I’ve been a trader and investor for 44 years. I left Wall Street long ago—-once I understood that their obsolete advice is designed to profit them, not you.
Today, my firm manages around $4 billion in ETFs, and I don’t answer to anybody. I tell the truth because trying to fool investors doesn’t help them, or me.
In Daily H.E.A.T. , I show you how to Hedge against disaster, find your Edge, exploit Asymmetric opportunities, and ride major Themes before Wall Street catches on.
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Disclosure Day: A Playbook For Investors If The Government Confirms It Has Alien Technology
On February 19, President Trump started the countdown to potentially the biggest government disclosure in history:
March 19, 2026 2pm EST
Replay will be sent out after the webinar to all registered attendees.
H.E.A.T.
There’s a new corner of the market forming that most investors are going to misunderstand at first glance — because it looks like a stock (it has a ticker, trades like an equity, sits in your brokerage account)… but it behaves like credit.
Call it digital credit. Not because it lives on a blockchain. But because the “bond” is being distributed on equity rails — with exchange tickers, daily liquidity, and (most importantly) a dividend that can be reset frequently to manage the price.
Two tickers are the cleanest case studies right now: STRC and SATA.
They’re not “safe.” They’re not “cash.”
They’re something new: a high‑yield credit instrument engineered to trade around par.
Here’s the playbook — and the trap.
The core idea: “price‑managed” yield
Traditional bonds have a maturity date. Their price moves around because the yield required by the market moves around.
These “digital credit” structures try to flip that.
Instead of letting the price float freely, the issuer has a mechanism to change the dividend rate frequently — with the stated goal of nudging the market price back toward a target level (typically $100 par).
That’s the pitch:
Double‑digit yield
Paid monthly
Designed to trade near $100
Accessible like a stock
That’s also the risk:
You are not buying an insured bank product.
You’re buying preferred stock — junior in the debt capital structure, perpetual (no maturity), and reliant on the issuer’s willingness and ability to support the mechanism.
STRC: “high‑yield credit” from Strategy — but read the fine print
STRC is Strategy’s (MicroStrategy’s) listed preferred stock that the company itself frames as “Short Duration High Yield Credit.” It pays monthly dividends and the dividend rate is adjusted monthly with the explicit intention of encouraging the security to trade around $100.
Mechanically, STRC is Variable Rate Series A Perpetual Stretch Preferred Stock with a $100 stated amount / liquidation preference. Dividends accrue at a variable annual rate (set by the company) and are payable monthly. The issuer can adjust the rate monthly, and it has described the intent clearly: cut the rate if the price is above $100, raise it if the price is below $100.
A few details matter a lot:
Dividend flexibility (with constraints): Strategy can change the dividend rate monthly, with limits on how fast it can cut the rate and a floor tied to SOFR (per the security’s terms).
Cash-only dividends: STRC dividends are payable solely in cash, and unpaid dividends can accrue compounded dividends.
Issuer call risk: Strategy can redeem shares (in whole or part) at $101 plus accrued dividends (and there are constraints around partial redemptions).
The big red flag for “income investors”: Strategy explicitly states it expects to fund cash dividends on STRC primarily through additional capital raising (including ATM issuance of common stock and other dividend-junior stock).
Not secured by Bitcoin: The company also says plainly that the preferred securities are not collateralized by its Bitcoin holdings and are “subject to our credit risk.”
So the clean way to understand STRC is:
You’re lending against the issuer’s balance sheet and capital markets access — not buying a “bond backed by Bitcoin.”
That can work beautifully in a cooperative market. It can also break fast in a disorderly market — because the whole premise depends on the company being able to keep funding itself and supporting the dividend mechanism.
SATA: a similar “digital credit” concept — with a reserve and a penalty box
SATA is Strive, Inc.’s Series A Perpetual Preferred Stock (also $100 stated amount) and the structure is clearly designed with the same goal: keep the price in a controlled range by adjusting the payout.
Key pieces (and why they matter):
Monthly dividends: Dividends accrue daily and are payable monthly.
Price targeting: The company explicitly says it expects to adjust dividends monthly with the goal of keeping SATA in a $99–$101 trading range.
A “dividend reserve”: Strive says it expects to deposit $12 per share (designed to cover the first 18 months of dividends at 12.75%) into a dividend reserve shortly after closing.
If they don’t pay, it gets ugly: If a dividend isn’t paid on time, the unpaid amount compounds at 20% per annum (per their disclosed terms).
Redemption economics: Strive indicates a redemption price of $110 plus accrued dividends if the company elects to redeem after the Nasdaq listing.
Bottom line:
SATA is “digital credit” with a visible pre-funded runway (the reserve) and a harsh penalty if payments slip — but it’s still preferred stock, not a bond.
And just like STRC, the entire structure ultimately rests on issuer strength and access to capital.
The “digital credit” trade: why it’s clever… and why it can blow up
Why it’s clever
It packages high yield in a format investors actually buy.
A huge portion of modern markets is distributed through brokerage apps and equity tickers. Preferreds fit that pipe.It creates a “price magnet.”
When a security is designed to gravitate toward $100 through dividend resets, it can behave more like a stable-priced instrument than traditional perpetual preferreds — especially in calm tape.It’s a financing hack for the issuer.
If the market accepts these instruments, issuers can raise capital without selling common stock at the worst time — and can keep the story alive by adjusting the yield and issuing more near par (STRC explicitly discusses issuing around $99–$101).
Why it can blow up
There is no law of physics keeping it at $100.
This is not a money market fund. It’s not insured. The “pin” is behavioral and financial.In stress, the required yield can jump faster than the issuer can respond.
If the market suddenly demands 18% to hold the risk, and the issuer can’t (or won’t) pay 18%, the price can gap down. The mechanism becomes a spotlight on weakness, not a shield.You’re low in the capital stack.
These are preferred shares — they sit below debt. If the issuer’s balance sheet is pressured, preferred holders feel it quickly.Some payouts are effectively funded by capital markets.
For STRC, Strategy discloses it expects to fund dividends largely through additional capital raising activities. That’s not inherently “bad,” but it is fragile if the market window shuts.
How I’d frame risk/reward
Reward:
Digital credit is basically trying to give you junk-bond yields with a par-anchored trading psychology — paid monthly — inside a stock brokerage account.
Risk:
The price stability is conditional. If the issuer’s access to capital tightens, the “$100 magnet” can turn into a trapdoor — because when confidence breaks, preferreds don’t trade like bonds… they trade like liquidity instruments.
What to watch (simple checklist)
If you want one clean way to track whether this corner is “working” or “breaking,” watch:
Does the price stay near the issuer’s target range (STRC ~ $100; SATA $95–$105)?
Are dividend resets behaving as advertised (up when price sags, down when it floats)?
Does issuance accelerate (more shares at/near par) or stall (window shuts)?
Any shift toward non-cash payouts (especially relevant for SATA’s ability to pay in-kind)?
News vs. Noise: What’s Moving Markets Today
Stocks continue to get whipped back and forth on news out of the Middle East.
Continue to keep an eye on oil prices……
We had a guest on the podcast last week who called oil prices “nature’s tax”. Fitting description. More interesting at this point though are rates…..
Remember, it was the bond vigilantes that caused Trump to cave during Liberation Day.
Among all the carnage in other areas of the market, it is interesting to see Bitcoin hanging in there…..
In a war you would expect gold to do well and Bitcoin to possibly suffer, yet gold is slightly negative for the month, while Bitcoin is decidedly positive. I would suspect investors have been flocking to gold, using the war is good for gold playbook, and selling Bitcoin. Remember, markets will do whatever they need to do to mess up the most people possible. One reason we suggest owning gold AND Bitcoin…..
A Stock I’m Watching
Today’s stock is KLA Corp (KLAC)……
It had an undercut and rally the other day at it’s 50 day moving average.
The setup into KLA’s Investor Day (3/12) is attractive because it should pull the conversation away from recent “external noise” and back to the structural reason KLAC deserves a premium: it’s the highest-quality way to own multi-year AI-driven inspection & metrology intensity. As chips get larger, more expensive, and more complex (more design diversity, tougher steps, tighter tolerances), the number and importance of inspection/measurement steps rises—meaning KLA can outgrow WFE while maintaining best-in-class margins and facing limited China competition relative to other semicap franchises. If management nudges its multi-year revenue/EPS CAGR targets higher (even just +100–200 bps), it reinforces the idea that AI isn’t just pulling forward wafer demand—it’s structurally increasing the “checks and controls” required to manufacture advanced silicon at scale. The countertrend angle: semicap has been treated as “high beta / source of funds” recently, but KLAC is the rare name where cycle + structural intensity can coexist, and an Investor Day can act as the catalyst to re-center multiples around durability rather than pure cyclicality.
We own KLAC in UFOD
In Case You Missed It
The ETF Innovator Challenging Wall Street | Matt Tuttle on Themes, Crypto & the Future of Investing
The H.E.A.T. (Hedge, Edge, Asymmetry and Theme) Formula is designed to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.
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