Investment Philosophy

My money lives at two extremes.

That's the single most important lesson I took from Nassim Taleb's *Antifragile*.

The barbell strategy boils down to one sentence: park 90%+ of your capital in the safest possible place, and use less than 10% to swing for asymmetric upside.

Nothing in the middle. "Medium risk" is a trap — when the storm hits, that's exactly where the floor gives out first.

Years of market tuition fees hammered this into me. My logic became dead simple: abandon every middle option and pin my assets to the far left and far right of the risk spectrum.

I. The Foundation: Accept That You Will Be Wrong

Every trade I make starts from one cold assumption: I will be wrong about the macro picture, and I will be wrong about individual companies.

I don't have infinite cash flow, and I don't have the ability to see ten years into a company's future. So I never go all-in on a single bet.

My basket has to be big and diversified: index ETFs (SPY/QQQ) as the base layer, low-correlation value and dividend assets (BRK.B/SCHD), plus utility-grade "social rent collectors" like China Yangtze Power and China Shenhua. Core tech giants as long-term holdings, all kept as weakly correlated as possible.

The weaker the correlation between them, the better.

That way, no single black swan can wipe me out in one blow.

This is my physical defense line.

At the same time, I set myself an ironclad rule: no single stock, no single sector can exceed a set percentage of my portfolio. No matter how bullish I am. Period.

II. The Left End (90%+): Options & "Purchasing Power That Never Depreciates"

I used to think selling options at lows was defensive. It's not. Naked option selling is fundamentally a bet that disaster won't happen — that's still offense.

It took me a while to fully internalize: options are only defensive when backed by an underlying pool of "purchasing power that never depreciates."

What is "purchasing power that never depreciates"?

It's 100% cash collateral — specifically short-term Treasuries like SGOV. Its mission isn't to "grow" but to "not shrink" and "always be available." This is the ultimate foundation for every defensive move.

So the vast majority of my capital sits in an "enhanced bond" state:

• Cash portion: Parked in short-term Treasuries, earning risk-free yield.
• Options portion: I use this cash as collateral and watch my "global blue-chip wish list." Only when prices drop to a level I consider an absolute bargain (deep OTM) do I pull the trigger — selling puts (Sell Put / Put Spread).

This builds an active defense system:

• If the market stays flat or grinds higher, I collect two income streams: Treasury interest + options premium.
• If the market truly crashes to my target price, my pre-staged cash automatically deploys, scooping up core assets at a deep discount.

Think of it as reserves fortifying a position behind friendly lines — and collecting tolls while they wait. If the enemy never arrives, I profit steadily. If they do push through, my ammunition (cash) is already in place. I take assignment with confidence.

What if we get an epic, once-in-a-generation crash that blows through every level?

I've war-gamed this scenario many times. My conclusion: that's actually the moment I've been waiting for. It means I get to build a personal ETF of global blue-chips at wholesale prices. Buying cheap enough is the strongest defense there is.

And once I've "passively taken assignment" at an extreme margin of safety, my account undergoes two hardcore transformations:

• The "locked yield" effect on value stocks: High-dividend names like Shenhua or SCHD — buying at crash lows locks in an outsized dividend yield for years to come. That's the real "set it and forget it" foundation.
• The "can't-lose trade" on tech giants: What happens when you take assignment on big tech at a massive margin of safety? They may not pay big dividends, but they monopolize global growth and are cannibalizing their own float with monster buybacks. Buying humanity's best tech infrastructure at a fire-sale price — that trade is already won the moment it fills.

III. The Right End (5-7%): A Seat Reserved for Dreams

The left end guarantees I never leave the table. But to actually keep up with a bull market, I need this small 5-7% allocation on the far right.

This money gets completely unleashed. I use it exclusively for long-dated call options (LEAPS) — pure asymmetric bets.

The math is simple: even if this 5% goes to zero, it's a flesh wound. A year or two of premium income from the left end covers it.

But I don't use it recklessly. I only pull the trigger when three conditions align: a long-term trend is intact, sentiment indicators are recovering from an extreme oversold reading (right-side confirmation), and market fear has hit rock bottom. All three must converge.

When I do catch the main wave, the leverage on this 5% produces explosive returns — enough to make sure I never miss a generational move.

IV. Memo to Self: Don't Predict, Just Respond

I write all this down so that in moments of euphoria or panic, I can hold my own hand still.

The vast majority of my money exists only to "survive and collect." A tiny sliver is allowed to "chase dreams."

This is the essence of the barbell strategy: the safe end ensures survival, the risk end captures miracles.

So I don't predict tomorrow. I only respond to extremes.

In calm markets, be a patient premium collector. In crashes, be the bargain hunter everyone else is afraid to be. Only when fear and trend collide do I become a cold-blooded sniper.

Step 1: Build a Core Asset Whitelist

— I only sell puts on companies I genuinely want to own.

Before every new position, I ask myself one question: "If this gets assigned, am I happy paying this price and holding for 3+ years?" If the answer is "maybe," I walk away. No exceptions.

My stock selection and dynamic adjustment criteria:

• Top 20 Core Pool: Strictly limited to the 20 stocks/ETFs with the hardest fundamentals.
• Dynamic Removal (Stop-Loss Iron Rules):
  • Scenario A (fundamentals collapse): Fraud, moat destruction. Close immediately regardless of P&L. No attachment.
  • Scenario B (valuation adjustment): Fundamentals intact, just a lower target price. Roll to a lower strike and keep waiting.

Step 2: Volatility-Tiered Tactics (Naked vs. Spread)

— Same Sell Put strategy, but I treat each ticker differently based on its "volatility personality."

I used to just blindly sell puts on everything. Then I learned the hard way that different tickers demand different structures:

1. The Wild Bunch (high-vol tech):
   • Profile: High IV, fat premiums, but can easily drop 10%+ in a day.
   • My play: Bull Put Spread.
   • Logic: I give up a sliver of premium (buying the protective leg) but lock in my max loss. Tech stocks can gap to oblivion — the spread is my seatbelt. I'm harvesting IV, not volunteering for a 50% haircut overnight.
2. The Steady Eddies (low-vol value stocks):
   • Profile: Low IV, stable price action, thin premiums to begin with.
   • My play: Naked Sell Put (CSP).
   • Logic: If it doesn't drop, the payout is already modest. Adding a protective leg would eat whatever's left. More importantly, these are "forever hold" stocks. If they drop through my strike, I'm thrilled to take assignment and collect dividends.

Step 3: The Counter-Intuitive Timing Rule

— Why I sell *longer* duration (60+ DTE) options during big selloffs.

Textbooks preach 30-45 DTE for optimal theta decay. But during a real panic, I break that rule and sell 60-day or even longer-dated puts.

My logic:

1. Sacrifice efficiency for an absolute safety cushion: Premiums are fat during a crash. Selling 60-day puts lets me push the strike way down — 20%+ below spot. Theta decays slower, sure, but getting assigned at that level would be a gift.
2. The pleasant surprise: IV crush is more profitable than theta: Give it a week or two. Once fear subsides, IV collapses. The option price craters. Result: even though I sold a 60-day contract, I often close at 50% profit within a month. I got the safety cushion AND the capital efficiency.

Step 4: Take-Profit & Risk Management Iron Rules

— Surviving beats profiting. Always.

1. Take profit at 50-60%: Once I've captured the bulk of the premium, I close and redeploy. The last few dollars are the "fish tail" — maximize capital turnover instead.
2. Refuse gamma risk: Under 30 DTE, I force-roll to the next month no matter what. I don't earn "heartbeat money" from expiration week.
3. Never go all in + SGOV double dip: Always keep 50%+ in cash. Dry powder for the crash. Idle cash goes into SGOV (Treasury ETF) for 3-5% risk-free yield, while also serving as put-selling collateral. Premium + Treasury interest = double income.

Step 5: What If I Get Assigned? (The Wheel Strategy)

— Closed-loop thinking: flip the script and keep collecting.

If the stock breaks through my safety cushion and fundamentals haven't changed (still in my Top 20), I take assignment. The playbook:

• Hold the shares. Become a shareholder.
• Immediately sell covered calls.

Why I Don't Sell 1-Year Puts Like the Big Players

— Different capital size, different goals.

If you're running institutional money with deep fundamental conviction, long-dated puts work fine. But for most retail accounts, 1-year+ DTE comes with three real drawbacks:

• Liquidity desert: 60-day options trade well and roll easily. 1-year deep OTM options? Good luck getting a fill when you need to adjust.
• Fundamental black swans: One year means surviving four earnings reports. The longer the horizon, the higher the odds of a fundamental surprise.
• Opportunity cost lockup: Your capital is serving a one-year sentence. If a better opportunity shows up mid-term, you're handcuffed.

Step 6: Satellite Capital — Right-Side Offense

— A small allocation to chase high-payoff opportunities.

If all I did was collect premiums, I'd seriously lag in a bull market. So when the market confirms a right-side uptrend or IV is historically low, I deploy a small portion offensively:

• LEAPS Calls (long-dated calls): When I'm bullish on a company's multi-year thesis (e.g. MSFT) and IV is cheap, I buy ITM LEAPS as a stock replacement. The freed-up capital goes into SGOV.
• PMCC (Poor Man's Covered Call): Use LEAPS as the underlying, sell short-term calls on top. Low capital outlay, outsized return on investment.

Advanced Tactic — "Zero-Cost Short" (Ratio Put Spread)

— When I think a pullback is coming but I also want to buy the dip, I use this move.

This is a "have your cake and eat it too" strategy.

Scenario: I expect a short-term pullback and want to profit from it, but if the selloff goes extreme, I'd love to scoop up shares at even lower prices.

My setup (1x2 Ratio Put Spread):

• Buy 1 Put (defensive leg): Closer to spot, protects against the initial drop.
• Sell 2 Puts (assignment leg): At my target price (the floor), financing the long put and staging for assignment.

Cost: $0 (sometimes even a small credit).

Three outcomes, all favorable:

• A. Sideways / minor dip: Free downside protection. No cost, no loss — like getting insurance for nothing.
• B. Moderate decline (sweet spot): The long put prints money while the short puts stay OTM. Pure short profit.
• C. Crash to assignment (better than naked selling): Long put gains offset part of the assignment loss. I end up buying shares at my target price with a cost basis way below a simple CSP.

Takeaway: this is a level up from vanilla Sell Put because it lets you profit on the way down instead of just enduring it.