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.
I’m hosting a webinar entitled “Why Covered Call ETFs Suck and What to Do Instead” (More Info Below) January 15 2-3pm. Sign Up Here
Table of Contents
H.E.A.T.
The Next AI Trade Isn’t AI… It’s Washington Rewriting the Rules of Money
Here’s what this actually tells me: 2026 could be the year policy becomes a bigger driver than fundamentals for big chunks of Financials, Housing, and Crypto rails. The key tell is timing. Rulemaking takes forever, so year 2 is “make-or-break”—if major changes aren’t proposed by year-end, they likely don’t get finalized before the next inauguration cycle. And this administration moved unusually fast to get regulators in place, which means the “policy window” is open now, not in 2027. That’s why the market is sniffing out capital relief, stablecoin plumbing, open-banking data fights, and housing affordability tweaks as tradable catalysts, not just political noise.
The second tell is the “new fault line” risk: regulatory divergence + populism. If some regulators move faster than others, you get arbitrage (winners who can route around constraints)… but also fragility (rules that can be reversed, challenged, or weaponized in an election year). Populism is the sleeper risk because it creates bipartisan incentives to hit “big institutions” at the exact moment the market starts pricing in an easy, friendly regime.
Watchlist
(Not advice — this is a “what gets paid if this theme is right” map.)
1) First-order winners: “Capital relief + animal spirits”
Why: If big banks get a friendlier capital/stress-test posture (think: less punitive requirements), the fastest impact is buybacks/dividends, trading/IB confidence, and credit creation.
Watchlist
$JPM, $BAC, $WFC, $C (money-center beta to capital return + loan growth)
$GS, $MS (deal cycle + markets cycle torque)
“Tiering” beneficiaries to watch broadly: $PNC, $USB, $TFC (less headline risk than the biggest names, still levered to a friendlier regime)
What would make this not work: populism flare-ups, surprise enforcement actions into midterms, or a credit event that forces the pendulum back.
2) First-order winners: “Tokenization + stablecoin rails”
Why: The real crypto trade isn’t another meme coin. It’s crypto becoming a wrapper around traditional finance (tokenization) and the fight over whether platforms can pay interest/rewards on stablecoins (which is basically “who gets the deposits”).
Watchlist
$COIN, $HOOD (on-ramps + product distribution; they benefit if rules clarify instead of choke)
$CME (picks-and-shovels for regulated crypto activity if volume grows through legit pipes)
$V, $MA (don’t “die” from stablecoins—but this is where the market starts debating take rates and settlement rails)
$BLK (tokenization doesn’t need to replace Wall Street… it gets adopted by Wall Street)
What to watch next: any “market structure” style legislation momentum (even chatter matters), because it changes institutional comfort overnight.
3) First-order winners: “Housing boost” trades
Why: The easiest way for politicians to “help” housing is to reduce friction costs—loan-level pricing adjustments, FHA premiums, manufactured housing incentives. That can pull demand forward fast (and re-ignite affordability problems later).
Watchlist
Homebuilders: $DHI, $LEN, $NVR, $PHM
Mortgage/origination: $RKT, $UWMC
Title/transaction tolls: $FNF, $FAF
Manufactured housing angle: $CVCO, $SKY
High-octane, event-driven corner: $FNMA / $FMCC (only for people who understand this is political/structural volatility, not a “normal stock thesis”). The “window opens after midterms” framing is exactly why these can whip around on headlines.
4) First-order winners: “Private credit goes retail”
Why: If rules expand who can access private equity/private credit, that’s a distribution bonanza for alternative managers… until it isn’t. The upside is AUM growth. The risk is a default cycle that creates a political backlash and reverses the expansion before it fully lands.
Watchlist
Alt managers: $BX, $KKR, $APO, $ARES
“Income wrapper” exposure: $ARCC, $MAIN (BDCs can trade great… until credit turns)
My rule of thumb here: if the pitch is “private credit is safe yield,” run. If the pitch is “private credit is illiquid credit risk packaged well,” you’re thinking straight.
5) Second-order winners: “Open banking = data warfare”
Why: Open banking sounds boring, but it’s a profit pool migration: who owns the customer relationship, who owns the data, who owns the liability. If banks get disintermediated, the app layer wins. If liability gets ugly, security/identity wins. And the design of the rule determines which side gets paid.
Watchlist
Fintech/app layer: $SOFI, $PYPL, $SQ
Identity/security (the “liability hedge”): $CRWD, $PANW, $OKTA
The loser list (where people get surprised)
Fee-dependent banks that rely on customers being “stuck” (open banking is a slow leak on that model).
Weak underwriters / aggressive consumer lenders if CFPB rollback encourages bad behavior now that becomes legal/financial pain later (the “liability boomerang”).
Over-levered private credit wrappers if defaults rise and the political system decides retail shouldn’t have been sold illiquidity in the first place.
News vs. Noise: What’s Moving Markets Today
Trump was again the news of the day……
This, plus the announcement yesterday of a ban on institutional buying of single family housing suggests that home affordability is going to be a major focus going into the mid terms.
There is also a very good chance he gets an adverse judgement on tariffs soon. Either they get declared illegal, or the court impedes his ability to impose them.
Unclear what impact this would have on markets for the time being, but everything is pointing to lower interest rates.
Today is the first major data point of 2026 with the Jobs report coming at 8:30AM. It’s often market moving.
A Stock I’m Watching
Today’s stock is Caterpillar (CAT)……
Caterpillar (CAT) is one of the cleanest “old economy + AI” compounders because its AI leverage shows up where customers actually pay: uptime, fuel efficiency, and fleet productivity. CAT’s edge isn’t a flashy model—it’s the combination of (1) a massive installed base, (2) high-frequency machine/telematics data, and (3) dealer/service infrastructure that can turn insights into action fast (predictive maintenance, parts pull-through, and faster rebuild cycles). As autonomy and machine-vision creep deeper into mining and heavy construction (think semi-autonomous workflows, smarter dispatch, and failure prediction), CAT can capture value twice: higher equipment content/attach rates up front and a bigger, stickier aftermarket + software/services stream over time. If the market keeps treating CAT like a pure cyclical, the underwrite is that AI-enabled services + tightening labor markets + mining/infrastructure/grid buildout create a more durable earnings profile than prior cycles—even though you still have to respect the macro risk (construction slowdowns, commodity capex swings, China).
In Case You Missed It
First podcast of the year, we do a deep dive on income strategies with Dividend Degenerates……..
Everything should be a growth strategy… We’ve had podcasts on longevity… Imagine if you live till 180 and we have inflation and you’re not investing for growth. You’re screwed” -Matthew Tuttle
How Else I Can Help You Beat Wall Street at Its Own Game
Inside H.E.A.T. is our monthly webinar series, sign up for this month’s webinar below….
Why Covered Call ETFs Suck-And What To Do Instead
Thursday January 15, 2-3PM EST |
Covered call ETFs are everywhere — and everyone thinks they’ve found a “safe” way to collect yield in a sideways market. |
The truth? |
They cap your upside, mislead investors with “yield” that’s really your own money coming back, and often trail just owning the stock by a mile. |
Join me for a brutally honest breakdown of how these funds actually work — and what you should be doing instead. |
What You’ll Learn:
🔥 Why “high yield” covered call ETFs are often just returning your own capital |
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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