Warren Buffett commented that putting your money in an S&P 500 index fund would beat buying gold. He gave some numbers which I don’t recall. I think along the same lines, the way to beat inflation and to protect oneself from market crashes is to buy and hold stocks of the best companies that one is fairly confident are going to bounce back. Currently Tesla fits that role.
As I no longer have an income stream I have been creating one by selling covered calls. The problem is that selling covered calls on long term holds runs the risk of opportunity loss if the shares are called. I solved this problem by splitting my portfolio into LTBH and income. The split oscillates between 80-20 and 2/3-1/3. That creates sufficient income to cover my expenses with cash left over.
After much fumbling around I found a great stock to use for selling covered calls, RIVN! It had a ridiculous run-up after the IPO but with the market crash it came back down to earth. I started buying in late June:
RIVN since IPO: Rivian Automotive Inc. Cl A, RIVN Advanced Chart - (NAS) RIVN, Rivian Automotive Inc. Cl A Stock Price - BigCharts.com
It seemed to me that Rivian was the EV startup most likely to succeed. Their trucks got great revues and the company has Amazon’s backing, not just capital but an order for 100,000 delivery vans.
Amazon Electric Delivery Van by Rivian Launch Event and Walkthrough! Is This The Best Electric Van?
The presentation audio is crappy, skip to minute 8:30 for the interesting part
youtube.com /watch?v=dd7WQmnzijI
Amazon Electric Delivery Van by Rivian Launch Event and Walkthrough! Is This The Best Electric Van? - YouTube
Since June the income from covered calls has allowed me to accumulate both Rivian and Tesla. I’ve added over 16% to Tesla at an average price of $212.90.
BTW, I’ve split my Rivian calls into two parts, half I sell at near the money for max premium and the other half out of the money to catch stock run-ups. It’s working nicely. In time Rivian might become part of LTBH.
The Captain