If you’re like most folks, this question is top of your mind.
In 2022, it seemed every wealth-building strategy was hemorrhaging losses.
Tech stocks tanked. The Nasdaq plunged 33%. And tech giants like Meta (formerly Facebook) dropped by twice that much.
Same thing for crypto… The crypto market plunged almost 75% peak to trough.
And speculative assets weren’t the only ones hard hit. The blue-chip S&P 500 lost 19% last year.
Even folks holding supposedly safe-haven bonds went through the wringer.
One broad measure of bond prices, Bloomberg’s U.S. Aggregate Bond Index, fell 13% – its worst performance since the index launched 50 years ago.
But as regular Daily Cut readers know, not every strategy lost money in 2022.
Trading advisories we feature in these pages handed subscribers the opportunity to score win after win.
So, if you’re looking for a way to make back last year’s losses… these strategies are a great place to start.
The Daily Cut is the big-ideas e-letter we created for all Legacy Research subscribers. It’s the publisher of Teeka Tiwari, Jeff Brown, and Nomi Prins.
We also regularly feature insights from traders Jeff Clark, Larry Benedict, and Imre Gams.
And last year, we teamed up with one of America’s most widely read income-investing experts, Brad Thomas.
These independent wealth-building experts all see how the playing field is tilted in favor of Wall Street elites. And they’ve made it their mission to level the playing field so you can really move the needle on your wealth.
But they each approach this mission in different ways.
In April 2016, Teeka became the first person in our business to recommend a portfolio of cryptocurrencies.
Jeff is focused on long-term profits in bleeding-edge technology.
And Nomi is our top-down “macro” expert. She tracks companies and sectors on the receiving end of hundreds of billions of dollars in government spending.
Then we have our traders – Jeff, Larry, and Imre. They profit from short-term market swings – in any direction.
That’s what makes reading Cut every day so valuable. It’s my job to spotlight the best strategy for whichever market we’re in.
And right now, one thing is clear…
During the bull market of 2020 and 2021, you could buy anything, and it went to the moon.
It’s what allowed our experts to regularly deliver double-, triple-, and even quadruple-digit gains in their model portfolios.
In that kind of market, you have these monster gains from buying and holding.
But bear markets are different…
In bear markets, buy-and-hold investors take it on the chin. Their portfolios plunge. All they can do is hold on to their investments and wait for better times.
But traders have three superpowers buy-and-hold investors lack…
Superpower No. 1 – Traders can profit from short-term market swings. The traders we feature in these pages often recommend their subscribers hold positions for just a day.
Superpower No. 2 – They can profit from falling as well as rising stock prices. They do this using options contracts.
Superpower No. 3 – They can profit outside the stock market. Imre, for instance, has been trading the currency markets since last July with a 92% win rate.
Any one of these superpowers can help you weather a bear market. Together, they can deliver outsized gains as stocks tumble.
He was featured Jack Schwager’s 2012 book on the world’s greatest hedge fund managers, Hedge Fund Market Wizards.
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Larry is featured in Chapter 3 of Schwager’s classic book
That’s because, from 1990 to 2010, he didn’t have a single losing year as a hedge fund manager.
That includes 2008 – the worst bear market since the Great Depression. When investors were losing their shirts, he made $95 million for himself and his clients at his hedge fund, Banyan Capital.
That may seem strange. But remember that volatile markets are a trader’s dream. The bigger the moves stocks make – up or down – the higher a trader’s potential profits.
It’s helped Larry deliver 11 wins out of the 11 options trades he recommended at his One Ticker Trader advisory in 2022.
Here’s a list of those gains…
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20% in 5 days
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6% in 12 days
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2% in 4 days
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8% in 6 days
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12% in 2 days
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1% in 19 days
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24% in 2 days
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20% in 1 day
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23% in 1 day
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17% in 6 days
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21% in 1 day
As you can see, the longest trade lasted for 19 days, The shortest trades lasted just a day.
And the average gain was 14%. That more than the roughly 11% average annual gain for the S&P 500 over the past 30 years.
And that’s during a year when the S&P 500 was down 19%… and the tech-heavy Nasdaq was down 33%.
There’s a myth that traders are all brash risk takers.
But in Larry’s case, that couldn’t be further from the truth. I’ve met him several times. He’s a very humble guy.
And his track record is a testament to his obsessive risk management.
David Horowitz is a former trader who was chief operating officer for Larry’s hedge fund, Banyan Capital. Here’s how he described it in Hedge Fund Market Wizards…
Larry is essentially a risk manager. It’s not about making a lot of money. Of course, it’s important to have a return, but for Larry it’s more important not to lose money. He knows that if he can manage the risk, he will make money. He understands when he is wrong, and he knows when he has to get out.
Fundamental managers say, “I’m going to buy this stock for the next six months because I think this will happen.” Technical managers say, “If the stock goes here, I will buy, and if it goes here, I will sell.” Larry doesn’t fit into either group.
Larry has spent so much time in front of the screens watching these markets trade versus each other that he has a sense of when to buy and sell. Larry lets the market dictate to him what he should do, which is very different from how most managers approach trading.
If you’re looking for way to make back your losses from 2022… Larry’s trading insights and recommendations should be top of your list.
You can get started by tuning in to the replay of Larry’s “Money Shock Calendar” event here.
He and host Jon Alexander take a deep dive into the volatility-based strategy that’s been responsible for so many of his wins. And it’s packed with insights about how to spot surges in market… ahead of time.
You can also follow Larry’s free daily trading e-letter, Trading With Larry Benedict, here.
Using easy-to-grasp trading plays, it’s where he helps everyday folks profit from the trading secrets that made him a multimillionaire.
And stay tuned for more from Larry tomorrow. He’ll fill you in on a volatility “shockwave” that’s about to hit the stock market.
Regards,
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Chris Lowe
Editor, The Daily Cut