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In 1980, Stewart Horejsi (pronounced hor-ish) was a tired Kansas businessman.
Then, he got a tip on an up-and-coming investor named Warren Buffett…
Over a few months, Horejsi bought 300 shares of Buffett’s company, Berkshire Hathaway. His average cost basis was $314 per share.
Today, Horejsi’s a billionaire. (His initial 1980 buy made him a deci-millionaire. Over the years, he added another 4,000 shares to his portfolio.)
The chart below tracks the share price of Berkshire Hathaway (NYSE: BRK-A). Between March 1, 1980, and today, Berkshire Hathaway has gained 74,992.31%.
“Class A” Berkshire shares—the ones Horejsi bought for $314 each in 1980—now trade for $195,240 per piece.
Now, it’s easy to get rich investing when Warren Buffett is your “money manager.” Over the course of his career, Buffett’s earned an average return of 19% per year.
Booking such a high return—year after year, over decades—is an astounding feat.
But the biggest mistake in finance is thinking you can’t do something similar.
Tucked away in the premium-service section of PBRG is an options-trading service: Palm Beach Current Income.
It sports an average annual return of 16.7%… about 2% less than Buffett’s.
Let that sink in for a moment…
Warren Buffett is the greatest investor of all time. He purchased his first stock at age 11. He studied under Benjamin Graham—the “father of value investing”—at Columbia Business School. His investments now earn him around $40 million per day.
Yet, anyone with an average intellect—and a desire to learn—can post returns almost as high as Buffett’s.
And they can do it with safety. The PBCI program has a 98.2% win rate (164 out of 167 trades).
I asked Tom to “pull back the curtain” a bit more on the PBCI trading approach…
I want everyone to understand how easy this system is… how lucrative it is… and how safe it is… no matter the market environment.
J. Reeves: Tom, your investment track record speaks for itself.
You quit Stansberry Research in 2011… Yet, your name’s still on three of its top 10 open recommendations. It’s no wonder people are calling you the “Market Messiah” on Periscope…
How did you discover and develop the income-producing technique used in Palm Beach Current Income?
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Palm Beach Research Group Founder Tom Dyson: I’ve known about it for years.
I first saw it in use—in a serious, deliberate way—on the trading floor at Salomon Smith Barney.
Traders used it to generate very stable income streams to boost their returns.
I first used it during the 2008-2009 bear market.
I showed readers how to buy the best companies in America—like McDonald’s, Coca-Cola, Wal-Mart, and Johnson & Johnson—at incredible prices… and secure more than 10% cash-income yields from these stocks.
These are some of the greatest trades I’ve ever made.
J. R.: Regular Daily readers know you see a major deflation underway in the economy (it’s why you’re so bullish on the U.S. dollar). This has many subscribers worried. Is selling options a safe strategy in a deflationary environment?
Tom: Yes. Volatility rises a lot in a deflation… And options prices rise with it.
That’s because as fear rises, people are willing to pay for more options “insurance” to protect their positions.
And when you’re selling options at higher prices, you make more money. As long as you play it safe and sensible, you should earn between 15% and 20% per year in cash income, with very little risk.
J. R.: If I’m selling puts and the stock goes down a lot, I may lose money on the trade. How is this a safe, profitable strategy in a bear market?
Tom: Two reasons:
- A bear market—and the accompanying volatility—doesn’t depress all stocks at the same time, nor at the same rate.
There are crashes and bounces. It’s like a roller coaster… and every sector moves differently.
Some weeks, commodities might be tanking. Other times, it could be tech stocks. This week’s Valero trade is a good example.
Deflation will shake things up in the stock market. But—if you have the correct safety measures in place—that’s exactly what you want when you’re using a put-selling strategy like PBCI.
That’s because we’re not buying and holding stocks. We’re making trades with time frames between two weeks and three months.
It’s an opportunistic strategy. And deflation and volatility throw up opportunities… much more than in a stable bull market.
- A deflationary environment is bad for stocks, in general. The stock market will fall, often more than 50%.
On the way down, we’ll use options to make a lot of money. At the bottom, there’ll be incredible companies for sale at dirt-cheap prices. Then, we’ll make long-term purchases and bank double-digit cash-income streams through dividends.
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J. R.: Many of our subscribers aren’t used to a prolonged high-volatility environment. Does a high Volatility Index—or VIX, the market’s “fear gauge”—make options selling extra risky?
Tom: No. It makes options selling lucrative. As I mentioned, options become more valuable in a high-VIX environment.
Now, understand: Yes, the underlying stocks are volatile… and more prone to fall… But this is what we want.
All market conditions are risky and dangerous for the undisciplined options seller. Our put-selling strategy is simple and easy to learn.
But it also requires thought, discipline, and control. With these, a high-VIX environment maximizes the potency of the PBCI strategy, and minimizes risk.
Reeves’ Note: Tom’s so confident in Palm Beach Current Income, he’s decided to offer a $1.5 million wager to our subscribers over it. Yes, this is real. Click here to take part…