What a great start to the year!
The S&P 500 is up from 2,680 to 2,770 so 90 points is 3.3% and our Long-Term Portfolio is already up 4.4% or $21,755 in 8 days of trading. As you can see, we still have all of our cash on the sidelines as the well-hedged positions we picked up have been cash-positive for us so far – we haven't been confident enough to take big risks yet. Our $100,000 Options Opportunity Portfolio, which you can follow at Seeking Alpha, is only up 3.3% because we're down $900 on our TZA hedge while, in the $500,000 LTP, CASH!!! is still our primary hedge against a market collapse.
Our goal is not to "beat" the market on the way up, our goal is to kick the market's ass on the way down or if the market is flat. By capturing all the good stuff and avoiding all the bad stuff, we can consistently outperform the market year after year without suffering the portflio-killing pullbacks that plague more aggressive traders. While it's fun to brag about making outsized returns during these market bubbles – it's more fun to "Get Rich Slowly" and retire with plenty of money, isn't it?
The key to building wealthy over time is CONSISTENCY. Warren Buffett's Berkshire Hathaway has "only" averaged 16% returns but he's been doing it for 50 years, allowing his initial investors to make 10,000 x returns on their invesments.
But that's not the way it starts. It starts in year one with a 16% return and $100,000 becomes $116,000 and then $116,000 becomes $134,000 which becomes $156,000 in year 3 and then $181,000 after 4 years and finally, in year 5, you get to say you've doubled up. While it may seem like you'll never get to $1Bn in 50 years at that pace – the math doesn't lie – you just need to learn how to CONSISTENTLY make good returns.
And, of course, anyone who says they have a better system is LYING to you because, after 50 years of measuring, no investor on this planet is richer than Warren Buffett so it's Warren Buffett's model we pursue, picking up good stocks at good prices and building…