Your host of the QuotersCast and licensed insurance agent Renee talks to JEFF WEBER, an expert on the AIM investing strategy.
Jeff gives the best and most thorough explanation of options I’ve ever heard.
There are reasons why most financial advisors do not and will not ever suggest their clients get into options…. it’s because they don’t understand options themselves.
However, Jeff has put his twist on a decades old options technique called AIM… Automated Investing Management.
Listen to the QuotersCast and discover this extremely powerful investment technique.
Find Jeff Weber at: https://jjjinvesting.com
Jeff gives the best and most thorough explanation of options I’ve ever heard.
Listen to the podcast at the link below…
Read The Transcript of my interview with Jeff Weber
Host Renee of the QuotersCast: So Jeff, I appreciate you being here, and I’ve got a little intro that I’d like to read because I find this, quite fascinating. So I’m speaking to Jeff Webber of JJJinvesting.com. You’ve written four books, one of which called AIM For Millions With Stock Options. A friend of mine actually just started trading options, so, I’m curious to see what you have to say here because you’re also an expert in the AIM investing.
QCHost: Well, I think a lot of people would agree with you. I think what stops a lot of people though, is that they don’t understand how to do that, so what have you figured out the rest of us haven’t?
JW: Here’s what I figured out, okay.
The enemy of all investors is emotion. So you need logic.
Well, Mr. Lichello has a method on a simple 8 by 11 piece of paper with 11 columns which shows you exactly when to buy, when to sell and how much to buy yourself, so it completely takes emotion out of it and… just a quick explanation of what I do. Let’s say you bought an option for $10, or you have to buy a contract, which is a 100 options… Well, I recommend you start with 15 contracts.
Let’s say you set up the spreadsheet and you initially buy 10 for the option.
I figure out at the bottom of the option when your next by should be and for how many more contracts and when your next sell should be, and in essence, think of Goldilocks in the middle, you don’t want a price that’s too high a price or too low, you want prices that are just right.
So if you buy it at $10, I have found from years of experience, a great place to buy is about 25% lower than your original price. If you bought a $10, I’m gonna tell you your next by is going to be maybe three or four contracts at $7.50 cents.
Then it’s the same thing with the sell, if you bought a 10, you wanna sell price is 25%, 30% higher.
So, let’s say we set up a sell price at $13, so you look at the bottom of your spreadsheet, you’d see, I have a bye for four contracts at $7.50 can hopefully, if the price goes up, I have a sell at $13, I’m making a 30% profit. If I sell at $13, well, then all you have to do every day, you check, I recommend you check at the end of the trading session when the market closes, and you see it hit one of those crisis now, to make sure you never miss it by yourself, I advise all my clients to use limit buy and sell prices.
What does that mean?
That means the stock broker has your buy and sell in their computer and they will automatically be executed if you get one of those two prices, the advantage of that is that, like I told you, you put in a sell at $7.50 with a limit buy.
Two things can happen, both of which, you’re good, you’re gonna… The buy you wanted at $7.50, you’d never contain more, but the bury of the limit by is if the stock is having a bad day and the price goes below $7.50, you might wind of buying it at $7.25 cents or $7.00, so you get it at an even lower price, right? The same with the sell.
QCHost: Yes. Can we back up just a little bit, Jeff? Because I think some people may not be fully cognizant of what AIM is.
JW AIM Investing & Options Expert: So it’s an acronym for Automatic Investment Management. And here’s the way AIM basically works. You start with, let’s say you started with $20,000 and you’re gonna buy one option or leap.
You start by taking half of your money, $10,000, and you’re going to buy the option, the other $10,000 is in a column that’s called Cash, very simply.
So you’re starting with $10,000 cash, $10,000 leaps, you always want to have money to buy, if the price goes down this way, you’ve taken care of it. The key to AIM is this, so you started with $10,000 worth of options.
JW: Simply, there is a vast prejudice against options in general, if you do a study, you’ll find only 10% of investors only even own an individual stock the rest mutual funds, etfs, whatever. And when you get to the option portion, less than 1% of all people own an option, no professional financial advisor will ever recommend buying options to a client and to give you an idea of how prejudice the industries is against this… Edward Jones, the big nation wide investment company, they refuse to sell options to anybody.
QCHost: Is that a lack of understanding? I’m sorry, I didn’t mean to interrupt you. Jeff, do you think it’s mostly a misunderstanding just because they don’t understand. That it’s a misunderstanding.
I’ll give you the perfect example. Like my other book called Here Are The Customers Yachts is based or using AIM with the Dogs of the Dow. All the Dogs of the Dow are are the 10 Dow Jones stocks out of 30 that pay the highest dividends.
Okay, that’s been a tried and true method of making money for years using the Dogs of the Dow, and guess what? All the Dogs of the Dow have leaps. So I was curious, I said, I want a contrast, how AIM would do with stocks compared to how it would do with leaps to show people why you should be doing it with options and not stocks.
Well, in eight years, the Dogs of the Dow stock portfolio using AIM, it’s up 15% in eight years, so it’s averaging maybe the 11% a year, most people would be very happy with 11% returns in over eight years.
Well, contrast that with how aim is doing with the Dogs of the Dow leaps, that portfolio in eight years is up 550%.
So would you rather be at 100% or 550% when the risk level is the same? So it’s a no-brainer to me. You wanna do options because they’re five or six times is volatile as the stock, and why wouldn’t you… I’ve had many people are starting, oh my God, I’m in my 50s, I need to do to something for retirement. This is the perfect way to catch up for all those years you didn’t have any investments out there.
QCHost: That’s an excellent point.
JW: They can explode, I had one guy in 2020, and he had to have a colonoscopy. He had terrible problems, he had colon cancer , but I won’t go into it, but he started with $550,000 in January of 2020. At the end of December of 2020, that 550000 had grown to $1,750,000.
So, he made 1.25 million in 2020.
That’s the year of covid, massive layoffs, factory shut downs and massive unemployment.
So you basically have to ignore the economy in the world around you when you’re investing, and that’s why I tell people, you always wanna be in… I’ll give you another quick example, I had one guy who got into what I call the AIM Hall of Fame, because I love to use sports analogies, and so I came up with the term the AIM hat trick. Whenever somebody has three straight sells on their leaps without being interrupted by a buy, and to do that the leap has to at least double. Well, I had one guy, he’s in the Hall of Fame. Because he pulled off the AIM hat trick in one day.
He had three sells in one day on his American Express leap in the morning.
He told me in the morning, Hey, my leap, I have to sell. So luckily, he caught me at a good moment, I immediately updated his spreadsheet, which only takes five minutes, and once you learn how to do it, it’s just repetition, never mess with Greeks or anything sophisticated. If you can do addition, subtraction, multiplication, and division…You can do AIM.
Jeff Weber AIM Investing & Options Expert Continuing…
So I updated this spreadsheet. Then he sent me an email around lunch time, I had a second sell. I said, Oh great, and I kind of forgot about it. Well, at the end of the day, when the market closed, he sent me another email and said, Hey, Jeff, I had a third sell, I did the third sell myself in one day. His American Express leap went from $3.50 to $12.50 in one day because of a quarterly earning statement.
So you see the volatility, and that’s what you’re taking advantage of. Now, when you have a bear market like we’re having now, I have sophisticated adjustments to buys to make sure you will never run out of cash.
I’ll give you a quick example.
Say you bought that option to $10… Okay, you had your first buy at $7. Okay, I refigured your spreadsheet, and the next one I would probably tell you you’re second buy is to $5 as your original price. You make that fit.
Okay, well, now the cash has maybe gone from $10,000 to $6000 well ’cause that’s where the money came from, to buy. Once you made that second buy at $5, I’m gonna invoke my bear buy strategy. What’s the difference?
Well, your third buy is gonna be half of your previous buy, so you bought at $5, your next by is gonna be at $2.50 where you load, and you’re only gonna use one third if you’re remaining cash.
So, 1/3 of $6000 is $2000.
You make that buy… Okay, let’s say that buy happens now you’re down to $4000 cash, you own a lot more contracts, you’ve greatly lowered, your break-even point is nowhere near $10 is probably near $5 or $6 right now. Okay, so if you made that buy at $2.50, I’m gonna probably invoke my Super Bear Buy strategy. What’s the difference? Okay, well, half of $2.50 is $1.25.
Well, I’m gonna tell you, don’t buy it at $1.25, we’ll lower it to one dollar.
Now you’re gonna use one third of your $4000, which is roughly $1333, so you’re gonna buy another 13 contracts, so you can see… you originally bought 15 at $10, now you’re buying 13 at $1, can you see how that greatly lower your break-even point? And the perfect example, and here’s the only way somebody can fail it AIM…
Jeff Weber AIM Investing & Options Expert Continuing…
I had a guy from New York investing his IBM. His leaps went from 20 down to 2. Okay, that can happen. But we were managing it and doing fine. So I told him you have a buy for 20 contracts at $2. He ignored me. Bad mistake. Okay, it’s dropped even further to a $1.60. I wrote him again and said, Hey, because it went down to a $1.60, you can buy 25 tracks on 20… Ignored me again.
Well, that was a big mistake on his part.
Because three months later, IBM was up to $4.50. If he had made the $1.60, he would have been profitable at $4.50 even though his original investment was a lot higher. Right? So I’ll give you another sad tale of woe about how powerful options can be. I have this guy who’s supposedly a smart man, ’cause he had a PhD in psychology and he’s a therapist, well, he was helping his girlfriend managed her money, well.
JW: They can go to my website, JJJinvesting.com, and you can get a copy of my Free first book I’ve written, like I said, four books, I give the first one away for free, other ones I sell at modest prices, you can find information on buying any of my books at my website. I love to help people, I’ll give anybody is even welcome to phone me. I’ll give you my phone number up.
It’s 2-1-0-4-7-8-0-6-5-5. <—- AIM Investing & Options Expert Jeff Weber’s Cell # – Call Him!
I would be happy to talk with you about it. I’ve got many articles I can send you, and like I was saying earlier, the beauty of AIM and using options is you can make money in both bull and bear markets. How do I know that? Because I remember one of my model portfolios went down a tremendous amount in September last September, and it was with calls…
Well, calls make you profits when the stocks go up, but there’s a way to make a profit when stocks go down, and that is by owning puts instead of calls. I back tested my model portfolio that fell, like 500%. Because in 16 years, it was up 2500% and it fell to 1900% at the end of September was still up more than 100% a year, not bad.
Jeff Weber AIM Investing & Options Expert Continuing…
And so I tested it by putting puts in, ’cause there’s a way to look up how a put or an option has done on Yahoo Finance and so what my back testing is from October of 21 to October of 22, using puts, the AIM portfolio gave 91%.
So there’s a way to do it in the bull or bear markets. And just one quick note, the last thing there, with the market was the financial meltdown in 2008 and 9. Okay, to give you an idea. The Dow Jones fell from 13000 to 6500 in 2008 and 9.
Right now, even despite the current fair market, it’s at 34000, which I view as bullish going from 6500 to 34000 in 13 years.
Plus I looked up… I was begging people to buy stocks and leaps back in 2009. To give you an idea of how prices can change, American Express was $11 a share in 2009, 10 years later it was $91 a year. Boeing was $32 in 2009, 10 years later, it was $360.
QCHost: Wow.
JW: Everything at the average stock I was recommending In Marmara 9 went up an average of 700 to 800% in the next 10 years. And based on historical experience, their markets average for 13 months, the current one is going on for 13 months, it’s due to end soon. On average, it takes 27 months of total for stock prices to return to where they were before the start of a bear market.
So we don’t have that much longer to wait it, and historically, about 55% or 60% of the time, the stock market is bullish, the other 40% of the time, and we’re either bearish or going sideways.
So long time, you always wanna be in Polish or in call, but short term, I could see you getting puts and I work with… With all my experience, I can help people decide. I’ve got people with split portfolios, they have two calls, two puts. But let me warn you on certain options, they can really go down… But miracles can happen.
Jeff Weber AIM Investing & Options Expert Continuing…
Had one guy bought JD and it went from $14 to .58 cents a book. Well, I told him, I said, It’s so low, but you had gone to owning 15 contracts, to owning 145 contracts. So I told them, I said, Our only hope is a miracle when you don’t even have enough money to roll it over to a 25, let’s just put into ridiculous sell price for all 145 and see if we get it. So he chose when it was 58 cents, he put in to sell at $3.50 for all 145 contracts.
Well, the Chinese government said some nice things about JD.
And within a week, we got that $3.50 cent price and he sold everything, made a quick $27000 profit and got back to even on that option. So it’s never hopeless with options, because they can move so quickly. I’ve had options go up a 1000% in a week, so… I tell people, that’s why you always wanna be in the game. All new options as like a mega millions ticket that never expires, you gotta hit the numbers one day.
JW: I’m happy to send you my free book, and some of my sample newsletters.
QCHost: I would love that.
JW: And anybody who becomes a client of mine gets my newsletter for free, it’s 150-page year.
QCHost: You’re very generous.
JW: Just go to that website and tell me you want the book and it’s on its way…
QCHost: Alright, JJ investing dot com. Thank you. Thank you. Alright, thank you. Yeah, have a great day.
QCHost: Send me a link when you got this posted somewhere and I’ll tell my friends so much…
JW: That’d be great. Yes, I will. Thanks again, so much for that.
END OF INTERVIEW
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