InvestingWithBrandon

The number one thing that moves stock prices long term.
EPS growth. Earnings per share.
That is it.
If you figure out where the profits are going.
Get in at a good valuation level.
Into a good company.

You are going to make money.
That is the whole game.
Options are not the strategy.
Options are just the layer to magnify.
You find the good company at good price with EPS growing.
Then you sell puts & buy calls on top to magnify it.
Options without fundamentals underneath is just gambling.
All the stocks on my list right now.
EPS going up.
Stock beat up.
Good valuation to enter.

Most people start out as gambling speculators in the stock market.
Once you get smoked enough times you'll understand why I take a longer approach with everything.
Shares. Portfolio secured puts. Bought calls.
Longer not only makes more money.
It's MUCH easier.

I tracked 5 options strategies over 10 years.
Here is how they ranked.
D tier — Covered calls.
Bullish with one hand. Bearish with the other.
You cap your upside on the exact companies you love most.
NVIDIA went up 10x. Covered call sellers missed most of it.
C tier — Cash secured puts.
Right idea. Wrong execution.
All that cash sitting there doing nothing while you are bullish.
B tier — Buying puts.
Hard to be consistently right on timing AND direction.
Theta eats you alive while you wait to be right.
A tier — Buying long duration calls.
Works well when cheap. Still requires timing.
S tier —

Strike price selection for sold puts.
Most people overthink this completely.
Here is what I do.
I only sell puts on things I already feel are undervalued.
Then I go 10% below the current price.
Q at $600?
I sell the $540 put.
I am already buying something cheap. (assuming this in the example)
Then I am going 10% below that.
The market has to fall 10% from an already undervalued level to put me in assignment range on expiration date.
& guess what, I always have my ratios in check to be able to take assignment no matter what!
I will be happy to get paid to buy shares cheaper in the future and no

THE S&P 500 JUST DID SOMETHING VERY FEW PEOPLE UNDERSTAND
EPS growth just came in at 27.1% YoY.
That is NOT normal. That is explosive.
Most people don’t realize this but the market’s long term return of around 10% per year comes from earnings growing around 10% per year.
Profits drive stock prices.
So when earnings are growing at 27%... and the market is moving up…
That move is not random.
It is being justified by fundamentals.
Not all of it.
But a lot of it.
This is why the market does NOT need to crash just because it ran.
The floor just moved higher.
Now here is what actually matters…
First

Most retail investors doing monthly puts think they are going to win...
Here is the math that ends that argument.
Market gets cheap.
I sell one 2 year put.
Collect $20,000 ish.
You sell monthly puts on the same company.
$1,000 per month average.
You make money in the up months.
You lose in the volatile months.
You have to sell at the top when it is not compelling.
After 8 months you made $8,000.
I made $20,000 in one trade when the market was cheap.
Took the premium.
Bought shares.
Bought calls.
Sat back.
4 months later the market rebounded.
I closed the 2 year puts at 75% profit.
I held

The Nasdaq $Q just bounced over 20% off the April lows.
(the crazy part... we might just be getting started)
Why?
EPS growth is VERY VERY strong!
The Economy? It's solid right now.
Overall valuations? Only a tad hot.
Interest rates? Historically low.
Those are the 4 key needle movers for stocks in the long run. Right now... it looks good.
Will we get lots of volatility though? OF COURSE!
Don't plan to ride a roller coaster and not feel some bumps.
Stick tot he plan and keep your emotions in check. Profits will dictate where the market goes, and right now its strong!

THE STOCK MARKET IS DOING THE UNTHINKABLE RIGHT IN FRONT OF US
84% of companies beating EPS
81% beating revenue
And people are still calling for a crash.
Read that again.
This is not a weak market being propped up by hype.
This is a market being driven by REAL earnings strength.
When profits are this strong, prices HAVE a reason to go higher.
That is how markets work over time.
Everyone wants to fight the move because it feels too fast.
But the reality is simple
EPS is strong & share prices will follow that in the long run.
Will we get pullbacks? Of course
But the floor is rising underneath yo

17% in 2 weeks.
That is not normal.
That is not what your forward returns are going to look like from here.
Take a chill pill.
Forward PE is back above the historical average.
Future expected returns are mathematically lower.
If you bought into the panic. You won.
If you sold during the panic. You lost.
If you sat on your hands. You watched.
The next leg of returns is not vertical.
It is a slow grind with chop and dips.
That is fine.
That is how markets actually work.
Stay patient.
Keep ratios in check.
Wait for the next truly compelling setup.
If you cannot do that.
You are going to give back

The 5 filter every stock must pass before I allocate a dollar.
1. Trading below intrinsic value at entry.
2. Has a moat.
3. Has pricing power.
4. Has a durable competitive advantage.
5. OK to hold the shares long term if assigned.
Every. Single. Box.
Miss one. It is a no.
95% of the companies I look at fail this filter.
That's fine!
The name of the game in investing is saying no.
Not finding reasons to say yes.
When all 5 boxes hit.
I allocate.
The filter does not care about hype.
The filter does not care about your feelings.
The filter does its job.