- Introduction to Jeff Weber
- What is AIM investing?
- What bear markets are
- Dogs of the Dow
- Importance of LEAPs
- Stocks Vs LEAPs
- Benefits of the AIM method
- jeff@jjjinvesting.com
- https://jjjinvesting.com
- Contact Number: 843-619-3005
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
- Email @: corwyn@corwynmelette.com
Episode 81: Ready, AIM, Fire! Maximize Investment Profits with Minimum Risk with Jeff Weber
CORWYN:
Good morning, good morning, and good morning guys, welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I’m Corwyn J. Melette, broker and owner of Exit Realty Low Country group in beautiful North Charleston, South Carolina. Guys, if this is your first time listening to this show you sir or ma’am are in for a treat. Because our mission here is very simple. That is to empower our listeners, and our community through financial literacy, and real estate education guys, we’re legacy building, that is what we do. So, guys, I’m super excited today to have with us none other than Jeff Weber with JJJ Investing. I’m sorry, he’s going to be sharing with us a plethora of information. So guys, please make sure you get your pen, and your paper and make sure you’re ready to take notes because he’s going to drop some jewels or some nuggets on you today. So Jeff, how are you doing today?
JEFF:
I’m doing great. Thank you. Thank you for having me on.
CORWYN:
You’re welcome. You’re welcome. So Jeff, if you don’t mind, tell our listeners a little bit about you, who you are, and what you do.
JEFF:
Okay, I am Jeff Weber, I’m a retired auditor for the US Army who worked all over the world. I’ve always been interested in investing. And I discovered a great way to invest many years ago in the 1970s, called AIM, which stands for Automatic Investment Management. It’s a contrary investing method, which is perfect for today’s world. And all that means is you’re always going to buy low and sell high. And what I liked about the strategy was that it always told you when to buy, when to sell, exit strategies, and get a plug-in for your show. And how much to buy or sell. So it has all the essentials of a good investing method. And I tested it to see if it would work. Well. It works brilliantly. It has averaged 100% a year for the last 16 years. And it’s very simple. You can do it all on one eight-and-a-half by 11 pieces of paper with 13 columns. I’ve written several books on it, and I give away my first book. So if anybody would ask their pencil out, you can get my first free book and some sample newsletters at jjjinvesting.com. I originally was just looking for a way to invest for myself. But this method was so good. I wanted to offer it to everybody. And what I love to teach you is the secret of this method of investing you are not going to be buying stocks like Apple, Microsoft, and Bank of America, what you’re going to be buying is the long-term options on those stocks.
CORWYN:
Alright, so that’s the interesting concept. So to make sure our listeners got that we’re gonna say you’re going to focus on the options, is what you were saying?
JEFF:
Yes, because, and the simple reason is this. options cost about 25% on average, the cost of the stock, and they are five or six times more volatile. So in essence, here’s the way I do it with AIM, okay? You start with an equal amount of cash and LEAPS or LEAPS is the term for an option that expires on the third Friday in January and has more than a year before it expires. So let’s say you started with 10,000 you would start with 5000 worth of bleeps, contracts, and 5000 cash, let’s say you bought $10 an option, for example, you want to start with a minimum of 15 contracts, you have to buy contracts, you can’t just buy options. Each contract represents 100 options. Okay, so you own your 15, and you’re going to set up the spreadsheet, which is explained in my book. And then you go down to the bottom of the spreadsheet and figure out what your next buy and sell are going to be. And here’s the simple thing. So if you started with $10, I have found from years of experience, that a good point of selecting a buy and a sell is roughly 25 to 30% lower for your next five. 25 to 30% higher for your next sale. So if you own 15, I’m going to set up a buy for you for normally around two or three contracts. And if you started at $10, I’m going to tell you, your first buy would be at $7. Same with the sell, I’m going to say you started at $10, you’re going to put in a sell for, say $13 30% higher. And you always want to use what is called a limit, buy and sell, which means the broker keeps your order on file, and you can never miss the buy or sell. And if you put in a buy at seven, you might get lucky and get the buy cheaper because limit buys can sell at a cheaper price, but they’ll never sell for more than seven. So I found from experience about 10% of my traders get a lower buy price or a higher sell price than they originally had placed with the broker. And once you do that, you’re done for the day. And then what I do every day if I’m managing your account, I look up the leaks at the close of every day. And I find out if you had a buy or sell, I encourage my investors to, you know do it themselves. But I’m here to nag them if they forgot and didn’t do it because the only way you can fail with AIM investing is to not do the buys and sells. And auctions are so volatile. If you miss the buy, it might go away the next day if the market goes way back up. So the essence of doing AIM correctly, is I tell you if you had to buy or sell, if you didn’t tell me, I update your spreadsheet that day, and at the end of the trading day, I send you an updated spreadsheet. And that evening, before the market opens for the next day, you place the new buy and sell because every time you have a buy or sell, both of them change the easy rule of thumb to remember is, if you had a buy, your next buys got to be lower, and your next sell is going to be lower because you reduced your breakeven point by buying more cheaply. I mean, think about it if you bought 10 contracts at $10. And bought 10 contracts at $5. Your breakeven point is now $7.50. So you can make money and profits without the LEAP ever going back to its original price. And I have several other more exotic strategies that are good for this bear market. And your important point I don’t want to forget is that I have a way with AIM to play bear markets because one of the beauties of options is they have both calls and puts. Calls go up when the stock goes up but puts go up when the stock goes down. So I back-tested in 2022 using puts on one of my popular model portfolios in my newsletter and I found puts went up 91% in 2022 during the bear market, so I have a way to switch between calls and puts. So you’re always doing what the market is giving you at the current time. I prefer calls long-term because the history of the stock market has always gone up long-term, but in short periods, it can be a severe bear market. And you need to take that into account for the investing. Because the calls while you know AIM is good, can buck the market, if everything’s going down strongly. All AIM can do is have you keep buying at lower and lower prices, waiting for the next bull market to return. And we don’t know when that is. And since it’s very easy to switch between calls and puts You take advantage of what they’re giving you now. And you know, in that way, you will minimize any losses in the short term and get them in the long term. And just to give the readers a quick idea of the history of the stock market, if you go back to the last bear market, the financial meltdown in 2008 and nine the Dow Jones went from 13,000 to 6,500. Okay, that’s a 50% drop. Okay, well, that was roughly 2009 when that bear market ended. Fast forward 14 years. And you can say the last 14 years overall have been bullish because the Dow Jones has gone from 6,500 to 32,000. So, I mean, if you take a long-term view, then it’s going to be a plus. As I said, I’ve been doing this for a long time. I dug up my old March 2009 newsletter when I was begging people to buy stocks because I wasn’t really into LEAPS in 2009. Okay, well, of course, nobody listened to me, you know, to their detriment. And I decided to check and see how the stock prices from my March ‘09 newsletter do 10 years later. Or 10 years after a great rock and roll group. So I looked them up, and consistently they made tremendous gains to give you an idea: American Express stock was $11 a share on March ‘09. 10 years later, it was $91. Boeing was $32 a share in March ‘09. 10 years later, it was $360, the stock not the LEAP, the stock. Bank of America was $5.50, 10 years later, it was $36. So you know what can I say? I honestly think you know, that I’m a big fan of investing history. If you check the history of the stock market, you will find the average bear market last 13 months. Okay. And then the average recovery back to where the prices were before the start of that bear market is 27 months. And we’ve had about 14 months of this bear market. So it is on the downside and we are going to see a return I think to the bull market. And that was and when that happens I’m going to switch back now there are certain stocks that seem immune to the bear market now give me an example and why I like leaps suppose as opposed to stocks. One of the books that I wrote is called Here are the customers yachts. And it describes using AIM with the dogs of the Dow stocks and leaps. Okay, all the dogs of the Dow are the 10 Dow Jones stocks that pay the highest dividends out of the 30. Okay. Well, I had one guy who literally applied my book to his portfolio, and he started with 150,000 buying 15,000 of every one of the 10 dogs of the Dow Leaps, okay, and he started at the beginning of 2022. Well, to the year, despite the horrible bear market, he was up 21%, using the dogs of the Dow leaps. And the beauty of AIM and why you really start making higher profits over the long term is that this is a lifetime investing method you can always use. And once you learn it, you can pass it on to your kids and grandkids. And they can use it because it will always work. So the beauty of what he did is this, okay, he started with 150,000. A year later, he has 183,000 After the profits. So now he’s rolling over 183,000 into the next year’s leaps because the secret was optioning is this using AIM? Right now let’s say you started, you’d be buying 2025 leaps. Okay, well guess what? The 2026 Leaps come out in September. So what I’d had my people do is, you’re going to own your leap for about a year, and then you’re going to roll it over to next year’s leap that makes them perpetual. Your net, you can own Apple LEAPs for the rest of your life, rolling them over every year. And why would you want to do that? In 16 years, Apple LEAPs in my model portfolio are up 19,000%. That’s pretty amazing. So the beauty of this is it’s simple, it’s arithmetic, you don’t have to use any Greeks, you don’t have to use, the only technical analysis I need to do is I need to know the price of the LEAP. So I can decide if you had a buy or sell. So it’s very, very simple. It’s very safe because you’re only putting half of your money into the leaps. The other half is going to be in cash. And the nice thing is there are only about 500 stocks that have leaps. And they’re all the cream of the crop stocks. And there are roughly 6500 stocks that trade. So right off the bat, you’re selecting a LEAP from one of the best 500 stocks out there. Only the good ones have them, you know so, and by far, I’ve had many people with Apple starting with 50,000 and 3 years later, they have 350,000 in a bull market. And that’s with half in cash and half in stock. And the beauty of LEAP is this, you would start with 5000 cash and 5000 worth of options. Come back five years later, you’ll find your 5000 worth of options is probably worth 25,000. And your cash is also gone from 5000 to 25,000. Because every time you sell, you’ve put that money back into the broker’s– your money market cash account. So if you have a sell for– you started with 5000 cash and you had to sell for 2000. Now you have 7000 in cash. And that cash is there to make buys when the price goes down. So again, go ahead.
CORWYN:
Now Jeff, you manage with this strategy to live a great life and a simpler life. If you don’t mind, tell our listeners you know what, this tactic, this trick? Well, this tactic, it’s not a trick. But what this strategy has allowed you to do, you travel, spend time with family, and make a very good income. But, why should people follow this method?
JEFF:
The main reason is it makes much higher profits much more quickly. And what I’ve found from years of experience, I get a lot of emails and phone calls from people saying, Jeff, I’m in my early 60s. I didn’t save anything for retirement. I really need to catch up in five or 10 years. Can you help me? So basically, you know, I used to kid people, I’d say, most of my investors, they might have, 10,000, 50,000 or 100,000? Well, guess what, if you had 50,000, to invest, putting it in a CD at 1%, ain’t gonna cut it, you know, you’re not gonna have a retirement on that. So automatically, you have to look for a way to invest that has a much higher profit potential. AIM has that. And it’s proven through the years that it works. And again, you can switch between calls and puts, depending on what the markets doing. Because all it is is, you know, it’s the essence of the cliche, buys low, sells high. I mean, think about it. How can you ever have a profit if you don’t sell something at a higher price than you bought it? If it’s a house, a car, a stock, or a leap? You have to do that in order to do it. And the beauty of why AIM works is what I call LIFO. The accounting term” Last In, First out”, so I’ll give you a good example. Some examples are that happen all the time. I might have somebody who bought a LEAP that $10, okay, maybe a month or two later, they bought five more at $4. Okay, well, I’ve had instances where two weeks after they bought it at $4. It’s now selling at $8. And they wind up selling those that they originally bought in 10, for $8. And now they’ve made a $400 times five profit of $2,000 on that trade because they were selling ones, the LIFO ones, they bought it for 4$, and they’re selling them two weeks later at $8. I’ve had that happen over and over and over. That’s how you make big profits. And LEAPs. As I said, they’re very volatile. And why would you want LEAPs? Okay, in my monthly newsletter, anybody who sends my free book to jjjinvesting.com, will get three free issues of my newsletter. And I encourage you strongly to look at the results and profits made from the model portfolios. And you will see that I have a portfolio of one model portfolio are dogs of the Dow stocks and one is dogs of the Dow leaps. They’re both profitable. But over the last nine years, the dogs of the Dow stocks are only up 103%, I think most people would be happy with a 10% a year return, you know, on their investment. But if you had made the same investment in dogs of the Dow long-term options or leaps, you would be up 550%. So you see the comparison of how you make much higher profits with the LEAPs than you do with the stock. And to me, the risk level is the same. You know, if you are a LEAP on a dog of the Dow stock, it’s as safe as the stock that it represents. And those are some of the safest stocks in the world. And so I tell people, I say, you know, why would you want to do it with stocks, and I look at the stock spreadsheets, and I hardly see a trade, because you need, you want them to go up, you know, 20, 25, 30% to get buys and sells, it’s very hard to get a stock to do that. They just don’t, they’re much more conservative in going up and going down. So you just don’t get any action with them. So I had several people tell me I love the AIM investing method, but I never got any buys or sells with stocks. And I said right. So that’s why I have switched and taught people how to do it with long-term options that are just as safe as the stock. The options are good for almost, when they first come out. They’re good for over two years before they expire. You know because overall options themselves have gotten a bad reputation. Because all literally think about this. No big time. You’re gonna see a financial advisor at some big company. Do you think they’re gonna recommend you buy any options? Nope. In fact, ever, Jones won’t even let their people sell options, even covered calls, which I find ridiculous. Okay. But I tell people, I say, if you’re trying to catch up and have enough money to live a good life in this highly inflationary world, you better be making high returns. And only drawback about AIM is basically all the profits are short-term profits. So you really want to do AIM inside a Roth IRA. So you can shield all the future profits you’re going to make from rolling over and compounding prior investments. Because of what I like to tell people, I would say this is a very fair assessment. If you started from scratch and put 7000 a year into a Roth IRA for the next 10 years. Okay, you would have put in 70,000, we’ll say okay, and you started with AIM, you know, the first year, I’m willing to bet, after 10 years, that 70,000 will have grown to 250,000, 300,000 or more. And now all of that money can be rolled over to next year’s LEAPs. And all of that money is tax-free when you get those profits in the future. So if you started with, to me honestly, if you started with 100,000, I’m going to say, I would easily expect within 20 years, you’d have well over a million, well over a million. And I do weird things because I get bored at times. I wanted to show people why you want to invest long-term with AIM. So I picked one stock called Crocs, the shoe company. I couldn’t find LEAP prices. Crocs was the perfect stock because it went wilder than any LEAP I’ve ever seen. It started at $13. A year later, it was $71. A year later, it was $1. Okay, just to give you an idea, I faithfully did aim for 15 years with that stock. At times your cash went highly negative. It was one or two times when your cash went down, minus 250,000. But if you had deep pockets and it stuck with AIM. In 15 years crocs. You started with 10,000. 15 years later, you had 1,750,000. So I mean, I tell a lot of people, well, if you start investing at 50, you’ll have all the money you ever need by the time you’re 65, you know, with AIM, it doesn’t have to be Crocs, it could be other ones. And as I said, here’s one of the other beauties of it. If you get to the point where you know, in 20 years, let’s say you got to the point where you had 500,000 cash, 500,000 leaps? Well, guess what, you could start taking out three or 4000 a month of that cash as an annuity in effect, or as you know, a living as a replacement for the pension you’ll never see, okay? And the cash would still continue to grow, just a little slower, you know. So that’s one of the beauties of it, is you’re investing with a method that gives you large cash reserves. So if you ever had some kind of a financial emergency, you can take some of the money out. And I’ll give you an example of how cash can grow. I had one guy who had Microsoft, he started with 50,000 cash in three years, and his cash went from 50,000 to 143,000. Just to catch 40. Okay, he sent me a letter saying, Hey, Jeff, I’m so successful with AIM, I owe 47,000 in taxes because he couldn’t use a Roth IRA for some reason. I said, Okay, so what do I do? Do I have to sell my LEAPs? So I looked at his portfolio and said, no, you don’t have to do anything I said you started with 50,000. Now you have 143,000 cash. Just call your broker and say write me a check for 47,000, and mail it to me. Now you have 96,000 cash in your AIM Microsoft account. That’s plenty to do AIM with, you know, you’re not going to need more than that. So it takes care of itself, you know, with it, of course, I encourage people get the Roth if they can, there are some other tax forms, you know, way to save on taxes. I used to take people, I have a bunch of people who live in California and other places that I’d say, I can immediately increase your profits on AIM by 10% or 15%. Move from California to Nevada, or Texas or Florida, where there’s no state income tax and a much cheaper level of living, you know. So, I mean, so I always encourage people, I say, hey, you know, I said, when you get done with, you know, your job and retire, guess what, you’ll have all this money you made from AIM. And you can choose where you want to live, and you can live in a low-cost state, and save a lot of that money. You know, on future aim, you know, you will be paying any state income tax, because I mean, you still gonna be stuck with state income tax, even if you have a Roth IRA. So, you know, you need to do something to protect that. And that can be sizable at a million dollars. You know, I mean, I think California has the highest rate of like, 10% or 11%. So, you know, why would you want to make, you know, 200,000 and pay California 20,000, when you’re in your 60s or 70s, when you can get someplace else, and spend that 20 – 30,000 on yourself?
CORWYN:
Fair enough? Well, Jeff, it’s been a great show. We’re at the end, here. So thank you, that was a lot of information, a lot of content for our listeners. So guys, you all please make sure that you, you know, check out Jeff’s website, Triple J. So jjjinvesting.com. Hit his website, get his ebook, get his book, and start learning about how to make your money. work for you, you know, Robert Kiyosaki has this thing about the four quadrants. And Jeff is one side,
JEFF:
if you, you know, sign up on my landing page for my book, I will send you lots of other free bonuses, including my article on how to use puts in a bear market, I will send you a copy of this spreadsheet, I had one event, my pride and joy investor, one guy in January 2020, started with 550,000. By the end of 2020, he had 1,750,000 and made $1.25 million. That’s so effing quickly too when the market is cooperating with you because he locked in all those profits, and I changed his life for the better. And I felt so good about it. The main reason I do this is to help other people, not to help myself. Because I feel we were all put on this planet to help each other with the skills we were given by God. And I use those skills to try and help as many people as I can. And I have made people more than $8 million sitting in my sunroom with no shoes and no shirt.
CORWYN:
I love it. I love it. I love it. So thank you so much for being on the show with us today. I really appreciate it.
JEFF:
You’ll send me the link when you– are you going to post this so others can watch it?
CORWYN:
Yes, sir. Yes sir.
JEFF:
Please send me the link to it because I’d love to be able to tell my people about your show.\
CORWYN:
Yes, sir. Yes, sir. We most certainly will share– we’ll get that out to you, to you and your team, or to admin, and let you guys know when we air it. So we’ll definitely get that out to you.
JEFF:
All right. Pretty much, Corwyn. I appreciate it. And have a great rest of the day and week.
CORWYN:
All right. Awesome. All right. Thank you so much.
JEFF:
Okay, bye.
CORWYN:
All right, bye. So, guys, that was a fabulous show, guys. We got some very good information. So want to make sure that we take advantage of it, want to make sure that we apply it to our daily lives. There’s a lot of research that most of you many of you may need to do in order to understand how to maneuver. But guys, this is what this thing here is about the legacy building. And we have to in turn change our mindset in order to change our outcome. So I love that. I love you. You know how I feel. You know what I say? But I’m saying it anyhow, I love you. I love you. I love you. And we’re gonna see you guys out on the streets
