How I make money

- getting alpha

Some of the best investors have dry spells with no outperformance for years. Chris Hohn is such an investor. He believes in buying and holding great companies bought at a good price. While there is nothing wrong with the approach, past performance does not predict future performance. Hohn has been phenomenal overall, but terrible the last few years. He will be great again, but when?

Getting rich cannot depend on one strategy, one stock, one sector, or one factor. Its good to look for alpha in different places. Put Hohn is one part of your portfolio, and something else in another 3 or 4 sections, and your chances of outperformance can potentially increase , if you manage all subsectors well.

That is why this blog has disparate ways of making a living. In the center is a portfolio that I think is better than SPY, safer and primed for all markets. I call it the Superman portfolio after my grandson. I invest in that, real money, no changing and then use other strategies to trade around it.

One consequence of the Superman portfolio is needing to be thinking in terms of a portfolio, and not just about individual stocks. With AI, you can calculate, easily, expected return, risk and reward, Sharpe, Sortino and any other metric that appeals. You can calculate by stock and by portfolio and back test performance for 5 or ten years and consider and test potential enhancements.

I have recommended and used options in this blog. Selling covered calls is one of the most popular strategies, but I do not particularly like it as if often caps performance. There is nothing like making $110 on a cc then watching the underlying zoom upwards, past your strike, making you feel like a fool.

One use of options that I fo like is selling put options. I do not do it indiscriminately. I find stocks that I truly want to own, wait until they trade for deep value prices, then sell a put beneath that price. If the stock pulls away, I keep the premium and find another opportunity. The trick to success with this approach is you have to have some notion of the true value of the stock and be ready to pounce when it appears.

Another use of leverage in my most recent posts is the use of long dated warrants, especially SPAC or deSPAC warrants on stocks in hot sectors, such as quantum, space, rare elements, or biotechnology. I shy away from buying calls as calls are decaying assets in most cases, much like your new car decays in value when you drive it off the lot and for every day thereafter. Again, the warrants have a handful of issued “tricks” that can destroy performance if you do not know what they are and navigate appropriately. One of my posts addresses some of those nuances. I also present a few examples of warrants that I think have exceptional risk and reward ratios. In the past, Planet (PL) warrants that could have made you a millionaire had you bought, sized up and HELD. Remember that was a needle in the haystack. Notice: I am discussing in retrospect. I did not pull down life changing wealth on that one.

I make occasional recommendations of asymmetric biotech investments . I like ones that are more or less under the radar but that are derisked having a compelling story and having already passed the FDA gauntlet. Sometimes they are prelaunch or perilaunch and dip before rising with their compelling story. LQDA in the low teens was one. Currently, DERM, that I have not written about, may be another.

In my personal account, I have traded or tried to trade, sometimes successfully, sometimes not, many other strategies . I have subscribed to many authors and blogs on seeking alpha and on Substack and I AM HAPPY TO SHARE LIMITED SUBSCRIPTIONS TRIALS OF THOSE BLOGS THAT I CAN LEGALLY GIVE AWAY IF I CAN DO SO AND YOU TELL ME WHAT YOU WANT.

I would like to give a shout out to some of the best blogs that I have read on Substack. These include The M & A Hunter, Biotech Distilled, Cassandra Unchained, Crack the Market, Jimmy’s Journal, Hidden Gems, Junior Mining Pros, Prinsight, Capital Mischief, Shanaka Perreira, the Royalty King, The Value Road, Undervalued and Undercovered, Compounding Quality, Mispriced Assets, Daniel Romero, Shawarma Capital, Mansur Kuchkarov, the Options Oracle, Cannibal Stocks, Crack the Market, Cycles Edge, Defy the Odds, DIY Investor, Don Durrett, GP Capital, Outlier Capital, Swiss Transparent Folio, The Clinical Edge, Hidden Market Gems, Quantified Strategies,The Multiplier, The Tactical Allocation, TSCS, What.tax, Business Mastery, and outside Substack, Porter & Co, Stansberry Research , the Crypto Edge, SMB Capital and others I am forgetting to mention right now, but appreciate. There is so much alpha around including free alpha on Youtube. To all of you who write these, thank you. I have learned from you.

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Eventually I may go paid fully but I need to build up more first.

Thank you to all my readers!