Wall Street’s Biggest Myth, Busted… and What It Means for Your Liberty
Andy Snyder|February 13, 2020
We were invited into the presidential suite of a swanky Baltimore hotel on Tuesday.
The bellhop probably thought we were lost.
But we were invited there for an interview. The crew is filming a multipart documentary about wealth, and they wanted to share our story.
It was fun. But we admit, we unloaded some big ideas on the host.
We dove into why we do what we do… our time in Alaska’s wilds… our farm… and, of course, what everybody seems to want to know about these days, our award-winning investment strategy.
But the host – who we consider an intellectual giant – kept coming back to a key theme.
What is it, he asked, that so many folks are doing wrong?
Oh boy… we looked at our watch and asked how much time he had. This was a daunting task.
But we got out our verbal knife and whittled our thoughts into just one sharp idea.
99 vs 1
Be specific, he said. What is it that the successful wealth builders are doing that others are not?
“You already answered your question,” we said.
The successful are simply doing what others aren’t.
We went on to use the same words we’ve tapped out so many times in these essays. If you do what everybody else is doing, you get what everybody else is getting.
It’s the very definition of mediocrity.
Look, we said, the internet is great, but go online and search for “proper portfolio diversification.” You’ll get 99 versions of the same old tripe before you stumble across advice that’s actually worth reading.
Most folks, though, blindly follow the 99. And they get just what we’d expect.
Take a topic we’re quite passionate about these days… options investing.
Go online and read about options trading.
Within an article or two you’ll read a classic myth that 90% (or more) of options expire worthless – making them a horrible investment.
The internet has spread this falsity far and wide.
The truth is that options can actually reward investors at much higher rates (if used properly).
The vast majority of contracts – in the realm of 60% – are closed and taken off the market long before they expire. That means they had significant value and most likely represented a gain for their owner.
Out of the 40% that are not closed, 10% of them are converted into shares of the stock – again, most likely for a profit. The few that remain are those that expire without a value.
But here’s the thing with those few contracts – again, it’s what the typical never-bother-to-think essayist fails to cover. Those contracts likely started life so far out of the money that they were purely a speculative gamble. They aren’t the sorts of options contracts the average investor should be buying.
For example, in Manward Trader, I rarely (if ever) recommend any options contract that requires the stock to move 15% or more before guaranteeing the option doesn’t expire worthless. Most of the time the figure is less than 10%.
By using this rather conservative approach, we increased our win rate dramatically.
The last time an option we recommended in Manward Trader expired worthless was September.
To prove it, we showed the interviewer a note we sent to our readers earlier this week.
It detailed how much money subscribers would make if they closed every one of Manward Trader‘s current options positions.
They’d walk away with incredible gains of 302%… 41%… 196%… 42%… and – our lowliest gainer – 18% (and still climbing).
Then we told him about a couple of emails we got on Monday afternoon from new subscribers to our Codebreaker Profits service.
Wow, my first time winning 89%. Big thanks to you all. My account is small, so one step at a time! – Subscriber P.W.
Hi Andy: Purchased 20 contracts at $1.80 and sold all at $3.30. Total net of $2,973.14. Thank you very, very much. – Subscriber L.N.
We get all sorts of notes from readers with much higher dollar amounts. But these are the ones that keep us getting up early each morning to do what we do.
They’re the notes from first-time traders… folks who are just starting to build their wealth… and, most important, folks who promised themselves that 2020 was the year they’d get serious about getting rich.
Clearly… with our system… most options don’t expire worthless.
The myth is busted.
Make a “Right” Turn
We don’t know when our interview will hit the air. But when it does, we pray viewers come away with one simple idea.
Every day we come to a fork in the road.
We can take the well-worn path traveled by 99% of folks… seeing and getting what 99% of folks get.
Or we can make a right-hand turn and travel down an untrodden path that may still have some weeds poking through that will tickle our ankles as we walk.
Take that path.
We beg you.
It’s the only way to get somewhere different… where you truly want to go.
Finally, we’ll host a bit of a Q&A on the subject tomorrow. Send us your questions and comments on all things investing (ideally options related) with an email to email@example.com.
Andy Snyder is the founder of Manward Press, the nation’s premier source of unfiltered, unorthodox views on money and what it means for a free society. An American author, investor and serial entrepreneur, Andy cut his teeth at an esteemed financial firm with nearly $100 billion in assets under management. Andy and his ideas have been featured on Fox News, on countless radio stations, and in numerous print and online outlets. He’s been a keynote speaker and panelist at events all over the world, from four-star ballrooms to Senate hearing rooms. Today, Andy’s dissident thoughts on life, liberty and investing can be found in his popular daily newsletter, Manward Financial Digest.