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This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
A step-by-step guide to selling puts… The upside is big gains on invested capital… The downside is owning shares of a company you already want to buy… The options market is willing to pay a substantially higher premium for this company… Foreign banks are unloading U.S. Treasuries… |
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In June, Porter & Co. will be launching the Trading Club, a new service that will guide subscribers through a series of actual trades using strategies such as put selling, covered calls, crypto buying and selling, special-situation investing, and more.
So today, Porter is turning the Daily Journal over to Big Secret On Wall Street analyst Ross Hendricks, who will be taking the lead in sharing trading methods with Trading Club subscribers… Ross walks readers through a real-time strategy that involves selling puts on a high-quality, oil-and-gas royalty company.
Here’s Ross…
In last week’s Big Secret On Wall Street, we shared a trading strategy that Porter wrote about in 2015, which is just as relevant today, describing the safest way to make a fortune in distressed markets:
“In the bond market, the key to success is avoiding default. In the stock market, the key to success is even easier: it’s to only sell puts on stocks that you’re genuinely happy to own and at a strike price that reflects an excellent value.”
Porter went on to describe how his recommendation to sell puts in shares of the high-quality jewelry brand Tiffany in February 2009 generated a 29% annualized return, while taking virtually no risk (the only downside was owning one of the world’s best jewelry brands at a deeply discounted price).