I Sold It All

Assalamu alaikum everyone, I hope you are doing well. My apologies for running late. We're having some technical difficulties but I think they've been resolved now and we're live. I hope this last week of Ramadan is being taken advantage of inshallah with dua and making sure that we end strong inshallah. Alright, so today I'm going to update you on a position that I brought up on this channel before and I feel like I have an obligation to sort of update all the public viewers because obviously PIF members know about the trade but I feel like since I did mention it publicly I should mention when my position has changed and so we're going to do that in this live and I'll tell you why I sold. As always, it's not financial advice. Be sure to do your due diligence before making any investing decisions and last time I mentioned that I had a treat for you in the next live. The treat is that inshallah from here until the end of Ramadan, so Tuesday midnight eastern standard time, you can use the code RAMADAN24 and you get 35% off of membership. If you do intend on using this code, I think sooner is better than later because we have some trades that we might do from now until Tuesday, so why not get the full benefit. So for those who are unfamiliar, PIF membership includes the ability to follow the portfolios that I manage myself using real money, manage it to monitor it to trade for trade, get notified whenever we buy or sell, join our exclusive discord community which includes halal conscious investors who are trying to help one another out and doing well for themselves and also staying true to islamic principles and also access our watch list which includes all of our buy below sell above prices for the different assets that we follow as well as deep dives into different stocks and cryptocurrencies and so we are not a day trading we are not a day trading service we don't do day trading our our typically our investments are held for longer periods of time however we do do the swing trade the occasional swing trade and in fact I think you can consider the position that I'm going to talk to you about today as somewhat of a swing trade. So let's talk first about I think something that's really important which is the state of the economy and specifically the prospects for interest rate cuts. So today Fed chair Jerome Powell mentioned that he needed more evidence that inflation is easing before and they cut rates and this is what we sort of knew all along we we knew that the Fed didn't really know when it was going to cut rates and I don't really blame them it's kind of hard to figure out whether at least per the the metric that they're using whether inflation is going to reach two percent anytime soon it doesn't if you if you if I had to guess I think that there's a bigger possibility of ponement for a June rate cut than there is a possibility for a rate cut. Now Jerome Powell did mention that recent readings on both job gains and inflation have come in higher than expected the recent data do not however materially change the overall picture which continues to be one of solid growth strong but rebalancing labor market and inflation moving down towards two percent on a sometimes bumpy path. I doubt that it's going to get to two percent anytime soon but so long as there's progress towards that that's really what we are looking for and the market is actually pricing in a 61 percent chance of a rate cut in June so the market seems even more optimistic than on Monday when I updated you on these numbers. So it does seem like the market is is taking Jerome Powell for his word in terms of them not being concerned with the data that's coming out regarding inflation and the data not changing the Fed chair's mind. That being said I do think that the Fed is kind of looking for a reason to cut and the reason why I think that is because there's 400 billion on the line in terms of a rate cut or two to three rate cuts so if you look at the difference in interest payments that the U.S. government would owe on the debt that it has the difference in interest payments with a 150 basis point Fed cut so one and a half percentage points Fed cut the difference would be 1.6 trillion without a without the cut of 150 basis point versus 1.2 trillion so there's 400 billion dollars on the line in interest that is contingent on whether what the what the Fed decides to do so I don't really think that this is not a consideration even though the Fed does you know claim to be independent I have to think that this is impacting the Fed's decision and its stance and perhaps because the two percent number is a made-up number anyway the target that is perhaps that target ends up changing and they say you know what three percent isn't that bad after all so maybe our new target is three percent so needless to say there's a lot of ambiguity with regards to the interest rate situation in the months ahead that being said I think all of this ambiguity just goes to support the thesis behind something like Bitcoin a place where people can sort of escape the system and store their purchasing power now speaking of Bitcoin let's talk about the position that I wanted to talk to you about today which is CleanSpark and CleanSpark is a Bitcoin miner so they make money from mining Bitcoin and the reason why I sold it now I sold two-thirds of my position last week on Tuesday the reason why so I have a number of different metrics where that I use to judge these miners by so one of them being price to sales and at the time CleanSpark was the most expensive and if you just take price to sales it was the most expensive amongst the miners that I follow so I felt reducing its reducing the position taking profits was the right thing to do and now it's fallen to this is a screenshot taken today it's fallen to third spot in terms of most expensive and also I do like to one of the things that I like to look at is insider ownership and insider ownership so more insider ownership is better because it aligns the interests of the insiders with the interests of the shareholders and CleanSpark has insider ownership of just 3.33 percent so on the lower side in terms of insider ownership that being said it does have a larger market cap so you know keep in mind this is a percentage so even though you know 3.33 percent may seem on the smaller side it does represent the larger dollar amount so I sold as I mentioned last Tuesday and then I sold again on Monday the remaining third and I'll tell you so when I third when I sold last week it was 23 dollars and 30 cents and then I sold close to 19 dollars on Monday I closed out my position so here's why I ended up sort of taking the last third off of the board so last week on Thursday the day before the markets closed because Friday they were closed for Easter so last week Wednesday the day so actually Wednesday the directors Matthew Schultz sold close to well eight and a half million dollars worth of shares the week before the O had sold a similar amount close to nine million in shares and the day after so Thursday the day after Matthew Schultz sold they announced 800 million dollar at the market dilution of additional shares so 800 million dollars worth of additional shares were going to be created and that caused the stock price to plunge now I initially I sold the two-thirds before this happened alhamdulillah I sold that because of the basically the pricing of the stock and I felt that it was fully priced in basically future prospects were fully priced in but the remaining third came after this dilution event and also things started to they started to stink so Wainwright announced that they had it the day of the dilution event they announced that they had a 27 price target per share for CleanSpark now why is this stinky why does this stink well because if you look at their announcement Wainwright is the one that is selling their shares at the market so they should not be commenting on they should not have a price target there's a conflict of interest here why is there a conflict of interest because Wainwright gets three percent commission on gross sales so they get a commission on the price that they the amount that they that they sell and so this seems like you know something where you know Wainwright should probably not have a or not publish a price target because there there's a conflict of interest here now CLSK holders have benefited from dilution in the last year so where so even though they've been diluted substantially the price of the stock is up 7.25x since last year now the market cap of the company to give you an idea of how much dilution has gone on the market cap has increased 22 and a half times since last year but the share price has only increased seven and a quarter times since last year and that's because of all the dilution that has happened now one conclusion from this one takeaway from this is that actually the management the dilution that they've done has actually been in the shareholders favor because yes they have diluted but they've created more value for the shareholder than the amount that they diluted this is this is correct as a so when you're looking at the last year however I have to believe that this is not something that can sustain itself indefinitely right now to give an analogy it's like the CLSK holders are swimming against a constant stream of dilution and the shareholders have or the market has had enough energy to push them upstream despite the the downstream pressure that they're swimming against from dilution I have to think though that eventually this downstream pressure is going to take the take the stock price with it and eventually there's going to be a day of reckoning for CLSK and I just I'd rather sell before the top than after the top so I'm not saying that the top is anywhere near I don't know when the top is I don't know when the market changes its mood but I'm definitely so far based on you know what has happened I am I'm not really you know things are not things are not inducive of increased trust and one of the and sort of the nail in the coffin which caused me to sort of pull the trigger on Monday in addition to the price actually being uh close to our sell above price which was $19 so we got that and alhamdulillah for the position itself for the public growth company growth portfolio we've made you know close to six thousand so it's been a it's been a profitable position a profitable trade however sort of the nail in the coffin was there is a provision in the announcement that was published on Thursday and it said that on April 1st and October 1st of each year there's an evergreen provision wherein the number of restricted stock units automatically increases so automatic increase of the maximum number of shares of common stock available under the 2000 plan to 15 percent of the company's outstanding shares of common stock in each case as of the last day of the immediately preceding month so what does that mean so restricted stock units are basically shares that are given to management as compensation and they're typically a big part of any executives especially for public company any executive compensation a big part of that are the is the stock grants that management gets and the idea behind this is that management should share in the success of the company and it should be penalized for a performing badly the stock price performing badly and therefore this would align management's interests with the stockholders interest however what they've done here is they've said the amount of shares the number of shares that they're going to give to management increases to 15 percent of whatever the total number of shares is so if the number of shares is you know 1 billion then the number of shares allocated to management for compensation to management is 150,000 150 million shares if the number of shares goes up to 2 billion then the number of shares with which management can be compensated increases to 300 million so then management really doesn't have any disincentive to dilute shareholders because the number of shares that are being allocated to them is increasing so while the shareholders are being diluted management is not being diluted and that doesn't seem like a good alignment of interest between management and shareholders again i don't know if you know what CLSK stock is going to do i do know that they have a lot of dilution that they have to make up for with you know announcements of increasing cash power and results that so far if you look at the last year have actually been enough to increase the stock price many times more than the amount of dilution but long that this dynamic remains is anybody's guess it's possible that it remains for another 12 months and perhaps in 12 months CLSK is you know seven times where it is right now i doubt that's going to be the case however i don't feel given that there are so many other bitcoin miners out there i don't feel obligated to and especially since we were in the profit on our CLSK position i don't feel obligated to stick with them given this unique conflict of interest that i see with clean spark and so that's why i sold and so that's so i just wanted to make sure that i i shared with you my thinking there and i shared with you this update on my clean spark position i will probably opt for a different miner in place of a clean spark so yeah i ended up as a result of this analysis i ended up selling as i mentioned on monday the remainder the third of my position so i do want to remind you all that if you use the code ramadan24 no spaces and while when you're checking out if you apply that code you get 35% off membership so if you thought that the membership was expensive and by the way you know one trade could pay for the membership not all of our trades are are spot on but i think especially recently our trades have been quite good and i think you know one trade could pay for your membership two trades may put you in profit so i think it's a really good deal so check it out you can see a list of all the benefits on the plans page and you can sign up on app.practicalislamicfinance.com the offer ends tuesday at midnight eastern standard time inshallah and with that i will take some questions i i saw a lot of activity in the chat do leave a like if you enjoyed this overview i'd really appreciate that first link it doesn't work i'll check on that and make sure it's updated why did i leave turkey i will i will inshallah update you all on that in a separate video rachad yeah and you've been mentioning that rachad for a while and i think you know there's a non-trivial chance that that ends up being the case i do think that there will be a cut this year though because of the because of the cost of not having a cut great call on clsk selling thank you rachad i appreciate it they talk about bloodbath of btc soon is that thing sure no it's definitely not sure i would not i would not panic sell at all this is a natural part of the this is a natural part of the bitcoin cycle you have these pullbacks and by the way we've had four months of consecutive gains in bitcoin so i think a pullback and even if you can you compare this pullback with historical pullbacks during this period of the boron hasn't been much so it's been quite resilient so i would not i would not be panicking not a good not a good way to invest thank you yes pif to the moon also dogecoin to the moon if you haven't got the memo yet so more question about turkey yeah i i will make a more dedicated video to that inshallah a lot of learnings tell us what is the ruling on trading with prop firms i think i think that depends on the specifics of the arrangement so one trade can pay for them so a question is when you say one trade can pay for the membership how much do i need to invest to achieve this well i think that you should be at least well first off i think that i'll give you like for the growth portfolio we aim for a 30% annualized rate of return for our crypto portfolio it's more than that for a dividend portfolio it's less than that but our dividend portfolio would like to we'd like it to be more stable give us some cash periodic cash for our growth portfolio we're prioritizing growth for our crypto we're basically prioritizing growth as well so if we said our growth portfolio had a priority of like our aim is a 30% annualized return then you would have to have assuming no discount you would have to have at least a thousand dollars invested to get a 300 return and that would pay for your membership right but i think that you know if you just have a thousand dollars to invest then i would wait on you know focusing on investing to be honest unless you're trying to learn now that's that's something else i guess so the lessons that you learn you may end up using them for the next 10 20 years and they'll pay like i don't know a thousand x what's your membership cost so there's different ways to look at it so you could either either say well i'm only going to consider the the actual trade the actual money that i make as value from the membership i think that's probably short-sighted in which case i would say you would need a thousand dollars on the other hand if you take this as an opportunity that to learn like okay i just want to learn investing and learn you know the and go because i think that the proper temperament and attitude with investing takes around two cycles to acquire so you could acquire that you could learn these lessons and go through these cycles with a small amount of money but start earlier in your life and then those lessons will pay off to use a common term and political scene bigly they'll pay off bigly throughout your investing journey that being said so so yeah so it depends on how you look at it if you look at from a lessons perspective and just like getting in the process and learning investing that happens with with the community through your membership then those lessons are invaluable right they'll stay with you your entire life if you look at it just from a dollars perspective then you know a thousand dollars thirty percent of that is 300 that pays for your membership that being said like if you look at our clean spark position we made six thousand dollars from that trade right which pays for like what 30 years of assuming you use the discount of a premium membership so it really depends i mean even though we we target 30 percent we may achieve more than that we may not achieve that in a particular year but we may achieve way more than that as well so yeah hopefully that helps so mark and would you please list all publicly traded bitcoin mining companies that you are comfortable from a perspective oh good you mentioned that so if you go back to the that what i showed you guys so basically all of these i'm comfortable with with exception to the i'll have to review them in case these numbers have changed but with exception to stronghold and riot which don't meet our which have more reliance on interest than our 2.5 percent maximum threshold so all of these are are fine inshallah at least i'm comfortable with them from a perspective thanks yeah more likes is nice is it time to sell solana no i have not sold yet way i come inshallah abdullah will get you taken care of for everyone else please don't forget to apply the discount code before you subscribe so that you get the discount and so without any other questions i would like to thank you all for coming and until next time make sure to take care of yourself assalamu alaikum and peace be upon you all