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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Fed Official Says Further Rate Cuts Can Wait-WSJ
Woefully behind the curve, this is what the bond market has been saying for a while now.
Here's a weekly chart of TLT, it is now the lowest it has been since April......
Big takeaway for me is that bonds are not a risk reducer to your portfolio. I actually think TLT is a long here, pending what the jobs numbers tell us later this morning. However, I played it short term, using a credit spread on TLT to buy calls on TMF (3x TLT). I need a bigger move to be profitable, but if I'm wrong and we make new lows then I probably break even.
What's going on in California is horrific, but every event creates opportunities for investors...
L.A. wildfires to cost insurers more than $20 billion. Three companies are likely to foot most of the bill.-MarketWatch
Allstate Corp. ALL+3.10%, Chubb Ltd. CB-0.79% and Travelers Cos. Inc. TRV+0.45% are likely to be the publicly traded insurance carriers most affected, as they are the most exposed to the California homeowners’ market, J.P. Morgan said. Chubb is of particular concern because the company has focused on high-net-worth policies, and the areas affected by the fires are mostly affluent residential neighborhoods.
I asked ChatGPT, it singled out ALL and added MCY.
I then asked GPT what companies would benefit most from the rebuilding....
Ultimately, the biggest beneficiaries are those directly engaged in rebuilding structures and infrastructure—particularly if they have strong footprints in California and can mobilize resources quickly to meet the surge in reconstruction demand.
I then asked for a list, here are the publicly traded names.....
GVA
ACM
J
TTEK
STN
KBH
LEN
TPH
The companies listed above—ranging from heavy civil builders like Granite Construction to large engineering firms like AECOM—combine on-the-ground presence in California with expertise in large-scale construction, design, or environmental services. These attributes position them as likely key players in post-wildfire rebuilding efforts across residential, commercial, and infrastructure segments.
Themes
AI Power
Jeffries initiated Ormat Technologies (ORA) at a hold. I own the name figuring that data centers will need all of the above when it comes to power. This line from the report is particularly troubling....
Data center avenue lingers for Geothermal. ORA's storage fleet is ideal for data center & AI tailwinds, but we emphasize that ORA's legacy geo biz could follow suit. However, the roadblocks to ramping quickly on new geothermal capacity (namely the >5yr timeline vs. 1-2yrs for storage) to meet accelerating demand keep ORA from fully cashing in. And while power prices are clearly elevated as a result, we don't necessarily see this as a material avenue, given such constraints.
Here's what ChatGPT had to say.....
Bottom Line: If data center operators prioritize 24/7 carbon-free baseload and are willing to sign long-term power deals at premium rates for reliability, Ormat stands to benefit. The company’s steady growth in geothermal and storage, combined with rising AI-driven power demand, could provide a meaningful long-term growth avenue—provided it navigates the geographical and competitive constraints effectively.
On a 1–10 scale, where 10 indicates the highest potential for benefiting from AI’s growth, I’d rate Ormat Technologies (ORA) around 5.
I agree.......
Buy Constellation Energy Now? Calpine-Induced Slide Creates Opportunity.-Barron's
Undercut & rally Wednesday at the breakout low.
Quantum Computing
Quantum names coming back a bit this morning. I added RGTI on Wednesday. This could be the culprit.....
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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
