Why I'm Going Cash Heavy | Stock Market.

hey everyone meet kevin here in this

video i'm going to talk about how i have

shifted my portfolio what i'm doing

differently now than what i have been

doing and well we're going to start

right now as soon as i mentioned that

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right folks let's get right into this so

first i want to show this so i always

like to make tweaks to my trading

strategy and my investing strategy and

in the last three months it's worked

really well this is my weeble right here

uh right now this weeble three month p l

is sitting at eight eight five uh and

this is about a four and a half million

dollar account so if i go to p l

percentage here it's about twenty four

point five percent relative to uh what

do we got here i and x i don't know what

uh their s p 500 oh i guess that's what

it shows like on uh on weeble but anyway

uh and you can kind of see it like

refresh here so you know it's like real

about photoshop but anyway 884 thousand

dollars on about a four million dollar

portfolio pretty freaking awesome and i

love that and there are a few things

that i've really been changing in my

portfolio to make sure that i move with

the market rather than try to fight the

market and so i want to start by talking

about arc okay i absolutely love

kathy wood i love arc invest and i love

the strategy of going long on innovation

i think the best thing that you could do

if you wanted to just set and forget

your money

is go long on innovation set it and

forget it and don't come back but that's

not what we do in the marketplaces in

fact when we look at kathy wood's flows

for her funds

we see that kathy wood had the biggest

amount of investments going into her

fund when it was the most expensive

around january and february of this year

and in the last three months we have

seen kathy lose sometimes hundreds of

millions of dollars a day in investments

into her fund in other words negative

investments into her fund are considered

outflows and this means that kathy wood

has to sell stocks that she holds people

are wondering like oh my gosh kathy's

selling tesla well one of the reasons

she has to sell tesla is because people

have been withdrawing money

more than they have been depositing

money in the last few months and this is

not at all a slam against kathy in fact

my belief is you should be buying

innovation growth style stocks when the

prices of those stocks are lower not

when they're higher that makes intuitive

sense now when you look back but in

january and in february what people see

is the arrow going up and it's like oh

god i gotta buy formal form of

homophobia now fomo sometimes works

there are times when fomo works when

you're getting in on a momentum swing

like this right like you get in on a on

a yolo call option on something that's

doing this kind of ride even if you get

in here and you ride it to here you're

still doing good right

but you got to play that timing of it

that's a different from long run

investing and that's a very important

difference for us to remember

when it comes to kathy's sort of buy it

and weight strategy it's important to

remember when you're buying while

kathy's having these negative outflows

in my opinion you're actually making a

pretty decent investment you're buying

companies that that do have innovative

growth coming in the future my favorite

companies right now we know this tesla

end phase

apple amazon google obviously these are

some of the big ones love the fintech

space square

lemonade

whatever right these are some of my

favorite companies even matterport love

these companies

but we're at this really weird place in

the market where i've made a transition

in the way that i'm exposing myself to

these stocks and i believe this is very

important

first the very first thing i keep in

mind is i establish stocks that i know i

never want to sell

stocks that i really ideally keep

long term and i don't even think about

trading them and that makes up about

eighty percent of my portfolio again the

etsy's the end phase the tesla the

innovative new 2021 growth companies

that are going to be growing 25 to 50

percent per year for the next five years

those are the kinds of companies that i

want and i buy and i hold these

companies

but in addition to that

i have previously in like the first half

of this year been really big on buying

call options

leaps

leaps were awesome in 2020. you can buy

leaps blindfolded leaps are just long

dated call options uh you know like that

would be like me buying 20 24 call

options today

something that's uh you know quite a

ways out or even 2023 options today you

know something that's 18 to

30 months out those are long options you

pay a big premium for those i'm staying

and have been staying away from those

since about may i've been staying away

and instead i've been closing these as

much as possible and taking profits on

those stocks as much on those options as

much as possible but i've also been

doing something else so number one i

focus on my longs my innovation plays

that i can continue to sort of buy the

dip on if you will number two i've been

focusing on closing out those long

leap contracts get those out of my life

and the two reasons for that is every

day you hold it costs you money that's

called theta decay and every day that

you also hold it in a market where the

market just in general is becoming less

volatile you know sort of in 2020 if the

market was doing this kind of like your

heart while you're running a mile really

fast right uh now it's kind of more

doing this it's kind of just like fast

rolling and then if it goes down to like

a walk right the the smaller that line

is the more your call options get

punished that you own when you own

options you want this

not in price just in volatility because

you're you're building into a contract

the potential these big potential swings

right

uh so less hurts you when you own these

options okay so number one those long

positions that's the basis of the

portfolio that's money in the long term

number two getting rid of those leaps

number three selling contracts uh and

then i have a special number four two

selling contracts selling puts to get a

lower cost basis into deals and then

when things run and you see an insane

kind of like momentum swing up in a

stock

sell

calls

that these these have been so good to me

selling puts selling calls have been

amazing to me over here on my weeble the

end phase tesla etsy these have been

doing well because of shares that i held

i held shares and in some cases i even

sold calls against them and hippo was an

example of a different kind of option

and this is more a short term kind of

call option play where i'll go out 30 to

45 days and do a short term call option

on something like this now you have to

be really careful with call options

under 45 days because the theta decay is

insane so in my opinion either you make

it or you break it and you get out and

i've lost money doing that and i've made

lots of money fortunately i've made a

lot more money than i've lost but that

is like playing roulette where you have

the odds slightly in your favor i kind

of feel like short-term call options are

like uh 70 roulette wheel where you're

going to lose 30 of the time

sometimes even for some people 40 45

percent of the time my goal is to keep

that at like 70 percent win rate and 30

loss but i know they're going to be

losses on on shorter term call options

so you just have to be careful with

those because it's much more volatile

and things can flip on you very very

quickly so uh what i want to show you

now is sort of my cache position and the

cache kind of portfolio and i'm going to

recap

what my strategy here has been

and go through it maybe in a little bit

more detail so take a look at this this

is my portfolio right now we've got

i've got four and a half mil in weeble

of uh

in addition to that 307 thousand dollars

are cash

m1 finance uh 1.2 million of that 37 is

cash 37 000 sorry not of that it's in

addition to that

uh robin hood 1.1 million in stocks

options and crypto in addition to that

970 000 in cash i just posted a ton

of uh closing alerts as well on

robinhood i closed like 10 different

contracts this morning on uh on robin

hood so that's why i have a ton of cash

right now in robin hood

jp morgan 12.7 in stocks and options

540k cash here's another jpm 159 stocks

52 cash

bank accounts one for

public 79 just in stocks block fight

this is all bitcoin 218 private equity

these are like three different companies

that i've invested in uh 1.7 million

coinbase 395.

this is for cardano and ethereum mostly

which those are way up because i only

put in like 100k so that that has been

very very uh very much a blessing

uh 50 here in td ameritrade

uh in cash i never that's for like otc

stocks if i ever buy anything over the

counter i have that ready to go uh and

then so this doesn't include retirement

accounts so it's about 22 mil

not in retirement accounts

and about 3.38 of that is cash so that

means cash to portfolio is sitting

around 15.29

uh with zero percent margin no money on

debt against my stocks

and uh then of course there's the real

estate portfolio on top of that

uh but uh yeah so how how

did how is it possible to pull this off

in in a three-month period of time well

my opinion it was really a matter of

changing uh

adjusting my strategy i want to say i

don't want to say like a big uh a big

change in my strategy it's an adjustment

you have to kind of move with the market

you got to know okay volatility's

falling time to dump those leaps

time to sell contracts instead because

as volatility falls

your

sold contracts go up in value so this

really really helps when there is

momentum identify this has become a

momentum stock

that means when it starts falling and

the momentum is over the momentum's over

even though it might have tiny little

blurps back to life when the momentum's

over it tends to be over so something to

watch for uh you're always gonna have

crazy fluctuations in the market though

so so recognize that as well

but but consider the four main things

here

long on big portions big things you

really really believe in

minimizing the amount of leaps you have

selling puts and selling calls to lower

your cost basis

and then fourth

when you do the yolos

recognize momentum quickly and fast in

out but keep that to a small part of

your portfolio in my opinion i call that

like the entertainment portion of the

portfolio to make the other stuff

fun uh because you want to be careful

with that though

uh you don't want that to be your whole

portfolio you should be buying real

estate instead uh and so this is where

you can kind of see the manifestation of

that sort of real estate cash crypto in

my portfolio a lot of stock

no debt

but you're seeing my cash balance grow

substantially and i'm buying a real

estate deal i'm closing on a real estate

deal next week you've seen my

uh crypto balance grow and so this is

really because i've transitioned in this

market

very slowly you know i think just the

more modifications than transitions it's

not like i took 80 of my portfolio that

was long tech and i just dumped all of

that and went into like a reit right or

went into like

i don't know industrials or defense

stocks or whatever it's not like i

massively u-turned really what i just

did is i decided okay i took my

portfolio that's really really long

innovation and growth

moved some of it in may into long call

options a lot of them did very well some

of them did not do very well

and uh it and then realized okay calls

we're going to be in a problem if we

continue through this volatility crush

which was the last thing we were really

thinking would happen between february

and may because come on like between

february and may that was such a bloody

market it seemed like volatility would

be going up not down right

but volatility got crushed between then

and now and so that's why it shifted

shifted to selling options uh and and

this has been very very beneficial just

to give you an example as to how how

this could work so that way like if

you're not familiar with how to do this

this would i think give you a head start

okay so here is an example of where

robin had this insane momentum and this

insane run i did not peak sell these

calls but i did sell a hundred call

options against robin hood one set of 50

and then another set of 50. one on this

day one on this day so what i did with

this contract just to show you an

example of the strategy is when

robinhood was at those highs i thought

this is really high this is crazy

momentum robinhood is not worth 70 a

share let me just go ahead and sell

a call option to somebody else that

means i'm giving somebody else the right

to buy my robin hood shares for 75

dollars on or before december 17th

usually they don't exercise you before

that date but they could but anyway i

gave somebody this right and i got a

credit for about 57 000 in exchange for

making that agreement now we're not yet

at december 17th but this morning i

realized that this contract its market

value has already realized the potential

of 93 of that 57 000

which means i can now go to the

marketplace buy that call option back

that i sold which closes it out

basically because i sold it i sold 50

contracts now i buy back 50

and i'm just paying

3750 to do that which you could see

right there under my head i would pay

3750 to do that and then i would keep

the 53 000

and i keep my shares right so now i

could have sold the robinhood shares but

this just gives you an example of how a

covered call can really help you hedge

yourself when there's crazy momentum

especially in a market where volatility

is going down which is in your favor

remember when you sell option contracts

you gain theta decay the seller gets the

theta decay and when volatility goes

down the seller gets that volatility

benefit in pricing so this is how i've

modified my strategy in these four ways

and some people like oh kevin like one

day you're talking about rcc and the

next day you're buying stocks that's

okay that's the point the whole point

that i'm putting money into like real

estate cash crypto is so that when

opportunities come up for me to buy in

the stock market i can buy them but

right now i look at the stock market on

a daily basis i'm like

what is there to buy like nothing's like

a screaming deal right now i mean i

think hippo is way undervalued under

five dollars right now at 4.95 i think

it's way undervalued uh that's why i

bought it the first time i bought it for

like 480 the first time around i thought

oh my gosh under five under 525 this is

a screaming deal uh but whatever you

know it so maybe it had some momentum

and then that evaporates fine that

happens i still think it's a good deal

uh you know you can't you can't like arm

wrestle the market

but anyway uh yeah these are my thoughts

so i really appreciate you watching this

video hopefully this update was helpful

and insightful for you if you like this

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next video thanks for watching bye

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