TRANSCRIPT
COT 40 === [00:00:00] Jeff Kikel: Good morning Cents of things. It’s Jeff and Ron here once again for another weekly update of what’s going on in the world. Both the economic world, the market world,
and always a little bit of fun with what’s going on in the world out there. Ron, how
you doing, bud? Ron Lang: Good morning, Jeff. Doing well. As I always like to say, never a dull moment.
Ron Lang: And certainly in corporate earnings season and everything else going on, there’s
always something to talk about. How meaningful it is another story. Jeff Kikel: That’s totally right. I totally agree with you. I still. Sit and listen to
the to the pundits on the news. And I just, every time I listen to them, it’s just babble
nonstop. Ron Lang: I know we got a lot of good stuff to cover today, so [00:01:00] we always got to start out with some fun.
Jeff Kikel: So you’ve got the fun part. So why don’t you kick us off and tell us a little bit about what’s going on in the world, the crazy world. Yeah, so
Ron Lang: last week, we had started with kind of on a, I don’t know, slippery slope there
on worst decisions in business history. Ron Lang: So we’ll talk about bad products, right? So this is very important that, packaging
is very important. So make sure you grab the right one before you cook anything.
Ron Lang: I don’t know if they just got lazy with her logos and marketing from the company,
or hopefully it’s two different factories making this, but just say just
Jeff Kikel: wow, that I’ve got nothing better to say about it. That’s just around my friend.
Ron Lang: So did golfers really buy these did they find. Did they find them, even if
they didn’t hit the fairway on a drive. Ron Lang: That is awesome [00:02:00] support the military and I know you were in for a
few years. Come on now That is awesome hitting these golf balls onto green
Jeff Kikel: grass I, you know what? I get the ones that are like bright yellow because I know they’re going to be in the weeds. So orange,
Ron Lang: orange, yellow, all good. But I don’t know if I Jeff Kikel: don’t even know how you’d find that on the fairway.
Jeff Kikel: My God, it’s hard enough to find the white one on the fairway. Come on. It’s a ghillie Ron Lang: suit for a golf ball. There you go. All right. Now, when you follow this fitness
routine, you will get buff, grow an Afro and possibly change skin color. So I just want
you to look at the before and after. Jeff Kikel: I am liking this Ron Lang: now. Ron Lang: This is what you want to look like. That’s fine,
Jeff Kikel: dude. I want to look like the guy on the right hand side. So if I could do that workout routine and get that buffed up, I’ll live with the Afro, but dang, man,
that’s awesome. Ron Lang: I like the sunglasses too, but I’m just saying, who was the one that merged these
things together? Jeff Kikel: That is amazing. I am. I [00:03:00] am very impressed now. This is a
Ron Lang: design flaw to blow up the unicorn, but they could have put the nozzle almost
anywhere else. I’m just saying. Wow. Okay. I’m just saying this wasn’t necessarily advertising,
but I think you might want to blow this thing up before the kids come. That’s Jeff Kikel: I’m thinking. Jeff Kikel: So this is a little weird. Yeah. There was a, there’s a local like PBS guy
that does travel stuff and he was at a a local place and I think it was down closer to Houston
or something like that. And there was. a back end of a a goat and they had a bottle opener
hooked up to the back end of the goat on the taxidermy. Jeff Kikel: So that’s the only way you could open your bottle. So
Ron Lang: my, I’m a conspiracy theorist every now and then my conspiracy theory is the husband
bought this for the wife and knew she was going to blow it up and was ready to eat with Jeff Kikel: the camera. Oh [00:04:00] yeah. Oh, I can guarantee it’s a given. Yeah. Okay.
Ron Lang: It looks like there’s something new on the McDonald’s menu.
Ron Lang: So if you got a dollar and you’re a little hungry, this may be new to that dollar
menu they’ve been trying to push. What is it? And it’s Jeff Kikel: a 10 pound bag of mice on top of that for a buck. I’m impressed. I’m telling
you, it’s a hell of a bargain. It’s a great value. I don’t know if they’re sourcing them from their stores or where are they getting it from so
Ron Lang: cheap? Ron Lang: Don’t know. All right. Almost done. Looks like Spider Man has to spin his web
on it in a different way, or is he just leading an alternative lifestyle? I’m just saying.
Jeff Kikel: Spider Man. Ron Lang: And by the way, lastly. I don’t know who’s designing these pillows or who’s
approving them, but I’m just saying maybe you want to look at design first before you
put these out on Amazon. Jeff Kikel: Yeah. Wow. [00:05:00] Wow. Ron Lang: Just say it’s almost like a, the Dunkin Donut thing that we had about six,
seven months ago, their advertisement. Ron Lang: Yep, absolutely. All right. Moving on to some serious stuff. So I misquoted.
I thought it was Warren Buffett, but it was John Maynard Keynes that I saw was giving
the credit for the quote, markets can stay irrational a lot longer than you and I can remain solvent. So a couple of things here.
Ron Lang: This is this morning. I realize it’s time sensitive after NVIDIA reported
earnings last night and this move. From the October 27th low to now, we’ve never seen
this type of move in history and all on the backdrop of bad earnings and strong employment,
even though we’ve seen a lot of retrenchment lately with white collar jobs and high paying
jobs. Ron Lang: Even though that the threat, for lack of a better word, has been [00:06:00]
called off on rate cuts. Now, the next thing they’re expecting is not May as of last week,
but now June, and you and I’ve been saying second half anyway. So it should be interesting
to see how all this impacts, but we all know how this ends and it’s tough to put new work
to money at these levels. Ron Lang: I’m not sure what you’re telling your clients at this point. It all looks good.
The wealth effect is in place, but what are your thoughts? Jeff Kikel: Yeah. We’re, I think I made a big shift last year to add credit positions
or credit stuff into the portfolios. I just got tired of playing with the bond markets.
Jeff Kikel: We’re still riding the stock market. But I will tell you, I am extraordinarily
just very cautious right now on the stock market. You saw, it’s just amazing to me what
a difference a day makes. Where, yesterday and the [00:07:00] day before the world was
horrible and the world was ending and, the Fed news came out and they’re not going to,
change the interest rates in May and, it’s like only a 35 percent chance now. Jeff Kikel: That’s the 35 percent of morons that still think it’s going to go, they’re
going to lower the rates. And. Now all of a sudden, no, NVIDIA is great. So boom, the
market’s right back up again. I think it’s just, it’s going to be very difficult to make money for a bit.
Jeff Kikel: I could very easily see this thing going sideways from now until even the election.
And you’ve got the craziest, goofiest election that has ever existed. In our history that’s
going to be going on and it hasn’t really even fired up. I think pretty much after May
5th, Super Tuesday. Jeff Kikel: You’re going to have a pretty clear picture of, who’s going to be the Republican
nominee. We know that who the democratic nominee is because the Democrats wouldn’t allow anybody
else [00:08:00] to run. It’s a given that it’s going to be the two 80 year olds fighting it out. At this point, and, I don’t 1, there, I don’t know which one’s more disliked at
this point. Jeff Kikel: And so I just think you got to, either is going to be a lot of people that phone it in for the election at the end of the year, or it’s just going to get crazy.
But I think it’s going to I could easily see this thing just going sideways for quite a
while. I Ron Lang: mean, I don’t know how we can’t get at least a 5 to a 10 percent pullback,
not 15 as just the normal course of correction. Ron Lang: Of course, people will think the earth is going to be Armageddon and the next
week or 2, if that happens, but, a 10 to 15 percent pullback would be healthy. Yeah, the
next thing is, we showed this towards the end of last year because we’re trying to look for what are possible.
Ron Lang: Yeah. Sectors to look into and you always look at the bottom four. Yep. Of the
prior year to see where they’re going to be. And obviously healthcare had a nice bump, [00:09:00] but obviously, these numbers are, are not going to be sustainable. I think these
will get pushed around quite a bit here in the next 3 to 6 months, but, the idea is those are probably still the sectors you want to be in throughout the end of this year.
Ron Lang: It’s just really a matter of allocation based on, where you are in your timeline.
Jeff Kikel: And it’s, yeah, I. Think right now it is the text to the text and anything
related to AI, both for good and bad we saw earlier this week, there was this anticipation
that, NVIDIA was going to have horrible earnings, which, you know, if you know anything about
NVIDIA. Jeff Kikel: They’re not going to have horrible earnings. They are always wildly underestimating
what their next quarter is. They give guidance, but it’s usually pretty safe guidance for
them. And then they come out and blow it out. But you saw literally everything related to,
NVIDIA and the AI world just get [00:10:00] pummeled on Tuesday of this week. Jeff Kikel: So it was, we didn’t have a Monday because of the market holiday. So it just
got humbled on Tuesday morning. And then, of course, Thursday, the world is wonderful.
Everything’s great. And, we’re right back to the races at this point. Cause if Diddy has done so well. Ron Lang: Yeah.
Ron Lang: And it’s one stock pulling everybody behind them or putting them on your back,
whatever analogy you want to use. Jeff Kikel: Cause even the magnificent seven at this point, aren’t really. Pulling their
weight. You look at about half of them are just going sideways at this point. Jeff Kikel: And you’ve got NVIDIA and a couple of others that are just off to the races.
And, it’s likely to be that way have all pulled Ron Lang: back. Tesla has been cut in half. But we’ll see we’ll see here.
Jeff Kikel: Let me share some of the stuff that I’m seeing out there. So let’s take a
look at leading economic indicators. Jeff Kikel: This is something that, that Ron and I follow. This is something that I was
taught by a mentor a long [00:11:00] time ago to keep a good eye on. And, what I would tell you is. We have been continually for most of last year and early on to this year.
We’ve still remained with the the year over year change down below, down in the negative,
and it actually accelerated this month. Jeff Kikel: From where the estimates had been the estimates were a little bit more muted.
It actually came in worse than what the estimates were, but it is starting to crank up a little bit. And when you look at real GDP with the last CPI report and some of the other things
have started to pop up. Interestingly enough one of the senior managers with The conference
board who is who puts it together. Jeff Kikel: I caught this little note as they were explaining out this the U. S. L. E. I.
fell further in January as weekly hours worked in manufacturing continued to decline and
the yield spread remain [00:12:00] negative while the declining L. E. I. continues to single headwinds for the economic activity for the 1st time in the past 2 years, 6 out
of its 10 components. Jeff Kikel: Were positive contributors over the past six months. As a result, the leading
index currently does not signal a recession ahead while no longer forecasting a recession
in 2024. We do expect real GDP to slow down for Q2 and Q3. I look at that as maybe they’re
hedging their bets a little bit because they’ve been wrong for almost 18 months now. Jeff Kikel: But, I’ve also, we’ve talked about this with economists before they are wrong
way more than they’re right. And, it could go the opposite direction. Ron Lang: Look, any market strategist, economist, that’s worth their salt that I respect that
I have followed. We’ll all tell you 1 thing. Ron Lang: You can have declining and trending down economic numbers for months quarters
or [00:13:00] possibly years But unless there’s a specific Catalyst. Yep, right typically
banking or financial or a geopolitical event. Those are the two major ones That with that
will pull these economic indicators down into a recession level And we don’t need a significant
pullback in the market To have a recession or however, you want to say we don’t need a recession To happen with a significant pullback in the market because we all know, Economics
is not the market is not, the economy idea is and I thought it was interesting on who
said this Because the ceo she’s been out there on a lot of the major networks and done some
other interviews She’s not the one that came out with this statement And we all know that
the lei and other indicators, they may say within this time frame Their time frames are
average. Ron Lang: Yeah, it happened earlier can happen later. It happened later. Yeah, so the fact
that in February already, they’re [00:14:00] saying not in 2024. Hey, you still got 10
and a half months to go. There’s still a lot of room here. I think this is, I think this may be bolder than we may have a recession.
Jeff Kikel: Yeah I honestly think it’s way bolder, but. Jeff Kikel: We have not had a recession. We really, truly haven’t had a recession since
2010, 2013. Yeah, 2012 or something like that, 2020 wasn’t, I don’t consider, three months
of recession. But, the reality of it is we really haven’t had anything since 2008 period
at 2008 to 2010 period. Jeff Kikel: So we’re due and it’s going to happen at some point. And I don’t know what
that factor is going to be. That’s going to finally throw us there. I personally think
that the consumer is getting stretched beyond stretched at this point. And what’s the breaking
point? Yeah. Where is that going to break? Jeff Kikel: Where are people going to run out of money? It was. Yeah. It was always Ron Lang: say you can’t borrow anymore because [00:15:00] you could barely make the minimum
payment. And now they’re going to be, crap out of luck for the next 10 to 20 years paying
all that off. Jeff Kikel: Yeah. And that’s the thing is they’re going to be stuck in there. Jeff Kikel: And you’ve got people paying or not paying on their student loans because
they still think the government’s coming to the rescue and just going to wipe out their start and, student loans. I think it’s so funny. The one thing that’s not been proposed.
Out of this entire thing. Jeff Kikel: Is just saying, okay, for all the small businesses out there that the government
forced small businesses to close and then offered up the the idle loans the economic,
loans, the payroll it wasn’t even the payroll stuff. It was the economic stuff, which was
not forgivable if they would just come in and say, you know what, we’re just going to up to the 150, 000 dollar 1st level of that.
Jeff Kikel: We’re just going to wipe that out that if you want to, if you want to ensure that the world’s going to [00:16:00] continue, from a employment standpoint, that’s one thing
the government could do quickly. And it’s something that wouldn’t get challenged by the Supreme court or anything like that because it’s not, it’s not.
Jeff Kikel: Adversely affecting anything all you’re doing is helping out the small businesses,
but for some reason, the government do it. We’ve talked about Nvidia, but the big earnings wins for this week. Nothing else mattered besides Nvidia. That’s what’s affected everything.
Jeff Kikel: I think we were somewhat of an unhealthy market last year. It’s getting continually
more unhealthy. I do monitor a lot of the. Just earnings reports and things like that.
And we had a real swath over the last couple of weeks of a lot of positive earning surprises.
As we’ve discussed before, I think some of this is a lot of these companies pulling back
their estimates a little bit so that they can have surprises. Jeff Kikel: I will say this week, it’s a lot of smaller companies and a lot of [00:17:00]
surprises to the downside. Most. Interestingly enough are in the energy space really a rough
time period, especially in natural gas. Anybody that’s in that the government came in and
said no new permits for any pipelines or facilities or anything like that manipulation of price.
Jeff Kikel: Yeah, so it’s, it’s causing some of these companies to, all right we’re up a creek. I heard on the news the other morning, there was a company that is building pipeline
and stuff like that. And, the owner of the company was like, I just, I don’t even know what to do at this point because I’ve got 3000 people that work for me.
Jeff Kikel: And I don’t know if they’re going to continue to be employed at this point. Yeah. Most of them are furloughed. So it’s interesting because we hear about these high
paying jobs. In the you know out there Where are you going to find them? These are high
paying jobs for people and you’re basically just killing their jobs off.
Jeff Kikel: Yeah, okay cool. What’s [00:18:00] your thoughts? I mean what we’re coming up to the end of earning season. Do you see anything else? Any major players out
Ron Lang: there just two quick observations. i’m not going to bring back up my slide But when we were going through the sectors The worst year to date first, worst sector last
year and already worst sector year to date this year’s energy Which I was just talking
to another advisor friend of mine who i’ve known over 30 years and i’m saying How with
everything that’s going on in the middle east and the world? Ron Lang: How is oil not at least over 90 if not 100? Yeah, i’ve been saying for a long
time to ad nauseum, oil precious metals specifically gold bitcoin these are the three most manipulated
markets in the world because of supply and demand you can’t tangibly understand or touch it So why do we have a glut all of a sudden of oil?
Ron Lang: The saudis have been pulling back On their production. Yep You know real quick
and [00:19:00] the other observation was nvidia Everybody’s been lowering expectations so they could jump over it and video raised their expectations prior For a blowout quarter and
they surpassed that. Yeah, that’s amazing. Jeff Kikel: Yeah. No, it’s an amazing company It’s well run And it’s a, yeah, it’s one of
those companies that if you look at the history of it and say, oh, okay, it’s this amazing
thing today. Jeff Kikel: But if you look at the history of it all, the way back to, I think 2001, 2002 is when they came into business and they were literally sitting below $10 a share.
For almost 20 years and it’s just literally been the last four or five. Really the last
three years mainly because they have wonderful chips for The the ai industry and ai
Ron Lang: gaming. Ron Lang: Yeah, they’re in there I thought it was interesting very quickly as a quick left turn right turn. There’s been some financial media and some people that I follow with [00:20:00]
their podcast That show a chart mirroring Cisco from the mid to late nineties and NVIDIA
as of today, and it’s almost in lockstep until 98 99 right now. Ron Lang: Very interesting. At one time, Cisco was the most the, the company that had the
greatest market cap in the world in 99, 2000. And we all know what happened from there.
Jeff Kikel: Yeah. It’s amazing. Like I said, it’s they’ve got some competition coming in.
AMD has got, AMD, which has always been the, they also ran, they’re, they’ve actually got
some good equipment Ron Lang: and AMD Intel, a super microchip, there, there’s a Marvell, there’s a lot of
them out there that That will they’ll definitely start taking a chunk out of it. Ron Lang: But right now 30 percent of nvidia nvidia’s revenue is from four companies. Yeah,
and they’re four of the top seven stocks in the sp amazon microsoft google and whoever
the fourth one is tesla Maybe i’m not even sure i doubt it and i’d already [00:21:00] said amazon, but it’s four for those four companies make up 30 Yeah,
Jeff Kikel: well, or you get to a point where you do like an apple that goes, you know what?
Jeff Kikel: We’re just going to start creating our own chips and making our own chips. And all of a sudden, whack, you, you take a third or more of your interest or money away at
that point, Ron Lang: my conspiracy theory, why those 4 companies make up 30 percent of the revenue,
you’ll love this one, but it makes some sense. Ron Lang: I think it’s because they’re buying up as much as they can. So some of their smaller
competitors can’t get the inventory. Jeff Kikel: Yeah. Which is the cash. Yeah. But
Ron Lang: I’ll double my order. So you can’t get it. Jeff Kikel: I honestly, that’s not a surprise. It wouldn’t surprise me if they did that.
They’re sitting on tons of cash. Jeff Kikel: Why not? Ron Lang: Business 101, slow down your competitor by buying
Jeff Kikel: inventory. By buying out the [00:22:00] supply of it. Let’s let’s switch gears a little bit. We’ve started this little education piece of the show. So I wanted to throw my two cents
in today. And we’re going to talk a little bit about a strategy that can improve returns.
Jeff Kikel: Can reduce risk a little bit overall. And it’s a strategy. I use with clients I
use personally and I know you do as well. Ron is the buying of a covered call. So what
we’ll do is we’ll talk a little bit about let’s just say X, Y, star X, Y, Z stock at
50 and I’m going to buy 100 shares of 5, 000.
Jeff Kikel: And I think, the stock’s going to go up to 60 by the end of the year. So
not a huge move, but it’s a decent move during the year. Once again, you do the math on that’s,
up 10 per share on a hundred shares, that’s a thousand dollar profit. Or 20 percent of
my [00:23:00] original 5, 000. Jeff Kikel: Not a bad return, actually pretty nice little easy return to have. I would,
I’d bank that one every year, but what if I added covered calls to my strategy? So what
is a covered call? Basically a covered call is an option. So you have calls. Which are
typically a bullish strategy. Meaning I, if I buy a call, I’m buying the right to purchase
a stock at a specific price. Jeff Kikel: So you have what’s called the strike price and you have the, basically the
premium amount that you’re going to pay for that strike price. So let’s say I was, I didn’t
want to buy the a hundred shares of stock and I just decided I wanted to buy. A one
option, which represents a hundred shares. Jeff Kikel: I might be able to buy that option depending on how long it is. I might be able
to buy that out for a year and only pay, 10 [00:24:00] or, probably less than that 10.
So that would be a thousand dollars instead of paying 5, 000. But if I decided I wanted
to own the stock, or if I already owned the stock. Jeff Kikel: I could go out there and sell covered calls. So it’s the exact opposite
of buying. I’m selling them because I want the premium. And the goal for me is I want
that kind of to stay below whatever my strike price is. So let’s say, we’re sitting here
and we’re saying, okay, I have, I own the stock at 50. Jeff Kikel: I’m going to sell a covered call at 55. Maybe the stock’s kind of floating
around 50 at that point. I want to buy it, or I want to sell it at 55. So I’m selling
somebody else the right to buy that from me at that price or to, me to deliver it to them
at that price. So let’s take a look at this. Jeff Kikel: So I buy a hundred chairs, I’ve got 5, 000. And then if I decided to sell
[00:25:00] weekly covered calls, and I’m a big fan of weeklies because, Hey, it’s every
week, every Friday they go from Friday to Friday. And the interesting thing is when
I started using this strategy, I was using monthly cover calls. So that would mean that,
I might sell one the first Friday of the month. Jeff Kikel: And then I would wait, four weeks and then that would mature or it would, it
would basically expire worthless or I had to do something with it at the end of that month. If you look at weeklies, there’s. One thing is there’s four of them and they typically
have higher premiums. So it’s a way that I can get four of those premiums versus just
one. Jeff Kikel: And it typically would be about double the amount of premium during a month.
Okay. So if I were to do this, let me say, I’m going to, let’s say that stocks just fluttering
in that 50 to 55 range, it’s really not going anywhere. I figure it’ll creep [00:26:00]
up there throughout the months going forward, let’s say I were to sell those 55 calls every
week and I make 30 bucks, which, people look at that and go, Oh, it’s only 30 bucks. Jeff Kikel: Why would I not, or why would I want that? That can be. 1, 560. If it, if
none of these things worked against me, it’s 1, 560 over 52 weeks. So now if I had my original
thousand dollar profit, so let’s say I, it gets to the 60, I have been selling covered
calls all the way up. I got my 30 every week. It worked perfectly. Jeff Kikel: I have an extra 1, 560 now without dividends, without anything else. I have a
51 percent return for that year with this is only on 100 shares. This is only on a hundred
shares. If I have more than a hundred shares. That just double, that, that number gets bigger and bigger, but it still works out to be 51 percent return,
Ron Lang: right? Ron Lang: And not including any [00:27:00] capital appreciation on the stock at the goes up. Jeff Kikel: Exactly. And I don’t even have that. I, we had that extra thousand figuring
that it would go to 60. What happens Ron Lang: is just the call, right? Income. That’s what Jeff Kikel: people need to understand. And it’s just income that’s consistent week in
week out. Jeff Kikel: So what are the risks? There’s three main things that you need to understand.
There is. A break even point. That’s that point. If the stock starts to move above where
the strike price is where that original strike price is for me, if it moves above that, which
means it’s probably you’re, they’re probably going to take my stock away from me at that point.
Jeff Kikel: There’s a break even point. And that is the price where I, the strike price of the options. So let’s say it’s a 55 plus whatever premium I received when my example,
it’d be an extra. 3. So now it’s 58. That’s my break even point beyond that. I’m losing
money. Max gain. It’s just the premium I received because the [00:28:00] max I can make on this
is 30. Jeff Kikel: It’s 3 per, option, basically. And then my loss point. Theoretically, the
stock could drop to zero. It’s probably unlikely for it to go from 50 to zero in a week, but
it could happen and I could lose 50. My entire investment plus I’ll only get the premium
out of it. So I ended up with, 30 bucks if it went to zero during that time period.
Jeff Kikel: Chart wise, this kind of just shows you from a chart standpoint, what that looks like. So there’s that breakeven point here, down to about 48, the max gains only
going to be up there, at that 30 extra, the 3 extra point, and then the max loss. is pretty
much unlimited. It could go to zero, but it’s a very simple strategy. Jeff Kikel: It’s a, it’s probably the most basic strategy. It requires a level one options
at most brokerage firms. And it’s a pretty [00:29:00] simple and easy strategy for most people to get. They don’t really have to understand a lot of the mechanics of options to be able
to do this. What’s your thoughts, Ron? No, Ron Lang: We just gave a presentation yesterday and explain this to a prospective client and
many of our clients, especially the pre retirees and the retirees. Ron Lang: This is almost a de facto standard for generating income for stability portion
of the portfolio to not only generate income, but typically on lower volatility positions
and the 3rd thing. Edging, you think your stock has run up quite a bit. Let’s say it’s
run up to 50 and you’re like, my God, this thing’s doubled in the last year. Ron Lang: You may write a 55 call thinking, Hey, the fundamentals are out of whack here.
I don’t think it’s going to go above that ceiling. Why not tap? Some of your profits
get that additional premium because even if you get taken out at [00:30:00] 55. 01 You kept the premium you kept the dividend. You got an extra five dollars in profit hey, how
did we what did we say? Ron Lang: Bulls and bears make money pigs get slaughtered. Yep. So a lot of times it’s
great for hedging, too Jeff Kikel: Yeah. And it doesn’t mean that you have to hedge an entire position in that
case. You could just hedge a portion of a Ron Lang: position. You got a thousand shares, right? Five Jeff Kikel: calls. Yep. And I’ve done that before with a client where, they had a very
large position of company stock. Jeff Kikel: And what we did is we just figured out, we were running calls that were over,
several different strike prices. Knowing that, okay, it might take out one, it’s probably not going to take out the other four or five strike prices that we’re after. And it was
just a nice little continual income stream coming in. Jeff Kikel: And it was a disciplined approach to exiting from those stocks.
Ron Lang: Yep. Definitely. And I would say, if you’re not working with us, you’re working with another advisor. If they’re not offering [00:31:00] this, they’re not earning the money
that they’re charging you in fees. No, period. I can’t believe how many people come in with
the size of portfolios that they want us to manage, and they’ve been around for a long time, work with a couple people, and they’re like did you ever do any call rights?
Ron Lang: I’ve heard of them, but no, my advisor, their firm, whatever, they don’t allow it.
Yeah, I don’t get it. I don’t understand it. It’s another it’s just another way to protect
and hedge yourself and why people aren’t doing it. Jeff Kikel: I don’t know. I don’t know. I think a lot of advisors, quite frankly, don’t
understand it and they don’t want to spend the time to learn at that point. Jeff Kikel: I agree. That’s the only explanation I have for it is there’s just a lot of advisors
that won’t put out the effort to do it. And, if you’re running weeklies, that means you got to do some work every week. You can’t just you can’t go play golf on Fridays. You
got to actually do a little bit of work on Fridays. Ron Lang: And oh, by the way, it’s tough to get the [00:32:00] concept sometimes the 1st
time. Yeah. My last thought to people that are watching this, If you’re not doing these, you’re not familiar, rewind this and go back. I presented a little bit similar, but a little
bit differently, but it’s the same concept and it’s very simple. Ron Lang: There are a lot of very complex option strategies. This is probably one of
the more simple ones. And oh, by the way, one of the more safer ones and less risk.
Jeff Kikel: Yeah, period. Yeah, just because it has option doesn’t mean it’s risky. At
that point, it’s a very simple strategy that Ron Lang: there are other there are a lot of other ways to do options that are risky
This is one of the lowest risks that you have and you’re making money day one as soon as you write that
Jeff Kikel: call Absolutely. Jeff Kikel: Yeah, yeah, and you know what your risks are and you know what your gains
are It’s very predictable and very straightforward So hopefully this was something that y’all
could learn I would encourage you if you’re running your own money You know take some time to [00:33:00] learn this If not, find an advisor that can help you with this and
can help build a portfolio for you with this. Jeff Kikel: Thanks for joining us. We always appreciate this. We’d love your comments.
Give us an upvote. If you like this let us know what you want to hear. Let us know if
there’s any strategies that you want to hear because we’re going to continue to do that this year. So thanks a lot. And we will see you guys back here the very next time.