, no system? What if I said you could bend this whole THING to your will?

That's my Afro Punk spin on the left's WallStreetBets' "eat the rich" movement, which culminated with the meteoric rise and fall of GameStop (GME) and Bed, Bath & Beyond (BBY) back in 2021, right before the crypto & NFT craze. This starkly contrasts the right's 2009 tea party movement, which all seems like a lifetime before the MAGA movement. But precarious American nationalism is a discussion for another time….🙄

However, today, it's time to turn the tables on the system by taking advantage of opportunities the system inadvertently created. I think one such option is buying into the BRICS now to hedge against future inflation returning to the States in the coming years. Suppose such a situation does develop and the Brazilin Real, Russian Ruble, Indian Rupee, Chinese RMB Yuan, and South Africa's Rand express a lopsided exponential growth. That situation would empower colonizers investors to secure significant amounts of equity to deploy stateside.

For example, a $100 investment could secure you 8,333 units of Indian Rupees. Growth to a ₹.0125 from the all-time low of ₹.0121 would render you $33.3... almost enough to half-fill your gas tank. This move is pure speculation, but routinely trading foreign exchange (forex) is no different from trading cryptocurrencies... or stocks. BUY LOW - wait - SELL HIGH. You are buying into the risk that your "wait" period will be comparatively more productive than your next best investment, like paying down that 3% mortgage or 6.5% student loan despite the Prime Rate currently set at 8% ( 1.5-5% cheaper dollars). There is no such thing as a free lunch, as seen by how the Fed's rampant printing of U.S. dollars cut into consumer buying power with increased inflation.

The Bureau of Economic Analysis, among others, is lamenting that US GDP only grew by 1.1% in Q1 of FY2023 vs Q4 2022’s 2.6% growth. However, opportunities like this remain and will forever remain because inflation will indirectly BITE into the equity of alternative branches of the U.S. government every time Congress decides to raise the debt ceiling or the Fed practices quantitative easing—this time around, the U.S. Department of Education is paying the bill. This may be one of several new transfer frontiers, ….. like Thor eating children.

But today, I want to discuss another opportunity – First Republic Bank (FRC). (You think we wouldn’t talk about this mess?). This San Francisco-based lender has been teetering on the edge for WEEKS and may finally implode. Despite a $30 bn solidary investment from the likes of JP Morgan, FRC is in the same boat as former competitors Silicon Valley Bank and Signature Bank, with a highly concentrated customer base, excessive amounts of uninsured deposits, and loads of unrealized losses on the bonds and treasuries it holds.

DA Banks

According to The Real Deal (2023), "Some of its mortgage borrowers include Goldman Sachs President John Waldron, who took out an $11.2 million mortgage in June 2020; R. Lawrence Roth, a board member at Oppenheimer; and record label mogul Todd Moscowitz. All held loans with 10-year, interest-only periods and rates starting below 3 percent."!

Rumors are swirling that the bank is looking to cut a deal to sell assets, but the White House isn't interested in facilitating a bailout. The Federal Deposit Insurance Corporation is also considering downgrading the bank's debt, which would limit its access to essential Federal Reserve loans. Shares of the stock have fallen nearly 30% (FRC: $6.43 - 4/27/23: 12:46:48 PM UTC) , and the stock's trading has been halted numerous times as its rapid decline triggered volatility-triggered timeouts by the New York Stock Exchange.

The outlook for the bank is NOT GOOD, but it's not over until it's over. There are still some narrow paths forward. One option is that the bank will try to sell some of its loans and securities at the same cost they bought them for. In exchange, the buyer would receive a preferred equity interest in the company. That will be a tough sell since those assets would sell for well above the market rate.

“But Hendy”, (You may ask) “how does this affect me.... specifically, who do I make money off this?” Great question! There's another option: options. Now I am not a financial professional, just a curious mind. It does appear to me there is an opportunity of shorting the stock FRC using put or call options depending upon one's risk tolerance.

The Short Put Play: FO DA BEARS

The put play would involve purchasing a put option contract providing the right to sell the FRC stock at a strike price equal to or higher than the Stock price at the time of purchase (FRC: $6.43 - 4/27/23: 12:46:48 PM UTC). With FRC stock currently trading at $6.43, investors can take advantage of this low stock price by purchasing put options with a higher strike price, allowing them to sell the stock at a profit if the stock price falls any further before the expiration date.

The Short Call Play: FO DA BEARS

The call play would involve first buying a 100-unit bundles of FRC and then proceeding to selling the option for a buyer to call and purchase these shares at a strike price equal to more significant than the stock price used to secure the initial units (FRC: $6.43 - 4/27/23: 12:46:48 PM UTC). Ideally, the revenue generated equals or exceeds the cost of securing the shares to cover your position. Assuming the stock price falls below the strike price before the expiration date, you would profit from the proceeds of selling the options. If the FRC price spontaneously rises to $100, those stocks would already be in hand, limiting the loss. Selling uncovered call options to cut cost is also possible. Still, I would prefer to bypass even the POTENTIAL for falling into the pit of infinite debt.

An inverse lower-risk play would be to purchase call options (FRC: $6.43 - 4/27/23: 12:46:48 PM UTC) and pray the bank spontaneously rebounds back to its historic neighborhood of $100-$200. However, such an investor should also consider the potential for the stock price to rise, resulting in the call option expiring worthless. It is also essential to consider the risk of government intervention, such as the possibility of the government seizing FRC as with SVB, which could result in losing the investment.

This opportunity requires thorough research and analysis of market trends and stock performance to make informed decisions and maximize potential profits. However, As with any investment, it is crucial to manage risks effectively to minimize potential losses and maximize profits. Past performance can not predict future results.

Conclusion

Remember, as a minority entrepreneur working professional, you may face more obstacles than most. But there is no spoon. You can bend anything to your will. It's time to take advantage of the opportunities in the market and turn the tables on the system when feasible. Let's bend it to our will and make it work for us.

With Gratitude,

Hendy Saint-Jacques

Creator & Chief Joy Spreader

💸

THE TRENDS

🤓TECHNOLOGY:  Stay Calm. Black Mirror Season 6 is Coming.. I said to stay calm!

🧠MENTAL HEALTH:  ET says YOU OWE YOU

🤑VENTURE CAPITAL:  Is the US Losing Steam?

“What’s the world for if you can’t make it up the way you want it?”

-Toni Morrison

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