📈 How much do you make #5

• Traded $35K into $10M in ~2 years

• Makes ~$69K/yr

• Founder of AfterHour

• Famous on wallstreetbets for yoloing all-in on individual stocks

What do you do professionally and how much do you make?

Online, I go by Sir Jack, short for Sir Jack A Lot. That’s my username on Reddit (52k followers) where I became pretty well known within WallStreetBets for yolo-ing all-in one single stock at time and traded my way from $35K to $8M in 21 months.

Currently, I am the founder of a consumer fintech startup called AfterHour and I make $69,000 a year.

$69k per year is a very specific salary.

Yeah, so this is the salary I pay myself as the founder of a startup. California has a minimum salary for exempt employees of $64,480 so I basically pay myself a nice round number above that to meet the minimum threshold.

Since I traded my way to $8M through meme-stocks during the crazy pandemic bull market, I’ve actually been withdrawing from those funds to support my living and complement with my salary.

The funniest part is that all the money is in my 401k so there’s pros and cons. The pro is no capital gains taxes to pay each year since it is designed as a retirement account. Cons are that withdrawing before 59½ years old incurs a 10% early-withdrawal penalty.

But because of the crazy gains and the fact that I’m working on my startup full-time, I’ve decided that this 10% penalty is worth it and view it as an investment (to pay for the opportunity to start a startup).

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Monthly expenses

My biggest expense by far is my mortgage. In 2021, I was betting on high inflation in the years to come and figured the best way to take advantage of this was to lock in a huge fixed-rate loan.

And I mean HUGE. I ended up getting a $3.7M mortgage on a $5M home at 3% for 30 years.

So, that mortgage costs me… $16K/month. Other living expenses are maybe like $3-5K on food, services, entertainment, the occasional toy, etc. It’s mostly food tbh, love my popeyes, tendies with cajun fries, and overpriced insta-worthy tiramisu.

Asset allocation

So after all the wild insanely high-risk swing trading the past few years, I’m now ultra-conservative and put the ~$7.5M now parked in index funds (still in the 401k).

Exactly half is in VOO and half in VGT.

VOO is basically Vanguard's version of the SPY index fund, and VGT is a more tech-focused index fund like QQQ. If you look at the actual holdings I’m in, it gives me really high exposure to Apple and Microsoft (about 50%), so you could say I'm still pretty bullish on Big Tech.

And I have like maybe $40K in liquid cash at any given time. That’s about it.

How much do you withdraw from your 401k per month to cover expenses?

It's variable, I sell $50K whenever my savings get low. After minimum 22% withholding, only $39K actually hits my account. I do this every 2-3 months-ish to pay for living expenses. I also try to time it when the market is up.

Now that you’ve amassed several million, have you considered working with a financial advisor?

Yeah, I began working with one during my break in between things to tackle some urgent matters. Specifically, I found a fee-based fiduciary where I paid a flat-fee for a year to get as much advice as possible.

I also found a really good tax person I want to work with for years. So now they're both just a text away.

I have a pretty good idea of how I want to allocate my capital so I leverage these professionals mostly for the nitty-gritty questions. I like to keep things simple and in my control so I don’t rely on them for actual money management.

Sir Jack’s Trading Journey

Tell us about WallStreetBets.

WallStreetBets is a subreddit dedicated to wild trading ideas. I personally believe that no one knows what the hell they're doing when it comes to stocks and WSB is the first place I’ve ever been in where everyone just admits it as fact, and it was really refreshing.

Essentially, members of WSB view the market as an open casino. It seems as if a whole generation gave up on the American Dream of working hard and is fed up and instead wants to gamble as though the market is a casino.

And the sweet sweet gain and loss porn, it’s thrilling to see!

From $35K to $8M in 21 months is an incredible story. Can you walk us through all this?

Sure, I could start with the birth of Sir Jack; that's a starting point. There's a little bit of a back story about how I kind of paid my WSB tuition and lost a whole bunch of money in crypto and playing options, but really, the birth of Sir Jack was in February 2020.

That’s when I discovered my company’s 401k plan allowed single stock trading and decided to yolo everything, which was $35K at the time, into a single stock. It was $APT, or Alpha Pro Tech, a producer of facemasks based in Salt Lake City, UT.

People were beginning to talk about Covid, and facemasks started becoming more and more common, so I found an American company that produced face masks and I was like “hey, this is kind of interesting. Why not?” and I basically threw my entire 401K into it. I left it there for about a month, during which it nearly tripled and I then had $90K.

So, $APT was like the gateway drug, then how did you go from $90K to $8M?

So, I basically swing-traded both sides of the healthcare / recovery stock swing cycles of 2020. When one went up, usually the other went down and I kept trying to catch both upswings.

The next two stocks after APT were CODX (a Covid testing company) and Norwegian Cruise Line.

I doubled my money on CODX leading up to their earnings (and sold 10 min before the call. Buy the rumor, sell on news!)

And then I noticed NCLH had been decimated and was down nearly 85%. People were pricing in bankruptcy but I didn’t believe that was possible. I believed it would eventually bounce back, and it did. There was a rumor of the CDC re-opening cruises summer 2020 and I think I caught the bounce perfectly and doubled my money again in a week.

I also got a dog around this time and thought to myself “hm a lot of people are getting dogs right now”, and so I went all in on Chewy which also had a significant price increase that summer. I eventually hit $900K.

Funnily enough, I actually ended up staying in cash between June and Sep 2020. I was nearly a millionaire but trading was so stressful and I was up a lot at that point in such a short amount of time, I just needed a breather and some time to chill.

Which actually “cost” me a lot, cause the market was still booming those months and I missed out on some easy gains.

So then I got back into it. I was spending even more time in online communities about trading and finance, etc. It all became a form of entertainment for me. Communities like WallStreetBets were really fun to participate in.

I ended up trading Slack, CRSR, and PLTR (which has just IPO’d) and this brought me up to $1.1M before the big bet on GameStop.

Tell us about your story with GameStop, $GME.

So I had come across a post made by someone named Ackilles on WallStreetBets and he had this theory about a short-squeeze because of the 140% short interest ratio. And then I heard that Ryan Cohen was becoming serious about taking over the company, so I did some more research and I deemed this to sound legitimate.

Ryan Cohen at the time was buying up GameStop stock. As far as I know, he had only owned a few other stocks, so this was a very high-conviction indication from an interesting entrepreneur.

So I ended up buying $1.1M or 88,233 shares of GME at $13.04, in other words, my entire 401K. Then I posted this on WSB.

The next major catalyst was their earnings call, and oh my fucking god, it was one of the worst calls I’ve heard. Nothing new or exciting, the boomer CEO basically read from a script and took now Q&A. The stock crashed 15% afterwards and I got pretty nervous. I was gonna lose my 2nd comma!

I didn’t think the next catalyst would be until April (when board elections happen), and this was in Dec, so I ended up selling at ~$15 and parked my money back in CRSR to ride the holiday shopping season.

But… Ryan Cohen ended up joining the board in late January (over a weekend, boy moves fast!) and the rocket was off to the moon!

I totally missed it, paper handed they say.

But I have a rule that I don’t chase, something I learned from my crypto days. If something pops, I don’t go in. It felt like I was standing on the ground watching the rocket ship go but I was still extremely happy.

The thesis was correct! We were right!

I’m even featured in an NBC documentary about GME called Diamond Hands.

All in all, I still got epic gains at the end but I like to think of it like I took the “scenic route” around the whole $GME saga.

What were some of your other trades after GME?

After CRSR, which ended up being a dud, I came across a post about Rocket Mortgage and their special dividend. So after some quick research, I did what I do. I went all in, and unbelievably the next day it went up 70% due to a similar short squeeze effect.

And just like that I made another $1M dollars and became a double millionaire.

But it literally only lasted a day because the next day it crashed, and I lost that $1M. Let me tell you, gaining a mil and then losing a mil in back to back days changes a man.

I still believed in the company (millennials were buying houses en masse so good for mortgages) so I held onto my shares until the next earnings report. However, it wasn’t great and I lost another 15% and decided to cut my losses there.

Over the next few months, I kept looking for weird stocks with interesting catalysts.

I traded things like $CLOV, SOFI, MVST, SKLZ, and in and out of CLF a lot. With these and a few others, I rode up to approximately $4M. And then, I played like 4 earnings report coin flips correctly which got me up to $5M or $6M.

Tell us about your last big trade.

The last trade of this epic story was a company called Big Five Sporting Goods, $BGFV, a sporting goods retail chain out here in California. It was Nov 2021 and someone had mentioned me in a comment and said they had announced a special dividend and I was thinking, wow they must have a lot of extra money and be pretty confident in themselves.

So the next day, literally just because of that comment, I went all in with ~$5.5M. I think I ended up owning nearly 1% of the company.

After posting my trade, I ended up finding others in the trade as well including a lot of folks from the OG GME crew, so in a way, it felt like we brought the original GME band back together. I actually hit $10M for literally one second and I only got to take a screenshot of it. But, then the next minute it went back down to $9M. And then $8M.

I felt like steam had run out so I decided that was it.

And that’s the end of how I traded my way from $35K to $8M.

How did this feel emotionally, to have hit such a milestone number?

I wrote this emotional post about touching my magical number and contemplating whether I should keep trying until I get back to $10M, or just settle. This was November 2021 so the market actually kept rallying for another month.

But, I felt good, and already had set some things in motion such as quitting my job and getting ready to take some time off so after this is when I decided to keep things simple and become a boring index investor.

Final receipts from Sir Jack’s trading journey

What gave you the conviction to keep going all-in on one stock?

It’s just so simple. That was my only strategy. If I achieved high conviction, I always went all-in but I would watch it like a hawk. It’s funny, I never actually set any stop-loss either (too afraid of stop-loss hunts)

But, stomaching some of the swings was really challenging. Sometimes I would literally be rolling over, swaddling in the corner, hoping the price would go back up, just staring at my phone.

Watching all your trades like a hawk sounds time-consuming. What were your days like during this era? Were you constantly glued to your computer? Did you have a job at the same time?

Yeah, I had a job at the time. It was pretty chill so that’s how I found the time for my trading. I was working from home so I actually had this funny setup where I had my work laptop hooked up right next to another screen where I constantly had charts up all the time and plans ready in case I was in a meeting and had to jolt and make a trade immediately.

Do you trade anymore?

Not anymore. I decided to sit 2022 in cash for most of the year because I knew it was going to be really rocky with the interest rate hikes.

But I also believed it was going to be like a nike swoosh shaped recovery, so I implemented a no-thinking strategy to dollar-cost-average back into the market by investing $50K each market day for roughly 5-6 months roughly April – October 2022.

So today, I’m currently sitting at around $7.5M and they’re all in index funds, and I’m actually up ~1% (based on a $7.4M cost basis after withdrawals).

Right now I’m very busy with AfterHour and don’t really have the time to constantly be scanning subreddits and discords.

Where do you think the market goes from here?

Honestly, I’m pretty bullish! I think 2023 will be pretty volatile up and down but it should end the year positive for most stocks. And then 2024 we’re off to the races.

The most recent inflation print shows things are starting to tame and the most important chart I look at every day is called the CME FedWatch Tool which is what the market believes the Fed will do with interest rates at their next meetings.

If you click on the “Probabilities” tab you’ll see the live probabilities of 25 vs 50 basis point hikes and how high it will go, and when the market thinks the first cut will be!

And what matters here is the delta day to day. Last week this tool showed the market thinking we go up to 550 points and staying there until the end of 2023.

This week it’s showing we go up to 475 for a few months and might start cutting all the way down to 350 over the course of the next year.

That delta is where alpha is found!

Investment process

Basically I was just constantly consuming everything.

Reddit posts, niche subreddits, fintwit, discords, even the noise from stocktwits, you name it, I was devouring it.

I’m 100% self-taught by reading on the internet. I’ve literally never read a single book about investing. It’s all been through comments and posts.

I think that all helped form the subconscious brain to really be able to tie things together and synthesize different information.

It all came down to this: is there a potential for growing interest in this stock or in this company? A lot of people will say “invest in companies with strong fundamentals” And that’s great for long-term investing. But in the short term, I believe you need to find stocks that will soon be of interest to the masses, and being able to identify what those key catalysts may be, whether it’s a confirmation of a rumor or something else. Look for rumor mills and keep paying attention until that rumor is either confirmed or denied.

I think of myself as a momentum trader. The whole idea is that you want to buy in around one or two deltas before that inflection point. Otherwise, you might catch a stock in the middle of a run-up and there’s a chance for a rug pull.

And, as I mentioned earlier, I have a rule that I don’t chase. If I missed the rush, I missed it, and I don't allow myself to trade in at that point.

How much of your success has been due to luck vs skill?

1 million percent luck

I really can’t emphasize that enough. I really don't get people who think of themselves as trading geniuses. I just happened to be doing a really risky strategy during the easiest bull market ever. It was also something that could only be done during the WFH pandemic era as I couldn't be running to the bathroom to check stocks all the time in an office environment.

Hot Takes

So I have a hot take about fatFire, FIRE, WSB, AntiWork, and a lot of other modern movements.

I believe these movements or subreddits are essentially different sides of the same thing. They’re different ways for people to cope with late stage capitalism and the fact that life is hard. Life is unfair. Even hard work often only results in middle-class life, and people are just expressing themselves in different ways:

• On WSB, they want to gamble their way into riches.

• On FIRE, they want a low-risk plan to retire early after a dozen years.

• And on AntiWork, they want to burn the system down.

Can you share more about your company AfterHour?

Of course, AfterHour is an app for learning about the stock market through the lens of other people’s portfolios as the ultimate voyeur. You can follow stock portfolios with real numbers from real people in real time.

It’s like grabbing your friends’ phone and peeking at their Robinhood account.

The main thesis here is that through voyeurism and transparency, the next generation will learn about markets. You can see others’ portfolios and learn a lot from them and their comments.

We believe the future of finance is more multiplayer, transparent, and degenerate. The tools have all become democratized which is great, but it's still a pretty solitary single-player experience. Do you have friends you can talk to about stocks or financial news? They exist, but for some reason we don't, and my insight is because finance is a touchy subject and it's weird to reveal real numbers to people we know IRL.

But online, we can be whoever we want with a username and people are more comfortable sharing real numbers and portfolios.

So that's why we're starting with this "BeReal for stocks" idea where every day we snapshot everyone's portfolios at the closing bell and you can swipe through each one learning or making fun of them!

Please sign up for our waiting list on AfterHour.com!

Links to follow AfterHour and Sir Jack:

• AfterHour 

• Twitter

• Discord

• Reddit

What’s your financial stack?

• Brokerage – TD Ameritrade 

• 401k - Vanguard

• Banking – Bank of America

• Credit Cards – Chase Sapphire Reserve, Amex Platinum, Apple Card

• TradingView (chart viewer)

• Discord

• StockTwits

• Reddit

• Mint

Lessons Learned

• Understand the market

• Don’t be afraid of it

• Understand your own risk tolerance

I feel like I only learned recently how skewed my risk tolerance is after talking to people about their trading habits and their investment habits. Generally understanding how the financial world works and how it affects almost everything is key.

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