Phil walks though the HEAT Formula
Financial H.E.A.T Podcast with Matthew Tuttle
Phil discusses options strategies with Matthew Tuttle and Patrick Neville of Tuttle Capital Management.
Timeline
00:00 Market Overview and Thematic Investing
03:17 The Secret Gap: Government Innovation and Future Technologies
06:09 Investment Philosophy: Be the House, Not the Gambler
09:13 Options Strategies: Selling Calls and Puts
12:13 Value Investing: Identifying Undervalued Stocks
15:01 Hedging Strategies: Protecting Against Market Downturns
17:55 The Role of AI in Market Analysis
20:54 Commercial Real Estate and Regional Bank Risks
23:58 The Future of Work: AI and Job Displacement
26:44 Asymmetry in Trading: Risk vs. Reward
29:52 The Illusion of the S&P 500
32:35 Thoughts and Predictions
Summary
Phil’s “Be the House” Framework in an AI-Driven Market
Markets look fragile. AI is reshaping industries in real time. Capex is surging. Commercial real estate delinquencies are rising. Regional banks are under pressure.
Against that backdrop, Phil returns to a principle he has emphasized for years:
Be the house, not the gambler.
Instead of trying to predict where the market goes next week, he builds positions apparent in undervalued companies and systematically sells premium against them — while keeping structured hedges in place for tail risk.
This is a value-based options framework built on repeatable statistical edge.
The Core Philosophy: Selling Premium on Value
Phil’s approach starts with valuation.
He does not treat stocks as abstract tickers. He treats them as entire businesses. His central question is: “Would I buy this company outright at this valuation?”
If the answer is yes — and if downside appears limited by fundamental value — he becomes willing to sell puts and collect premium.
The goal is not to hit home runs. The goal is to:
- Collect income consistently
- Reduce cost basis over time
- Avoid catastrophic drawdowns
- Compound capital steadily
He explicitly contrasts this with chasing high-multiple names like Netflix, Tesla, or other explosive stocks where option selling can become asymmetric in the wrong direction.
