Stock Investing and Options Trading Course Outline:

Section One – Intro to Value Investing

  • Intro to Value Investing

Section Two – Treat this Like a Business

  • Set this up as a business
  • Think like a business owner
  • Take advantage of tax laws

Section Three – Finding Investment Ideas

  • Developing your Investment Niche
  • Finding Timely Investment Ideas
  • Copying the Pros
  • Tracking the Insiders
  • Free Resources to find ideas
  • Exercise – Find 2 A Rated Companies with Current Insider Buying

Section Four – How to Analyze a Publicly Traded Company (Part 1)

  • Analyzing a Business
  • Management Compensation
  • What to read in an Annual Report
  • Warren Buffett’s Moat
  • Important Growth Rates
  • Joel Greenblatt’s Formula
  • Putting All the Odds in Your Favor
  • The F-Score
  • Exercise – Find one business that fits the above criteria AND has a Shareholder Friendly CEO

Section Five – How to Analyze a Publicly Traded Company (Part 2)

  • Share Buybacks
  • Earnings
  • Return on Equity, Assets, and Capital
  • Historical Valuations
  • Trading Volume
  • Market Cap
  • Financial Ratio’s
  • Warren Buffett’s Secret to Success
  • Exercise – Find one company that fits 5 of the criteria taught in this session.

Section Six – How to Analyze a Publicly Traded Company (Part 3)

  • Financial Ratio’s continued
  • Cash is King
  • Free Cash Flow
  • Enterprise Value
  • EBITDA
  • The Best Valuation Metric
  • Intro to Valuations
  • Exercise – Use the financial ratio’s learned in this section and find a company that has at least 4 financial ratio’s that are currently lower than historical valuations.

Section Seven – Valuations 1-4

  • Valuation Methods 1 through 4
  • Exercise – Find a company using the criteria you have learned in the previous sessions and apply all Four Valuation Methods to determine a potential target stock price.

Section Eight – Valuations 5-8

  • Valuation Methods 5 through 8
  • Exercise – Find a company using the criteria you have learned in the previous sessions and apply Valuation Methods 5-8 to determine a potential target stock price.

Section Nine – Valuations 9-13

  • Valuation Methods 9 through 13
  • Exercise – Find a company using the criteria you have learned in the previous sessions and apply Valuation Methods 9-13 to determine a potential target stock price.

Section Ten – Short Term Indicators

  • Putting More Odds in Your Favor
  • Buying Opportunity vs Falling Knife
  • Follow the Big Money
  • Four Short Term Indicators
  • Using the Signals
  • Exercise – Find a company that had a recent drop in stock price and use the arrows to see when you got a buy signal.

Section Eleven – Selling Puts and Calls – Getting Paid to Wait

  • Get Paid to Wait
  • Options Basics
  • Buying Options
  • Selling Options
  • Terminology
  • Get on the Right Side of the Trade
  • Long Call
  • Short Call
  • Long Put
  • Short Put
  • Creating Margin of Safety (My Favorite Trade)
  • Generate Monthly Income on Existing Positions
  • Increase Your IRA Contributions without Depositing any Money
  • Long Term vs Short Term
  • Volatility:  Implied vs Historical
  • In the Money, At the Money, or Out of the Money
  • Exercise – Identify a company that you want to own and select and a strike price that creates a discount, or Margin of Safety.  Then select the length until expiration.

Section Twelve – Buy Write Combo

  • Profit if a Stock Doesn’t Move
  • Double Your Returns
  • Double Digit Returns with Zero Stock Movement
  • Lower Your Cost Basis
  • Single Digit Returns on a LOSING Trade
  • Selecting Strike Prices and Expiration
  • Exercise – Find a company that fits our criteria.  Back Test the returns using this strategy for 6 months.  Compare the returns to the stock return if you did not place this trade.

Section Thirteen – Fixing a Loser 

  • Correcting a Losing Stock Trade
  • Correcting a Losing Options Trade
  • Profit from a Loser
  • Exercise – Back Test an options trade that did not work out.  Find a strike price and expiration date that will correct the losing trade and turn it into a winner.

Section Fourteen – Lowering Your Cost Basis

  • A Few Ways to Make Money
  • DCA to Lower Cost Basis
  • Dividends to Lower Cost Basis
  • Options to Lower Cost Basis
  • Short Term vs Long Term Options Expiration Dates
  • Buying the Dips (if it makes sense)
  • Exercise – Find a company that you have already used in your homework assignments.  Lower your Cost Basis using the strategy taught in this session.  Compare the results using multiple short term trades to selecting one longer term trade.

Section Fifteen – The Importance of a Checklist

  • Using an Investment Checklist
  • Scoring System for Our Analysis
  • Buy, Sell, Trade, or Add to Watch List
  • Exercise – Find a company and do a complete analysis using every item on this checklist.  Once complete, determine if the company should be bought, traded, or put on a watch list.

Session Sixteen – Risk Management and Position Sizing

  • Types of Investment Risk
  • Risk Management
  • Asset Allocation
  • Diversification
  • Position Sizing
  • Stock Allocation, Options Allocation, and Cash Allocation
  • Exercise – Determine how much you want to allocate to buying individual stocks, how much in options trades, and how much you want to leave in cash for future opportunities.  Now find at least 10 potential stocks that interest you and put them on your watch list.  Each of the 10 companies MUST be in different industries for diversification purposes.

Section Seventeen – Managing an Existing Position

  • Quarterly Reports
  • When to Sell
  • The Story Changed
  • A Breached Moat
  • OverValued
  • Velocity of Money
  • Exercise – Select a company that you have already used in these exercises.  Look at the previous 8 quarters using the Back Testing tool and see if the story has changed, the Moat has been breached, or the valuation has changed based on what you learned in this session.

Section Eighteen – Past Positions

  • What Worked
  • What Didn’t
  • And Why

Bonus Section – Credit Spreads

  • Make Money in 3 Directions
  • Trade for Monthly Income
  • Market Index
  • Credit Spreads
  • Bull Market Trade
  • Bear Market Trade
  • Neutral Market Trade
  • Condors
  • Delta
  • Probability of Success
  • Minimum Monthly Return
  • Length of Trade
  • Rules for Exiting a Trade
  • Track record since January 2008
  • Exercise – Back Test a credit spread for one full year using the rules of the trade and record the results.

 

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