Rosi and I held nothing but SPY in three portfolios. We wrote covered calls on these. We were assigned yesterday, and we were fully in cash yesterday.
In a rising market, cash is trash. In a declining market, cash is king.
Here is what Rosi and I plan to do when the market opens today:
YOU NEED TO LOGIN TO VIEW THE REST OF THE CONTENT OR LEAVE A COMMENT. Please Login. Not a Member? You can now sign up for $12 for a one-year membership. Join Us
Yesterday, February 10, 2025, SPY rose 0.7%. That was primarily due to Trump’s announcement of 25% tariffs on aluminum and steel imports. US aluminum and steel producers benefitted enormously, contributing to the rise in SPY.
In the near future, we expect volatility. Furthermore, the market is greatly overpriced, and we can fully expect a correction in the latter half of 2025.
Here is what investors should be doing:
YOU NEED TO LOGIN TO VIEW THE REST OF THE CONTENT OR LEAVE A COMMENT. Please Login. Not a Member? You can now sign up for $12 for a one-year membership. Join UsThe United States’ national debt now exceeds$36 trillion – the highest in history. What does this mean to you and me?
Borrowing to acquire an appreciating asset makes sense. Houses are an example in most cases. Another example is the stock market when it drops into bargain territory.
Professional violinists who buy the right kind of violin at the beginning of their career can consider it a part of their retirement plan. The same goes for violin bows. Fifty years ago, Stradivarius violins sold for between $25,000 and $100,000. Today, they are selling between $2 million and $20 million.
That works out to approximately 12.73% per year or more.
Borrowing to buy a depreciating asset, such as an automobile, will move the individual towards poverty in old age. About 80% of new cars and 50% of used cars are bought using some form of borrowed money.
What about borrowing by companies?
When companies use their own cash or borrowed money to buy their own shares, we are looking at a great time to invest in those companies. The shares almost always go up.
And what is the risk involved? The risk is often minimal and primarily consists of decreased flexibility.
For individuals, good debt consists of borrowing to invest in assets that would likely appreciate such as the stock market.
What can we expect from government borrowing now at its highest level ever?
A fun portfolio consists of buying individual stocks in an attempt to outperform the market.
Palantir Technologies (PLTR) rose 21%; 4th quarter earnings exceeded analysts’ expectations. It is a good momentum investing security. Momentum investing relies on the fact that a trend is more likely to continue than it is to reverse itself. Note, however, that trend reversal is a certainty.
PLTR is a software company specializing in big data analytics, AI, and data integration.
Three things about fun portfolios:
YOU NEED TO LOGIN TO VIEW THE REST OF THE CONTENT OR LEAVE A COMMENT. Please Login. Not a Member? You can now sign up for $12 for a one-year membership. Join Us
During any 30-year period, the American economy, as represented by SPY, an exchange-traded fund mirroring the S&P 500, which itself is a good representation of the American economy, has gone up about 1,000%. During the same period, the average mutual fund investor made less than 250%! Where does the difference go?
Top-earning professionals such as physicians, lawyers, and dentists can make as much as $400,000 annually. The average full-time worker earns about $60,580 annually, so we can see that education pays.
It would take two years of top-earning professional income to equal what a top-earning Wall Street CEO makes in one week! That is where the difference goes!
What about hedge fund managers?
In a good year, top-earning hedge fund managers can make billions, that is, billions, with a b.
They do that by charging 2 and 20. That stands for 2% of the money you give them to manage and 20% of any growth. They don’t participate in the inevitable market declines.
Call me if you want to discuss this. (705-441-4566)
Wall Street is optimistic about Trump’s pro-business stance.
We have stated this many times previously, and we are saying it again: the best, safest way to earn money in our accounts is to write (sell) covered calls or cash-secured puts on the US economy as represented by SPY, an exchange-traded fund (ETF) tracking the performance of the S&P 500. Sell with the shortest, expiry dates possible. For the past 200 years, this approach to investing has earned a 16% annual return.
Americans can do that in all their tax-advantaged accounts (401(k), IRA, HSA, FSA, ESA, ABLE). Canadians can only sell covered calls in such accounts (RRSP, TFSA, RESP, RDSP, FHSA).
See ChatGPT for specifics about any of these.
Canadian investors must open a margin account to sell cash-secured puts and have at least $60,000 to invest in one board lot (100 shares).
This is the only reason to have a margin account. It is possible to lose more than 100% of your money in a margin account, so don’t go there for any other reason.
Here are the details.
YOU NEED TO LOGIN TO VIEW THE REST OF THE CONTENT OR LEAVE A COMMENT. Please Login. Not a Member? You can now sign up for $12 for a one-year membership. Join Us
Generally, economists think that tariffs are not good for promoting economic efficiency and our welfare overall. Trump seems to be unaware of that.
Almost all countries have mandated that nothing but electric vehicles be sold soon in their countries. Why?
The list of problems associated with internal combustion (ICE) vehicles is long. Here are a few items.
There are nearly one and a half billion vehicles with ICE engines on the planet. They contribute significantly to increased CO2 levels in the atmosphere and the resulting global warming. Further, the manufacturing of ICE vehicles is energy-intensive. Burning fossil fuels to make ICE vehicles contributes to global warming. In addition, particulate matter and black carbon come from ICE vehicles’ tailpipes. Both contribute to global warming. Trump seems to be unaware of that.
Tesla manufacturer Elon Musk has donated just under $300 million to support Trump. That makes him Trump’s largest single donor.
It is no secret that Trump likes money. It will be interesting to see how, in the future, he reconciles his love of the money coming from Elon Musk and his dislike of electric cars.
And finally, Trump is pro-business. 
He will do everything to make business boom. Along with that, our portfolios will grow.
However, we must be aware that this will not go on forever. As J. P. Morgan stated years ago, markets will fluctuate. Goldman Sachs and the Bank of America predict zero to one percent return on market investments for a decade!
As I stated in a previous post, make sure you have a 50/50 asset allocation (60/40 also works well, as does 55/45 or any similar ratio) and rebalance your asset allocation every time market movement disturbs it.
Do not try to time markets.
In a rising market, cash is trash. In a declining market, cash king.
Intelligent investing requires no luck.
Good luck!
How expensive markets are today is the best predictor of stock market returns over the medium term. Trumps support of business will likely continue to push the market up – for a while. Make sure you have 50/50 asset allocation (60/40 also works well as does 55/45 or any similar ratio) and rebalance your asset allocation every time market movement disturbs it. Do not try to time markets. In a rising market, cash is trash. In a declining market, cash king. Intelligent investing requires no luck. Good luck!
Call me if you want to discuss this. (705-441-4566)
Wall Street is optimistic about Trump’s pro-business stance.
We have stated this many times previously, and we are saying it again: the best, safest way to earn money in our accounts is to write (sell) covered calls or cash-secured puts on the US economy as represented by SPY, an exchange-traded fund (ETF) tracking the performance of the S&P 500. Sell with the shortest, expiry dates possible. For the past 200 years, this approach to investing has earned a 16% annual return.
Americans can do that in all their tax-advantaged accounts (401(k), IRA, HSA, FSA, ESA, ABLE). Canadians can only sell covered calls in such accounts (RRSP, TFSA, RESP, RDSP, FHSA).
See ChatGPT for specifics about any of these.
Canadian investors must open a margin account to sell cash-secured puts and have at least $60,000 to invest in one board lot (100 shares) of SPY.
This is the only reason to have a margin account. It is possible to lose more than 100% of your money in a margin account, so don’t go there for any other reason.
Here are the details.
YOU NEED TO LOGIN TO VIEW THE REST OF THE CONTENT OR LEAVE A COMMENT. Please Login. Not a Member? You can now sign up for $12 for a one-year membership. Join Us
Call me if you want to discuss any of this. (705-441-4566)
The picture shows the 5-inch high car window breaker and seatbelt cutter I recently got. Consider getting one. We hope that we never have to use it, but it has saved many lives when cars roll over and you can’t open the door or when a car falls into a body of water or small children accidentally get locked in a car and other situations.
These posts are about investing, so let us talk about investing.
Yesterday, January 13, Rosi and I sold covered calls on SPY in three accounts. We made $153 US per contract. We have enough shares of SPY to allow us to live comfortably on that income. It took us less than five minutes to do this.
What are we going to do today, January 14?
Here are the details.
YOU NEED TO LOGIN TO VIEW THE REST OF THE CONTENT OR LEAVE A COMMENT. Please Login. Not a Member? You can now sign up for $12 for a one-year membership. Join Us