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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I noticed Granite Shares also has a leveraged short product NVD for NVDA. Could the easy retail access to a short position, combined with the law of large numbers you spoke about yesterday, distort its future trading based on its history prior to popularity of these leveraged products?
Probably not by much because we’re talking a $3T+ market cap company. The float is way way too large for a leveraged ETF to have any sort of long-term impact on the stock.
Short-term maybe. Depending on how thinly traded the shares area in different eras. But long-term, valuation always controls. That’s the generally accepted principle of the stock market.
Short and intermediate-term can be determined by any number of different variables and factors. But valuation determines the ultimate direction.
It’s why investing for the long-term has the highest likelihood of success. It’s because there’s a lot of confidence in where stocks are headed long-term.
Analyst price targets are generally met long-term.
Thoughts on how Broadcom’s earnings this week will influence NVDA?
It will have a mild impact like we saw in summer. But NVDA has other things going on with it right now. Regardless of how AVGO impacts the stock near-term, once NVDA reaches oversold on the hourly, it will open up a short-term trade set-up.
SO just the stuff we outlined today. In the end, the technicals will control in the near-term. Once Nvidia becomes extremely oversold — regardless of the reason which might include poor earnings performance by AVGO — the stock is going to snap back and rally to the mid-$140’s again.
But once the NASDAQ-100 as a whole sustains an intermediate-term correction, so will Nviida and that’s where the big opportunity to make some larger returns will emerge.
hey sam, in this sentence you say “But then we have bought the Dow and the SPY which might point in the direct opposite direction. I do think if Nvidia does pull-back a little more and manages to see low 20’s, it’s a buy regardless.”
did you mean to say low 30’s as depicted by the first NVDA graph? thanks!
So low 20’s on the RSI. IN the low 20’s on the hourly RSI, there’s a high probability trade there. Going long Nvidia at 20-RSI hourly has almost always lead to a solid trade eventually.
Sometimes it will trend lower first, but what we can see longer term is that if you just hold the position, it will be profitable within a few weeks time at most.
If you go back and look at summer for example, Nvidia reached a 20-RSi near $110. Nvidia did trend to as low as $100 over the coming days. But then it rallied straight up to $120. If one had bought at $110, accepted the potential drawdown to $100, they’d profit when all was said and done.
And that is the rare exception. In most other cases, Nviida hits a 20-RSI and it’s often an instant winner. Like we saw a few weeks back.
That $13 contract we wanted to buy went up to $20! We could have made 60% on that short-term trade had we pulled the trigger.
So what we’re saying is if Nviida rolls over here and drops to a 20-RSi, we’d go long.
With $GOOGL making huge news on Quantum Chip ‘Willow’, and being an undervalued stock since sometimes as it still haven’t touched its July 2024 peak, do you think its calls are better than $NVDA for Dec’25?
So it may just be a good separate bet. I need to see what happens during the next correction and how undervalued different stocks are at end of it.
We’ve been on a rally now since August/Sep. We’re going to enter a corrective period soon. Once markets are oversold, everything will go down with the broad market at varying degrees. Some stocks will provide better opportunity than others.
I wanted to learn more about the new portfolio you’re envisioning (Baratheon?). Could you share some details about the set of instruments you plan to use and the general strategy you’re considering?
Currently, I’m 100% in cash, awaiting the launch of a new portfolio. Over 90% of this cash is locked in registered accounts, which allows me to trade stocks, ETFs, and leveraged ETFs, as well as buy calls and puts, and sell covered calls. However, I’m unable to short any positions. In the past, I’ve utilized leveraged ETFs extensively for my strategies.
I’m debating between opting for a Tyrell-style approach or aligning with this new Baratheon concept. Your thoughts on this would be greatly appreciated.
Looking forward to your insights!
So right now we have four broad categories of portfolios and they’re all independent.
We have long-term common stock only portfolios which represent the lowest overall risk. There the strategy is simple. We buy during corrections, hold the positions during rallies and when the market has gone far enough, we’ll sell covered calls against our positions. The point is to capitalize on the ultra long-term direction of the market.
The last such major generational shifting opportunity was the lows of the 2022 bear market. But there will be other smaller opportunities during each correction.
The best way to play it is to always maintain a hedge that pays off big time on a bear market. Here’s why. there’s no way to really know when we’re about to enter a bear market. But if you’re always positioned such that in teh event of a bear market, you make out big time, then it allows you to use the capital you’ve made in the bear market to go super long.
For example, if we’re able to only lose 5-10% of our cost-basis on a 40% crash, that’s a huge win becuase it means we get to buy at a net 30% discount.
Tarly & Tyrell are model portfolios that follow this general strategy. In the Tyrell portfolio, we own 1 contract in the QQQ Dec 2025 $450 puts to off-set our 108 shares we bought at an average price of $463.22. if the QQQ crashes and drops to $300 a share between now and next December in some massive bear market, our QQQ puts would rise to $160-$170 producing $15,000 in gains to off-set what would be about $15,000 in losses in the QQQ long position. We also own 240 shares in Nvidia long at $103.70. If Nvidia crashed to $60 a share or something on some massive slowdown or other bear market issue, our Nvidia $85 puts rise to $30 off-setting any losses sustained in our Nvidia long position. So that’s the general idea regarding being long for the upside and hedged against the bear market. We’ll eventually do the same for Tarly.
The second type of portfolio is similar to the first kind except that instead of owning common stock, we own leaps. Lannister & Arryn
Then we have the high risk high reward portfolio in Targaryen. To give a sense of how we view Targaryen, we only have $5k invested in Targaryen relative to the $100k invested in each of hte other portfolio. Targaryen is meant to be a highly speculative portfolio.
Targaryen aims to capitalize on a very particular strategy. that is to go long during high volatility periods on corrections a few times a year.
Baratheon is different. Baratheon is similar to Targaryen. It’s a trading portfolio that we plan to allocate $10k into. A very high-risk, high-reward portfolio. It’s for momentum trading to conquer bordem and impatience.
I do strongly believe that long-term investing is where it’s at. Go long. Get hedged and produce consistent returns over the long haul. The market is always trending higher with period bear markets in between longer bull market runs. The key is to capitalize on these bull market runs.
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Now we might add another portfolio that involves stock replacement strategies. Ways to own options instead of common stock. I have to think about how to do this because there are a number of different strategies and some are high risk while others aim to reduce risk as we showed yesterday.
I’m looking forward to this Baratheon too.
So I understand that I will likely use Tyrell-style for my registered accounts. It will be perfect as long as we don’t have to enter any short-call or short-put.
Hello Sam,
Whats happening with Quantic stocks ?
It’s crazy…
What do you think the impact of Robert Baratheon changing career into whale fur trading and then getting killed by the Mother Superior would have on the Baratheon portfolio? Can the portfolio perform despite his incompetence? I mean, come on. First it was a pig that did him in, now an old lady.