Chris’ note: Today, I’m sharing a Q&A I did with Market Wizard Larry Benedict. He’s going live with a special briefing tonight at 8 p.m. ET… And he’s revealing a little-known income system he picked up during his run as a top hedge fund manager.
Larry began his 35-year trading career in the “pits” of the Chicago Board Options Exchange. And over the years, he went from consistently losing money (and getting fired repeatedly) to becoming one of America’s most prolific moneymakers.
Since 2020, he’s been sharing trading recommendations with subscribers. Now, he’s revealing something he’s never written about before. He’s launching an advisory focused on generating inflation-beating income streams with limited downside risk.
As you’ll see below, this includes a little-known income system with the potential to yield 750% more than your typical savings account. So, if you’re on the hunt for reliable income without the rollercoaster ride of stocks, you’ll want to tune in to Larry’s free event.
You can learn more about it and automatically reserve your spot right here.
Chris Lowe: Your trading record is legendary. Longtime Daily Cut readers may be sick of hearing me say this… But between 1990 and 2010, you didn’t have a single losing year. And in 2008, as the financial world was falling apart, your hedge fund made $95 million.
It earned you a place in the 2012 book Hedge Fund Market Wizards by trader and author Jack Schwager. He featured you alongside Ray Dalio, the manager of the world’s largest hedge fund, and Ed Thorp, the MIT math whizz who delivered an average 20% annual return over 30-plus years with rarely a losing month.
What struck me reading the book is how obsessive you are about managing your risk. Where did that obsession come from?
Larry: I learned that lesson the hard way. If you read the chapter about me in Hedge Fund Market Wizards, you’ll know that I did two things consistently early in my career – lose money and get fired.
Chris: Knowing your track record, that’s hard to imagine. Tell me about those early years.
Larry: In 1984, I worked as a clerk in the pit at the Chicago Board Options Exchange. It’s the largest options exchange in the U.S. Clerks answered the phones, jotted down orders, and ran them out to the pit for the traders to execute.
We used the old open outcry system. You’ve probably seen it in the movies. It involves a lot of shouting and hand signals.
Larry (right) on the floor of the CBOE
My boss was this brash trader. A clerk who worked for him was training me. This clerk told me, “Look, you’re going to get fired every day. But don’t listen to it. Come back tomorrow, and everything will be fine.”
Chris: Did your boss fire you?
Larry: Yes. On my first day. And every day after that for about eight months. I didn’t know the ins and outs of working on a trading floor. And on day one, my boss threw me right into the fire.
He was giving me hand signals for what trades I should be making from the pit. I had all the signals on a sheet. But learning them was like learning sign language. I’d look up at the scrolling tickertape, and it looked like gibberish to me.
Inevitably, I messed up an order. My boss went ballistic. He told me I was an idiot… and fired me.
But I came back the next day. And as miserable as it was to get fired every day and return with my tail between my legs, I kept coming back. I loved the energy of it. It was like playing competitive sports. And I’m extremely competitive. So, getting knocked down wasn’t an issue for me.
Chris: What was the turning point for you as a trader?
Larry: In 1989, I got a job with a trading firm called Spear, Leeds & Kellogg. That’s where I learned about the importance of sticking to a trading discipline. And after Goldman Sachs bought the company in 2000, I set up my own trading firm, Banyan Capital Management.
Eventually, I became as consistent at winning as a trader as I was at losing as a trader in my early years.
Chris: What was the secret to that transformation?
Larry: Over my career, I learned that you make a lot of trades. So, you don’t have to let one trade define you. There will always be new opportunities. I’ve often made 100 trades in a day.
Put simply, I learned to accept losses. And I learned to keep them small.
Chris: You’ve talked before about “earning your risk.” What does that mean?
Larry: It means you shouldn’t take on much risk until you’ve had a string of smaller winners. That way, you build a pile of capital you can speculate with.
If you don’t have a big enough base of capital, you shouldn’t take on any high-risk trades. You should be targeting only 5%… 10%… 25% returns… and grabbing these smaller wins when you can.
Same goes if you’re just not trading well, for whatever reason. You want to cut your risk as much as possible.
You never go broke taking a profit. That’s why I tell my subscribers they should always look to put a “P” on the page. Once they’ve built a strong foundation of capital, they’ve earned the ability to take on more risk.
Chris: You’ve shown how that kind of discipline pays off at your newest trading advisory, One Ticker Trader. It’s where you pick one stock or exchange-traded fund (“ETF”) and focus on trading that single ticker symbol.
And since you launched in August, you’ve scored 10 straight winning trades in the model portfolio for an accumulated gain of 148%.
It’s proof of something I tell Daily Cut readers all the time. Even during a bear market, they can make money… if they use the right strategy. You’ve averaged a win of roughly 13% on each of those 10 trades. And your average holding time for each trade was six days. That’s more than the S&P 500 returns in the typical year.
And you’re not stopping there. Tonight, you’re lifting the lid on a new project you’ve been working on. And this one isn’t focused on trading, but on generating income.
I know you’re keeping the details under wraps until your briefing tonight. But give me a hint at what you’ll be talking about.
Larry: The stock market has been whipsawing all year. Meanwhile, record inflation is a major headwind. At today’s rate, you’d need to make an annual return of about 8% just to stop your buying power from shrinking.
So, what do you do if you want to make inflation-beating returns without crazy risk?
You could plonk your money into a CD that pays you 1% a year. Or you could buy a 10-year Treasury bond and earn 3.5% a year.
Another option is to buy stocks that raise their dividends over time and wait years… even decades… for those yields to grow.
But in my view, these conventional income solutions don’t cut it. That’s why I want to introduce folks to my go-to system for generating income.
You see, I’ve used a little-known system to “boost” the yields in my own accounts for years. It’s not a stock, bond, or even options strategy. Instead, it takes the best parts of each of these.
Right now, it can generate up to 750% more yield than your typical savings account.
And you can get these higher yields with less risk than you’d find elsewhere because they have built-in downside protection. That’s the beauty of it.
So, tonight, at my 750% Boost event, I’ll break down how it can earn you higher yields than CDs, Treasurys, and even most dividend stocks.
And I’ll show how you can use this system to start recovering from this year’s brutal market… and beat inflation.
I’ll even share a few other little-known tactics I learned during my time on Wall Street.
Chris: Thanks, Larry. It sounds like it’s going to be an eye-opening event. Here’s that automatic sign-up link again for anyone who’s interested.
Larry: Thanks, Chris. I appreciate the coverage. And I look forward to seeing Daily Cut readers there tonight.