27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
- Motif Investing constantly looks for “trends, ideas and world events that could create an investment opportunity.”
- They then picks 10 to 30 related stocks to build portfolios around, weighing them based on their exposure to the coinciding idea, event or trend.
- Among the site’s portfolios that offer moderate volatility and decent –yet market beating- returns is the Junk Foods motif.
From burgers to donuts and sugar-filled carbonated drinks, people can’t seem to get enough of junk food. As people at Motif noted, “It’s convenient, it’s cheap, it tastes great, and in times when people are working more and making less, it’s no surprise that sales of junk foods have continued to rise.”
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And this trend is not only seen in the U.S. “Abroad, millions of newly minted middle-class consumers are discovering the joys of a Big Mac or pepperoni pizza,” the site added. “Emerging markets are the next frontier for these companies, and one American company, Yum! Brands, already derives [more than] 40% of its profit from China alone.”
Buy The Stock, Not The Food
So, why not build a portfolio to profit from this unhealthy yet profitable trend? In the end, it’s better to make money from junk food than to spend money in it.
Related Link: A High-Returns E-Commerce Portfolio: Make A Fortune By Only Lifting A Finger
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The junk foods motif includes U.S.-listed stocks of companies that operate fast food restaurants and manufacture carbonated and confectionary drinks.
Performance And Allocation
The motif has managed to beat the S&P 500 over the past year, returning 7.2 percent, versus the S&P’s 0.8 percent surge. In terms of allocation, 40.7 percent of the portfolio's assets are placed in beverages companies, 37.9 percent in fast food restaurants, 19.6 in snacks and packaged foods stocks and 1.7 percent in ice cream makers.
As for individual stocks, the top companies in this portfolio in terms of allocation are:
- 22.8 percent: McDonald's Corporation (NYSE: MCD)
- 20.4 percent: The Coca-Cola Co (NYSE: KO)
- 15.0 percent: PepsiCo, Inc. (NYSE: PEP)
- 10.1 percent:Mondelez International Inc (NASDAQ: MDLZ)
- 5.4 percent: Hershey Co (NYSE: HSY)
- 4.3 percent: Yum! Brands, Inc. (NYSE: YUM)
- 3.8 percent: Monster Beverage Corporation (NASDAQ: MNST)
- 2.0 percent: Pinnacle Foods Inc (NYSE: PF)
- 1.7 percent: Unilever plc (ADR) (NYSE: UL)
- 1.5 percent: Dr Pepper Snapple Group Inc. (NYSE: DPS)
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.