WHEN INVESTING BECOMES A LIFESTYLE YOU WEAR IT!

NEW MERCH ALERT - WEALTHY RED - Limited Quantities - Grab Yours Today! CLICK HERE

We are launching Investment Dojo Research. It will feature a daily market driven cream report on the research site. If you would like to be on the list for the launch, I will be walking all participants through my most profitable screens. All in attendance will receive a FREE trial and a 10% discount for every referral.

The Investment Dojo Research website started out as a personal tool because of the hours it took to do quality research. I needed to consolidate all the resources, plus I realized none of the screening metrics I used to find my biggest winners were available in the market, so I decided to create it.

If you would like to present while I do a live zoom walk through, send me a direct message. Once we get closer to the launch date I will send out an email and text. Thank you for being such faithful readers. We are small but mighty.

FYI - The website is incredible; thank me later…KD

A Crazy Year In The Rear view…

/

If 2025 had a chart, it would be a heart monitor with a God‑mode Fed filter overlaid on top.

The US500 (S&P 500 proxy) is closing the year around 6,900, up roughly 16% versus this time last year, because earnings “resilience” is Wall Street’s preferred religion as long as multiples cooperate.

Investors who swore they were “cautious” in January somehow ended up long every AI proxy by December. The benchmark climbed more than 16% year over year into late December, even as everyone on TV insisted a recession was “just six months away” for the fifth year in a row.

Behind the scenes, the real degenerates weren’t in meme stocks; they were in the yen carry trade. Borrow at near-zero in yen, lever up into US equities and EM risk, and call it “macro strategy” instead of what it was: sophisticated carry-addiction.

Then the Bank of Japan finally woke up, nudging policy rates toward 0.75% and signaling that the “zero forever” era was over.

Funding costs rose, the math on borrowing yen to chase higher yields deteriorated, and suddenly an estimated hundreds of billions in carry positions started to look less like a free lunch and more like a forced‑liquidation waiting room.

For the very rich, volatility became a feature, not a bug.

• They bought downside hedges with loose change.
• They bought AI growth with conviction.
• They bought narratives with zero shame.

The market’s wealth effect floated the top decile while everyone else watched asset prices levitate on their phone screens, wondering how their wage growth missed the rally.

Policymakers announcing “discipline” while waving through one of the most aggressive tax restructurings in recent memory.

In July, the One Big Beautiful Bill Act was signed into law, reshaping brackets, deductions, and credits with a smile and a slogan about “working families.”

The seven federal tax brackets remained in place, with the top marginal rate staying at 37% for high earners north of roughly $626k (single) or $751k (joint), but the real action was in targeted cuts and credits.

Independent analyses showed what everyone in Palm Beach already knew: a massive share of the benefits skewed to high‑income households and business owners, adding trillions in net tax cuts and hundreds of billions per year to the deficit over time.

The richest quintile, particularly the top 1%, captured disproportionate benefits from extended rate cuts and pass‑through breaks, while low‑income Americans saw little change once payroll taxes and limited income tax liability were factored in.

Translation for the rich:

• Lower effective rates on large incomes and business profits.
• More after‑tax cash flow to recycle back into assets already pumped by liquidity.

Translation for the marginalized:

• A system that still calls itself “progressive” while distributing the bulk of incremental gains to those who already own most of the capital.

“Liberation Day” wasn’t a holiday; it was a balance‑sheet punchline — the moment federal interest costs rivaled or surpassed politically sacred line items like defense, reminding everyone that fiscal “freedom” is now heavily financed at scale.

The response was not austerity but creativity: more branded legislation, more targeted credits, and more optimistic projections.

The mid‑year shutdown turned into an encore performance of a familiar play:

• Hundreds of thousands of workers caught in the crossfire of brinkmanship.
• Markets largely unbothered, taking comfort in the assumption that no matter how loud the fiscal theatrics get, funding the Treasury remains a national hobby.

The market looked at Washington’s chaos and saw one thing: as long as the debt machine runs and the central bank remains more therapist than executioner, risk assets live to rally another day.

Now the uncomfortable part: the three worlds living under the same set of tickers.

For the ultra‑wealthy, 2025 was another banner year powered by:

• Double‑digit equity gains via broad indices and AI‑adjacent bets.
• Tax architecture that locked in favorable rates on high incomes and pass‑through profits.• Policy inertia that treats asset stability as a national security objective.

They talk about “uncertainty” on panels while their portfolios quietly front‑run any policy designed to protect “confidence.” Their biggest stressor was whether the next BOJ move would ding their levered carry sleeves more than their CIO’s talking points.

The middle class, by contrast, received the volatility without the upside leverage.

• Higher prices for essentials, with no equity portfolio large enough for the wealth effect to feel real.
• A tax code where individual-level adjustments mattered far less than the structural tilt toward capital owners.
• Job security tied to cyclical sectors that swing when global risk sentiment shifts on yen or yield curve chatter.

In other words, they lived in a regime where macro events showed up as stress, not as opportunities.

The marginalized poor continued to experience the financial system as a combination of:

• Algorithmic efficiency (faster approvals, more automation).
• Limited access to meaningful ownership of appreciating assets.
• Public policy narratives that promise inclusion while routing the largest dollar benefits to those already in the top income brackets.

Think of it as “financial optimization without equity participation.” The system works on them, not for them.

No good year‑end recap is complete without two archetypes:

the superpower and the street‑level trader.

The US‑China relationship spent another year oscillating between “strategic competitor” and “reluctant partner,” with trade, tech, and capital flows all wrapped in geopolitically flavored PR.

Supply chains “de‑risked” by routing through friendlier jurisdictions, while semiconductor policy became a proxy battlefield for economic dominance and U.S greed.

For global investors, the takeaway was simple:

• Political risk premium are now permanent for China‑linked exposures.
• Capital keeps sneaking toward neutral hubs and diversified Asia plays.

The standoff didn’t blow up portfolios outright, but it raised the long‑term cost of pretending globalization is apolitical.

 WHEN INVESTING BECOMES A LIFESTYLE YOU WEAR IT!

NEW MERCH ALERT - BILL GATES BLACK - Limited Quantities - Grab Yours Today! CLICK HERE

Wild Options Bill, The 90% Loser…

Bill is fresh out the wrapper, still has the “Welcome to Trading” email starred in his inbox, and already thinks theta is a new Ozempic competitor.

He does not understand the Greeks, but he sure knows how to hit “Buy to Open” on weekly zero‑days like it owes him money.

Bill’s playbook:

• Short-term out-of-the-money calls on Tesla “because Elon.”

• Lottery-ticket Palantir calls around earnings “because AI and government contracts never lose, bro.”

• Sizing: 100% of available cash minus what went to the course he bought from a guy who makes more off Gumroad than gamma.

Bill’s trading North Star is a social guru whose P&L is mostly “PDF downloads”, “ChatGPT” and “high-converting funnels,” that makes more money off of selling book chapters than any investment he has ever himself.

The guru’s content is 5% charts, 95% catchphrases: YOLO, “get rich or die trying,” or “the market money is a printer”, meanwhile everything is rented.

• Across global derivatives markets, north of 80–90% of active retail traders lose money over time; most are gone within 1–2 years.

• One regulator data set showed over 90% of individual F&O traders losing, with average losses large enough to wipe out modest accounts entirely.

Bill hears “90% lose” and thinks he’s in the 10% because he watched three YouTube shorts on “institutional order flow.”

From an institutional perspective, retail in short-dated options is not “competition”; it is order flow.

Studies around earnings and high-volatility events show retail options traders reliably transfer wealth to wholesalers and market makers.

Here is the uncomfortable scoreboard in plain English:

On top of that, research shows:

• Retail options turnover has exploded, with retail accounting for roughly half or more of some short-dated flows

.• The same flows generated multi‑billion‑dollar profit opportunities for market makers, especially around the meme‑era and earnings windows.
Bill is not “outsmarting Wall Street”; he is donating to Citadel the way boomers donate to public radio.

Bill’s first big romance is Tesla weeklies.
He buys near-the-money TSLA calls expiring Friday because “it always bounces” and the guru told him “options give you leverage, so you don’t need much capital to get rich.”

Meanwhile:

• Implied volatility is already juiced going into his trade; he is paying top-shelf premium plus a fat spread.

• TSLA goes up 1–2%, but implied volatility bleeds and time decay hits; his calls still lose 20–30% while the stock “works.”

On the Institutional Flipside:

• Market makers quoted him a wide bid‑ask spread and immediately hedged with stock or other options, clipping near‑riskless edge.

• Their aggregated book across thousands of Bills is a smooth P&L curve; his account is a cardiogram.

Then comes the real gut punch: one macro headline, Tesla gaps down 4% intraday, and all his weeklies go to near zero.

Bill learns, in one afternoon, that short-dated gamma cuts both ways and that “just roll it” is not a risk-management strategy.

Next, Bill discovers Palantir. “Government contracts, AI, data, this is like Tesla 2.0 but cheaper.” He loads PLTR calls into earnings, full send, because the guru says “this is asymmetric risk, bro, limited downside, unlimited upside.”

Here is what the institutional data says about that exact behavior:

• Retail traders piling into options around earnings lose 5–9% on average, and 10–14% when volatility is especially hyped.

• Across one large sample, those behaviors translated into roughly $3 billion in retail option losses, much of which went straight to wholesalers and market makers.

Earnings day for PLTR:

• The company posts “good, not insane” numbers; implied volatility was pricing a moon landing, reality is a regional flight.

• Stock barely moves or even drifts slightly up, but IV crush bulldozes the premium; Bill’s calls are down 40–60% on “good news.”

Bill’s inner monologue: “How can I be down when I was right on direction?”
The answer: you traded the wrong thing – you traded volatility and time while thinking you traded headlines.

The Bodies in the Cemetery, when the dust settles, statistics look a lot like Bill’s brokerage history:

• Retail day traders: 80% quit within two years, with nearly 40% dropping out after only one month.

• Across multiple markets, well over 80–90% of high‑frequency retail options traders end up net losers after costs.

• In at least one massive F&O sample, over 90% of individual traders lost money; the median “career” ended in a blown-up or abandoned account.

This the come to the long-term daddy moment:

• Deletes the app or moves to “long-term investing” after incinerating a few paychecks.

• Tells friends “options are rigged” instead of “I treated leveraged derivatives like scratch-offs and called it a strategy.”

Meanwhile, market makers keep posting positive years because their entire job is to:

• Price volatility better than Bill.
• Harvest spreads and rebates at scale.
• Never, ever YOLO.

To them, retail is not an enemy. Retail is Sunday dinner, leftovers, and dessert. Wild Options Bill is the extra helping of mac and cheese.

If Bill ever wants off the menu, the path is boring: understand the Greeks, respect position sizing, stop treating momentum like a personality trait, and stop taking risk lectures from someone whose real edge is email conversion rates.

WHEN INVESTING BECOMES A LIFESTYLE YOU WEAR IT!

NEW MERCH ALERT - BUY THE DIP NAVY - Limited Quantities - Grab Yours Today! CLICK HERE

Quick Links…

Holy Smokes….

It’s All Your Fault…

Thank you for reading, we appreciate your feedback—sharing is caring.

Kevin Davis Founder of Investment Dojo and Author of The C.R.E.A.M. Report