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Warren Buffett once said, "Wall Street will sell what it can sell, just remember that."

The YouTube algorithm suggested a video which caught my attention and I felt something had to be said, even though I promised Ryne Williams I wasn't going to write or talk about these things anymore.

But the flesh is weak, Ryne, and I need to get this off my chest.

Here's what caught my attention:

The BLOX ETF is being promoted with claims of 36% WEEKLY distributions, not dividends and "ZERO NAV erosion."

I checked out BLOX's official prospectus and fund documents and this "ZERO NAV erosion" promise doesn't appear anywhere in their actual filings. Also, the 36% distribution is an annualized rate based on the latest weekly payout — not 36% paid every week.

But the funds statements tell a completely different story than the headline.

Here's the proof - straight from their own documents:

Note that 19a-1 notices are estimates and final tax reporting may differ, but the August 25th distribution shows 90.80% Return of Capital (ROC). The one from two weeks earlier shows 100% ROC. That means the entire distribution that week was likely investors getting a big chunk of their own money back, dressed up as "income."

I know the fund managers spin ROC as not getting your own money back and "tax-efficient," but when 90-100% of the "income" is ROC, you're not getting investment profits. You're getting investment capital back with a fancy label on it.

It's like taking money from your left pocket, putting it in your right pocket, and calling it earnings.

I also found it quite interesting that one of Nicholas ETF's fund managers is Jay Pestrichelli - who's behind over 30 actively managed ETFs across YieldMax, Defiance, NicholasX, and Sofi brands.

He's has built an empire of high-distribution funds that rely heavily on ROC across multiple fund families while charging roughly 1% expense ratios:

If this actually worked, I think that every major pension fund and institutional investor would be pouring billions into it. Warren Buffett would be talking about it. It would be the biggest financial story right now.

Instead, it's being promoted through YouTube videos and promises that sound too good to be true because they likely are.

This reminds me of the early 2000s when Buffett and Munger were warning about complex financial products that seemed to promise something for nothing.

They called derivatives "financial weapons of mass destruction," but most people ignored them until everything collapsed.

Back then, banks bundled risky mortgages with good ones, created complex securities, and told people "you don't understand how sophisticated our risk models are" when anyone questioned the math.

The whole system relied on housing prices never falling nationwide - which seemed impossible until it happened.

Today's high-yield ETFs follow the same playbook: complex strategies most people don't understand, unsustainable promises (36% weekly vs. "housing never falls"), and dismissing us skeptics with "you don't understand how ROC works."

The scale is smaller than 2008, but the pattern is identical - financial engineering that seems to break economic rules, marketed to people who don't see the risks.

And speaking of who benefits from all this complexity, check out where your money actually goes when you pay that 1.03% fee:

Who Gets Paid from Your BLOX ETF Fees:

Jay Pestrichelli (Fund Manager) gets his cut
Tidal Financial Group (Platform) gets paid for technology/operations
Foreside Fund Services (Distributor) gets paid to sell the fund
U.S. Bank (Custodian) gets custody fees
Lawyers, compliance, and accounting services all get their fees

All these people get paid whether the fund goes up OR down. They get paid first, before you see any returns. So if the fund loses 20% but pays an 8% "yield," you're still down 12% PLUS you paid 1.03% in fees to multiple middlemen.

Compare this to an S&P 500 ETF (VOO) that charges 0.03% and has delivered about 10% annually over decades.

The fund launched in June of 2025, charges a 1.03% fee, and in my opinion, is giving people their own money back while calling it long-term income generation.

I'm sharing this because I care about people getting caught up in something that breaks basic financial rules. There are no shortcuts to real wealth building. The most successful investors stick to simple, diversified investments with realistic expectations over many decades.

And while a collapse of these funds would be a blip in the financial markets, my fear is that some individual investors could be wiped out and learn a very expensive lesson.

I'd love for you to reply and let me know if you invest in these products or if you think I'm flat out wrong.

Disclaimer: This is not investment advice, just one person's opinion that may be incorrect. Do your own research before making any investment decisions.

😁THANK YOU to all who responded to the last newsletter!!

Check out the portfolio on Blossom, the podcast, or see what’s cooking on YouTube.

And now, here is this week's portfolio activity...

Dividends Received This Week ~$0

none. 😔

Dividends Received Year to Date (Schwab Only)~

$3,639.27

Stocks Bought (AVERAGE)

3 Agree Realty (ADC) | $72.00
30 Ares Capital (ARCC) | $22.24

Stocks Sold (AVERAGE)

None

Notable Ex-Dividends This Week + SSD Score

9/2 Lockheed Martin (LMT), 2.90% | 80S
9/2 M&T Bank (MTB), 2.98% | 99VS
9/2 McDonald's (MCD), 2.26% | 77S
9/2 Nike (NKE), 2.07% | 80S
9/2 Realty Income (O), 5.49% | 80S
9/2 Texas Roadhouse (TXRH), 1.58% | 80S
9/3 Old Dominion (ODFL), 0.74% | 81VS
9/4 Home Depot (HD), 2.26% | 87VS
9/5 Genuine Parts Company (GPC), 2.96% | 80S
9/5 Kimberly-Clark (KMB), 3.90% | 88VS
9/5 PepsiCo (PEP), 3.83% | 93VS

🎙️Podcast of the week🎙️

Alphabet Inc.

Aug 26 · Acquired

251:32

Acquired podcast. The first half of the Google story. 4 hours 11 minutes long. Quality and quantity at its finest and it's hard to not want to be an Alphabet (GOOGL) investor after listening to this one!

🎦If you missed it, two more stocks (kind of) that could really take off and why...

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🎶Random music from the Dapper Dividends Jukebox🎶

Generation X - Untouchables