Why this report matters
Most readers love covered calls; most also hate how much cash they trap. Needing 100 shares to play sounds fine, until it quietly blocks your next three ideas. Thatās the problem Wealth Without Shares was built to solve.
Our answer is straightforward: Poor Manās Covered Calls (PMCCs). Instead of buying the whole car, you own the engine, a deepāinātheāmoney, longādated call that behaves like stock, then you sell shorterādated calls to help pay for it. Same logic as covered calls, far less capital, and room to run a portfolio, not just a couple of tickers.
Every January we build the Small Dogs portfolio using a simple, rulesābased screen (Dogs of the Dow ā five lowestāpriced ā equalāweight). JNJ made the cut this year, and itās optionāfriendly: liquid markets and a predictable calendar.
In the pages below, youāll see how a JNJ PMCC stacked up against owning the stock, what one LEAPS contract demands versus 100 shares, and why diversification across the Small Dogs portfolio turns one strong name into steadier progress. Weāll keep the memberāonly specifics private, but youāll leave with the core mechanics and the math that matters.
The Setup in Plain English
Johnson & Johnson (JNJ) is in our Small Dogs portfolio because it qualified under the rules above. It also has what options traders need: liquid options and a predictable calendar. That fits Poor Manās Covered Calls (PMCCs), our capitalāefficient upgrade to covered calls.
PMCC in a sentence: Instead of buying 100 shares, buy a deepāinātheāmoney, longādated call (LEAPS) to mimic stock exposure, then sell shorterādated calls against it to collect time decay. Same idea, much less capital.
What We Actually Ran on JNJ
Core: LEAPS Jan 15, 2027 125 Call
Entry (5/15/2025): JNJ stock $153.25; LEAPS $33.65
Recent (10/25/2025): JNJ stock $190.43; LEAPS $67.25
LEAPS change: +$33.60 per share equivalent
Shortācall cycles: A mix of credits and intentional givebacks to reopen upside during rallies (keeping delta long)
Result: PMCC Return +72.72% (per contract +$2,447 on a $3,365 LEAPS cost)
Stock benchmark: +24.26% (from $153.25 ā $190.43, about +$3,718 on 100 shares)
Translation: The PMCC put up a higher percentage return on dramatically less capital, even though the absolute dollar profit on 100 shares was larger.
The Capital Math (Why PMCCs Exist)
Buying 100 JNJ shares (5/15/25): ~$15,325 of capital.
Buying 1 JNJ LEAPS contract (deep ITM): ~$3,365 of capital.
Capital efficiency: one PMCC contract required ~4.6Ć less capital than 100 shares.
Return per dollar of capital in this period:
Stock: ~$3,718 profit / $15,325 capital ā $0.24 per dollar.
PMCC: ~$2,447 profit / $3,365 capital ā $0.73 per dollar.
In other words, the JNJ PMCC produced ~3Ć more profit per dollar committed than buying 100 shares over the same window, and left capital free for other positions in the portfolio.
Why the Short Call Wasnāt āFree Moneyā (and Why Thatās Fine)
Hereās the honest part most gloss over: on JNJ we gave back some earlier shortācall premium during strong rallies so we could roll up/out and reopen upside (keep delta long). That cost was by design, a planned tradeāoff to stay long a trending stock rather than cap ourselves. We do this when the deltas of our LEAPS is close to parity with our short call.
LEAPS gain: +$33.60 per share equivalent.
Net shortācall P&L: modestly negative over the window (we paid to regain headroom).
Net PMCC: still +72.72% on the LEAPS cost, because the long leg did stockālike work.
Think of the short call as your brake pedal: you use it on flat or choppy roads to collect income; when the road turns downhill (rally), you ease off the brake (or move it) so you donāt burn the pads.
Stock vs. PMCC: Which āWonā on JNJ?
Absolute dollars: Owning 100 shares won (+$3,718 vs +$2,447).
Return on capital: PMCC won (+72.72% vs +24.26%).
Opportunity cost: PMCC frees ~$12k of capital per position compared to stock, money you can put to work elsewhere in the portfolio.
If your constraint is capital, PMCCs shine. If your only metric is absolute dollars on a single symbol, stock can win, but you likely give up diversification.
Why This Lives Inside Small Dogs
Why JNJ is here: Because the rules put it here. Each January we:
Rank all 30 Dow stocks by dividend yield (using the last trading day of December).
Take the top 10 (Dogs of the Dow).
From those 10, pick the five lowestāpriced stocks, those become the Small Dogs portfolio for the year.
Equalāweight the five and hold until next Januaryās refresh.
Then we run PMCCs on each name to get stockālike exposure with far less capital.
This is why diversification matters. One position (like JNJ) can lead, another may lag, but the portfolio smooths the ride. We let the rules do the work and keep our management simple.
Mechanics We Care About (Simple)
Pick the LEAPS: deep ITM, highādelta (~0.80 to 0.95), 15 to 27 months out. It should act like stock.
Sell calls on a rhythm: 30 to 60 DTE, where weāre paid. Take 50 to 70% gains when offered.
Mind the calendar: Earnings and exādiv dates guide timing and strikes.
Size small: Keep any one position a small part of the portfolio.
Adjust without drama: If a rally caps us, roll up/out. If IV spikes, wait to be paid.
What If Things Went the Other Way?
Sideways market: Short calls do the heavy lifting; you chip down basis while the LEAPS holds the core.
Rally: Expect more rolling; consider it the ātollā to stay involved in a trend.
Drawdown: Risk on the long leg is defined to the LEAPS debit; we can pause shorts during panic to keep headroom for recovery cycles.
Takeaways
PMCCs are a capitalāefficiency tool. JNJās PMCC delivered ~3Ć the return per dollar vs. stock over this period.
Shortācall income is a tool, not a trophy. Sometimes you give back premium to participate in a rally, on purpose.
Diversification turns wins into durability. The Small Dogs portfolio uses multiple names so no single position has to carry the plan.
Want the Full JNJ Log?
Understand the process now; in January 2026 weāll reset Small Dogs, debut new portfolios, and refresh established portfolios.
Members receive alerts and weekly reports/updates education, strategy talk, exact strikes, DTE, credits/debits, and our roll ladder, plus the rest of the portfolio with positionālevel notes.
Join Wealth Without Shares ā $59/month or $495/year (grandfathered; cancel anytime).
Or grab the free PMCC Primer to see how the mechanics work before you jump in.
Probabilities over predictions,
Andy Crowder
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Disclosure: Options involve risk and are not suitable for all investors. Past performance is not indicative of future results.