The H.E.A.T. Formula
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The H.E.A.T. Formula is a radically different way to look at investing your portfolio.
H- Hedges, you should always have hedges and be agnostic as to being long or short. Bonds are not a hedge
E-Edges, you should always look for edges. Preferably these are edges with some sort of psychological underpinning, structural edges, or some sort of barrier to entry.
A-Asymmetric. Everything you do, be it trades or your overall portfolio, should be designed so that heads you win a lot, tails you lose a little.
T-Themes. You should always be invested in the top themes. Most everything else is just noise.
We will continue to build out our resources here to help. In the meantime we have a model Hedges and Edges ETF portfolio.
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Our Next Webinar will be January 23,2025 at 2pm EST.
How to Make Money In Markets During 4 Years of Trump
-Three Major Investment Themes Nobody is Talking About
-Why Crypto is a Must Own and How to Trade it With Asymmetric Risk
-Three ETFs That You Want to Almost Always Be Short
-Dangers of Covered Call ETFs and a Better Approach
Register Below:
https://attendee.gotowebinar.com/register/980141392770803292
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Stocks broke a losing streak on Friday. QQQ had an undercut and rally at the 50 day on Thursday that could have been a long entry....
SPY had an undercut and rally on Friday.....
Short term that suggest a bullish bias.
If you are a bull though, you would like to see interest rates come down.....
VIX collapsed on Friday. I have UVXY puts I will look to take profits on shortly, and may consider going long VIX if it keeps dropping.
I do not agree with this however.....
Stock Market Volatility Is Back. Here’s How to Play It.-Barron's
There are lots of ways to play it. Larry Connors and Rob Hanna have some good systematic research out there on different RSI levels and contango for going long VIX. I prefer to be discretionary on it, but certainly keep an eye on the RSI of the VIX and the S&P. I'd like to see the 4 period RSI below 30, and preferably below 20, for me to go long VIX.
Looking at the top performers from 12/27-Friday shows a trend:
Lot of oil and gas and other power names.
@Eliant_Capital, who has a great newsletter, talked this weekend about going long some names that have sold off on the DOGE news, specifically LDOS and PSN. I would also through BAH in there as well. Unfortunately for me I already own BAH, but may look to add. I love the LDOS and PSN charts as well.
News vs. Noise
This is stupid. Always have hedges in place and design your portfolio and your trades for asymmetrical returns....
How to handle a stock market downturn — without breaking down-MarketWatch
Noise. When don't we have uncertainty?
In Times of Economic-Policy Uncertainty, It May Be Best to Avoid Stocks-WSJ
Amazing advice below:). I do like crypto here, but if you want exposure and are nervous you can do a couple of things:
- You can use credit spreads on IBIT to buy calls on the levered Bitcoin ETFs
- You can use credit spreads on IBIT to buy calls on a correlated crypto stock (either levered or unlevered)
I put this idea into ChatGPT:
Upside vs. Downside Profile
- Bullish Bias Overall: You think Bitcoin is going up. If Bitcoin indeed rallies:
- The IBIT call spread loses money once IBIT’s price goes above your short-call strike.
- But your long call on BTCL gains potentially unlimited upside beyond its strike.
- Net result could be profitable if the BTCL call’s gains exceed the IBIT call spread’s losses.
- If Bitcoin Falls or Stays Flat:
- Your short call spread on IBIT likely makes some or all of the premium (a positive).
- Your long ATM call on BTCL could expire worthless.
- The net might be near break-even or a small gain/loss, depending on your initial premiums and cost outlay.
Bitcoin could top $125,000 or fall towards $77,000 this quarter — depending on what Trump does next-MarketWatch
Noise.
Forget Santa: Stock-market bulls look to ‘January barometer’ for clues on 2025-MarketWatch
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Before you go: Here are ways I can help
- ETFs: We offer innovative ETFs that cover all aspects of The H.E.A.T. Formula, Hedges, Edges, and Themes.
- Consulting: I'm happy to jump on the phone with financial advisors at no charge. I've built a wealth management firm and helped other advisors grow their practices through the use of substantially differentiated investment strategies. If you want to talk just send me an email at mtuttle@tuttlecap.com
- Monthly investing webinars
- Weekly trading strategy podcast-Coming Soon
- Weekly investing podcast-Coming Soon
- Wealth Management-Coming Soon
