Samwise Model Portfolios
The portfolios below are separated by launch dates. Each portfolio is entirely independent and has no bearing on any other model portfolio. We launch entirely new portfolios during each market correction as an illustrative tool for new subscribers who weren't present during...
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When breakouts after consolidation occur, do they tend to occur during market hours or does there need to be some well defined catalyst leading to a leg up at open?
It could happen after-hours but it must gap-up above the resistance line the next day or it’s meaningless. There doesn’t need to be a catalyst at all. one day it could just be up $4-$5 as momentum comes flooding back into the market.
Thanks. Do you still see near term forecast as QQQ reaching 520-525 in the next few trading days?
Is it completely reckless to wait until after earnings to sell CCs?
It would be not ideal. I mean the whole point of selling covered calls is to hedge out the risk brought on by earnings AND to capitalize on broad moves higher. Nviida was trading at $100 just two months ago right? That means it has run 50% from its lows in September. We have to capitalize on these moves to reduce our cost-basis over time.
If each time Nvidia moves up 50%, we sell covered calls and win on that trade, we could end up reducing our cost to near $0.00 over time. That’s the goal here. Partly to hedge. Partly to reduce our basis and hence our risk to nothing.
Understood. Thank you for the response.
Do you think NVDA has the potential to drop right after ER drop just like it did Q2? Feel like same thing could happen since many people will be playing ER.
Yeah. Very easily. It’s why we’re inclined to sell covered calls against our Nvidia and NVDL positions ahead of earnings. But I think longer term Nvidia will move higher and I think the impact from earnings will be a lot lower than it was in September. I don’t think Nvidia is liable to drop $30 (23%) like it did last time in September. I think if it does pull-back after earnings, it likely holds above $130 and ultimately it probably turns around and runs back up to the $150 area that we’re seeing right now.
Thanks Sam on explaining your over arching philosophy. I really appreciate your calculated approach to investing. This site has been a great help to my investing.
No problem bud. Thanks for the support.
Hey Sam, you mentioned we were still waiting to hedge our NVDL position, buy selling 1 CC to hedge the 140 shares. If we owned 200 shares would you be selling 2 contracts? Or are we hedging a third of our shares as part of the strategy? I guess I’m asking, what percentage would we be hedging ideally?
So because we own 140 share, we can only sell 1 contract. If we owned 200 shares, we would sell 2 contracts.
The reason we decided not to sell options yet is because the market responded favorably to the election and we are waiting to see if Nvidia pushes north of 150 even briefly. With that 150 push ahead of earnings that’s when we would sell.
However, if Nvidia doesn’t push north of 150 before next Wednesday, we will sell a covered call anyway.
As we mentioned earlier in the week, we will probably sell either the January $95 or the $100 calls for NVDL. Both positions are totally fine and have various pros and cons. But both calls do you work as a hedging tool.
We are also eyeing the Nvidia January $170 calls for our Nvidia positions.
Thank you.
Given the pre-market moves on 11/15, has the correction actually started earlier than we thought?
Just the 3-4% pull-back. I doubt a full 10% market correction has started. The market is now oversold on the hourly. So probably the pull-back we were expecting in the mid-$520’s. The QQq rallied a total $35ish points from $483 up to $516. It’s a smaller run, but we get 3% pull-backs at risk at that point.
Got it, so the bottom should be in shortly, and we should get another breakout soon?
Just saw you posted about this, thanks.