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The Arbitrageur Investing System The Truth Behind Investing arbitrageportfolio.n

The New Modern Portfolio Theory - The truth behind investing

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Let’s take a closer look at the real numbers. In 2014 to max out your 401K and IRA. A single investor will have a negative cash flow of $1916.67, and worst of all, you cannot touch that money until you are 65 years old. That could cost you close to $20,000 in management fees with investment returns of lower than 8% based on the old speculation module. But I know we can do better than this; in fact, much better. If you apply your capital to the Arbitrage Strategy—first, your money will never be frozen and you can have access to it whenever you want and not 30 years from now. Second, given the investment terms of a CD at 2%, a loan at a 5% and a preferred share yielding 8%, you will have a positive monthly cash flow of $172.68—producing free capital now so you can afford the lifestyle you deserve today! Unlike the 401K and IRA strategy that needs a lifetime to work in your favor, the Arbitrageur Investing System will help you reap the rewards of all your hard work now rather than later. Which do you prefer: pay the bank $2,000 a month for a chance to play later at 65, or have it pay you $200 now so you can enjoy the present without having to dream about the future?   Inside the Arbitrageur Investing System, I will take you by the hand and show you step-by-step how to achieve these financial returns. We will go from module one, describing how to raise investment capital, all the way to module four, where you will be able to create your very own income portfolio, just as I did. This system includes practical examples and case studies with an interactive and customizable calculator. Which will do all the hard math for you so you do not have to, thus meeting all your individual investment needs, conditions, and terms.   In module one, you will learn the 7 ways to raise investment capital from scratch. Plus, you will learn how to adjust your tolerance for risk according to your personal profile.   In module two, you will learn how to invest under a corporate structure in order to maximize your returns while simultaneously minimizing your taxes.   In module three, you will learn how to invest like Buffett. And pull the same exact $300,000,000 trade he pulled on Bank of America and Goldman Sachs. Here, you will learn how to beat the investment bankers at their own game.   In module four, you will learn all the technicalities and fundamentals of investing, including tools and calculators that will do and adjust the math of the system to your own particular investment situation—from trading in complex investment instruments like ETFs all the way to knowing how to operate on margin.

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Page 1: The New Modern Portfolio Theory - The truth behind investing

The Arbitrageur Investing System

The Truth Behind Investing

arbitrageportfolio.net

Page 2: The New Modern Portfolio Theory - The truth behind investing

Agenda • Introduction.• Qualifications.• The Psychology of Investing.• Average Cost Down and Diversification. • How the Professionals Invest.• The Ones Who Can Beat the Market.• Why Are We Paying Those Fees?• Wall Street’s Invisible Game.• Fees on Top of Fees (Funds of Funds).• Breaking the 4% Rule.• How to Accelerate your Retirement Age (from 65 to less than 35).• How to Invest Outside 401Ks and IRAs.• Investing like the VCs, Bankers, Buffett, and the Government (Preferred

Shares).• How to Double Your Money and Investing Performance in a Single Bank

Transaction.

arbitrageportfolio.net

Page 3: The New Modern Portfolio Theory - The truth behind investing

Why are you here? • You want to double your investing performance.• You want to learn how to invest outside 401Ks and IRAs.• You want to accelerate your retirement age from 65 to less than 35.• You want to achieve your financial independence to start enjoying the

lifestyle you so deserve.

arbitrageportfolio.net

Page 4: The New Modern Portfolio Theory - The truth behind investing

How are we going to achieve this?• With a truly passive income portfolio.

• Passive income IS:• Owning assets that make your money work for you.

• Passive income is NOT:• Writing a book or owning a website. That is called “residual income.”

arbitrageportfolio.net

Page 5: The New Modern Portfolio Theory - The truth behind investing

What will this mean for you?

Travel

Family

Lifestyle Freedom

Source: MorgueFile

arbitrageportfolio.net

Page 6: The New Modern Portfolio Theory - The truth behind investing

Why should you listen to me?• About me:

• Author.• Investor.• Engineer.

Page 7: The New Modern Portfolio Theory - The truth behind investing

Why should you listen to me?

Performance

“People should not talk about investing if they are not willing to show their actual holdings and performance.”

Holdings

arbitrageportfolio.net

Page 8: The New Modern Portfolio Theory - The truth behind investing

Who is this course NOT for? • Speculators.• People with extreme amounts of bad debt. • People looking for a get-rich-quick scheme.• Non-Action Takers (lizard brains, wantrepreneurs).• People with over half-a-million dollars of net worth.

arbitrageportfolio.net

Page 9: The New Modern Portfolio Theory - The truth behind investing

Who is this course FOR? • Avid income investors.• Smart and educated people.• Action Takers (Entrepreneurs).• People looking to lower their retirement age.

arbitrageportfolio.net

Page 10: The New Modern Portfolio Theory - The truth behind investing

The art vs. the science of investing• In reality psychology, MINDSET is more important than the investing math.

Source: Aron Eden

Source: Pat Zaby

arbitrageportfolio.net

Page 11: The New Modern Portfolio Theory - The truth behind investing

The art vs. the science of investing

Source: J.P. Morgan Asset Management

arbitrageportfolio.net

Page 12: The New Modern Portfolio Theory - The truth behind investing

What does this mean for you?

Source: Behavior Gap

Source: Davis Advisors

arbitrageportfolio.net

Page 13: The New Modern Portfolio Theory - The truth behind investing

What do you believe?“Buy low, sell high” (average cost down).

“The only free lunch” (diversification).

Source: Rebalance IRA

Source: MOAASource: Behavior Gap

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Page 14: The New Modern Portfolio Theory - The truth behind investing

WRONG

THAT IS NOT HOW THE PROFESSIONALS OPERATESource: UBS Wealth Management Americas

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Page 15: The New Modern Portfolio Theory - The truth behind investing

What do they really believe?

Source: Bloomberg News

Source: Reuters News

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Page 16: The New Modern Portfolio Theory - The truth behind investing

What is really happening?

Source: J.P. Morgan Asset Management

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Page 17: The New Modern Portfolio Theory - The truth behind investing

What is really happening?

Source: J.P. Morgan Asset Management

arbitrageportfolio.net

Page 18: The New Modern Portfolio Theory - The truth behind investing

What is really happening?

Source: J.P. Morgan Asset Management

arbitrageportfolio.net

Page 19: The New Modern Portfolio Theory - The truth behind investing

What is really happening?

Source: UBS Wealth Management Americas

arbitrageportfolio.net

Page 20: The New Modern Portfolio Theory - The truth behind investing

But do they beat the S&P 500?

Source: J.P. Morgan Asset Management

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Page 21: The New Modern Portfolio Theory - The truth behind investing

No! They do not beat the market

Source: J.P. Morgan Asset Management

arbitrageportfolio.net

Page 22: The New Modern Portfolio Theory - The truth behind investing

What they want are your fees

Source: Rebalance IRA

arbitrageportfolio.net

Page 23: The New Modern Portfolio Theory - The truth behind investing

What they want are your fees

Source: Personal Capital

arbitrageportfolio.net

Page 24: The New Modern Portfolio Theory - The truth behind investing

What are you paying for?

Source: J.P. Morgan Asset Management

arbitrageportfolio.net

Page 25: The New Modern Portfolio Theory - The truth behind investing

Not all funds are created equal

Who Routinely Trounces the Stock Market? Try 2 Out of 2,862 Funds (0.07%).

Source: The New York Times

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Page 26: The New Modern Portfolio Theory - The truth behind investing

Beating the market is an insider’s game

Source: Amazon

Who do you work for, this guy (the client) or Salomon Brothers? You work for me; I pay your bonus.

Commissions (commish) determine what you are told, what you will know, and how much you can find out.

Future stock prices are difficult, if not impossible, to predict . . . there is lots of time to ride out the peaks and valleys of

investment cycles when you have a lifetime of earnings from employment ahead of you.

Every time you decide to get out of the market or get in, the investors you buy from or sell to are professionals. Of course, the pros are not always right, but how confident are you that

you will be right more often than they will be?

arbitrageportfolio.net

Page 27: The New Modern Portfolio Theory - The truth behind investing

But there is a new flavor on the street

• Funds of funds• Age target funds• Automated investment service (robot trading)

FEES ON TOP OF FEES

Source: Associated Newspapers

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Page 28: The New Modern Portfolio Theory - The truth behind investing

How much are you paying?

Source: The Wall Street Journal

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Page 29: The New Modern Portfolio Theory - The truth behind investing

How much are you paying?

Source: Betterment

Time Typical DIY-WSJ Wealthfront Betterment0.71% 0.02% 0.01%

+ index cost 0.02% 0.02%

Monthly $ 59.17 $ 22.92 $ 17.17

Yearly $ 710.00 $ 275.00 $ 206.00

30 Years * 6.39% $ 60,138.38 $ 23,293.03 $ 17,448.60

Source: Wealthfront

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Page 30: The New Modern Portfolio Theory - The truth behind investing

Do they beat the market?

Source: Betterment

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Page 31: The New Modern Portfolio Theory - The truth behind investing

Do they beat the market?

Source: Wealthfront

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Page 32: The New Modern Portfolio Theory - The truth behind investing

What have we learned so far? • To come back from a 50% loss you have to make a 100% gain.• You are your own worst enemy (behavior/mindset).• What the pros really think about diversification and average cost down.• Only 0.07% of funds beat the market.• Advisors are only out for themselves.• Bankers are only after your fees.• Stock prices are impossible to predict.• Trying to time the market is a fool's errand.

Average Annualized Performance

S&P500 7.40%-9.2%Funds 7.20%

Funds of Funds *6.39% 4.57%-7.00%-7.60%Retail Investor 2.50%

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Page 33: The New Modern Portfolio Theory - The truth behind investing

Is this OK with you?

Are you going to keep waiting until 65? Are you going to start now?

Source: MorgueFile

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Page 34: The New Modern Portfolio Theory - The truth behind investing

What is the problem with the rat race?

Source: Ramit Sethi

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Page 35: The New Modern Portfolio Theory - The truth behind investing

Will it work? The 4% Rule

Source: J.P. Morgan Asset Management

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Page 36: The New Modern Portfolio Theory - The truth behind investing

Will it work? The 4% Rule

Source: J.P. Morgan Asset Management

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Page 37: The New Modern Portfolio Theory - The truth behind investing

Will it work? The 4% Rule

Source: J.P. Morgan Asset Management

arbitrageportfolio.net

Page 38: The New Modern Portfolio Theory - The truth behind investing

Will it work? The 4% Rule

Source: J.P. Morgan Asset Management

arbitrageportfolio.net

Page 39: The New Modern Portfolio Theory - The truth behind investing

The flaws of the 4% rule

Source: Vanguard

arbitrageportfolio.net

Page 40: The New Modern Portfolio Theory - The truth behind investing

The flaws of the 4% rule

Source: Hershey Source: Freepik

4% 8%

arbitrageportfolio.net

Page 41: The New Modern Portfolio Theory - The truth behind investing

How do we get that 8%?

Source: J.P. Morgan Asset Management

arbitrageportfolio.net

Page 42: The New Modern Portfolio Theory - The truth behind investing

Preferred shares

Source: CNBC

arbitrageportfolio.net

Page 43: The New Modern Portfolio Theory - The truth behind investing

What are preferred shares?

Source: The Wall Street Journal

Source: Ironwood CapitalSource: Mortgage News Daily

arbitrageportfolio.net

Page 44: The New Modern Portfolio Theory - The truth behind investing

The 8% yield

Source: The Wall Street Journal

arbitrageportfolio.net

Page 45: The New Modern Portfolio Theory - The truth behind investing

Why preferred?

Source: SEC

JPM-PRB C-PRP WFC-PRT

arbitrageportfolio.net

Page 46: The New Modern Portfolio Theory - The truth behind investing

Why preferred? The start-up fever

Source: Wilson Sonsini Goodrich & Rosati

arbitrageportfolio.net

Page 47: The New Modern Portfolio Theory - The truth behind investing

What is the risk?

Source: SEC BML-PRI WFC-PRJarbitrageportfolio.net

Page 48: The New Modern Portfolio Theory - The truth behind investing

What is the risk?

Source: Financial Services Technology

arbitrageportfolio.net

Page 49: The New Modern Portfolio Theory - The truth behind investing

Investing like Buffett

Source: Google Finance / Reuters

arbitrageportfolio.net

Page 50: The New Modern Portfolio Theory - The truth behind investing

At 35 or 65?

Source: Fun Eye Test

65? 35?

arbitrageportfolio.net

Page 51: The New Modern Portfolio Theory - The truth behind investing

At 35 or 65?

65? 35?

Source: Wedding by Color Source: Tesla

arbitrageportfolio.net

Page 52: The New Modern Portfolio Theory - The truth behind investing

Introducing the Arbitrageur Investing System: An Advanced and Proven Step-by-Step

System for Income Investing: Capable of Doubling Your Money in a Single Bank

Transaction–Finally Making Your Money Work for You!

arbitrageportfolio.net

Page 53: The New Modern Portfolio Theory - The truth behind investing

How does it work?

arbitrageportfolio.net

Page 54: The New Modern Portfolio Theory - The truth behind investing

How does it work?

CD

Loan

arbitrageportfolio.net

Page 55: The New Modern Portfolio Theory - The truth behind investing

The net interest margin trade

Source: FRED

arbitrageportfolio.net

Page 56: The New Modern Portfolio Theory - The truth behind investing

Lowering your retirement age

Source: Vanguard

arbitrageportfolio.net

Page 57: The New Modern Portfolio Theory - The truth behind investing

Lowering your retirement with performance

Average Annualized Performance

Preferred Shares ~8.00%

S&P500 7.40%-9.40%

Funds 7.20%

Funds of Funds *6.39% 4.57%-7.00%-7.60%

Retail Investor 2.50%

arbitrageportfolio.net

Page 58: The New Modern Portfolio Theory - The truth behind investing

The cash flow algorithm

Mgmt. Cost: $17,448.60

arbitrageportfolio.net

Page 59: The New Modern Portfolio Theory - The truth behind investing

The Step-by-Step System

arbitrageportfolio.net

Page 60: The New Modern Portfolio Theory - The truth behind investing

Module 1: The Capital

• Foreword about how the system came to be.• The seven ways of raising investment capital.• Risk descriptions and investing classifications.• The difference between building wealth and being rich.• Reading guidelines and explanations for better understanding.

arbitrageportfolio.net

Page 61: The New Modern Portfolio Theory - The truth behind investing

Module 2: The Corporation

• How to create your own corporation.• Which corporate structure to select.• The importance of protecting the corporate veil.• The tax efficient way of investing via a separate legal entity.• The difference between a Limited Liability Company and the C & S-type

corporations.

arbitrageportfolio.net

Page 62: The New Modern Portfolio Theory - The truth behind investing

Module 3: Commercial Arbitrage

• How to structure a commercial loan.• How to create a commercial certificate of deposit (CD).• How to double your money in a single bank transaction.• What commercial arbitrage (net interest margin investing) really is.• Wall Street's biggest secret: the difference between computing and

amortizing interest rates.• Step-by-step description of how to execute the same trades Warren Buffett

pulled on Bank of America and Goldman Sachs.• How banks actually make money and how you can do it as well, including

interactive and highly customizable spreadsheets together with an investing profit calculator.

arbitrageportfolio.net

Page 63: The New Modern Portfolio Theory - The truth behind investing

Module 4: Income Portfolio• The Rule of 72.• How to make your money work for you.• The rules of trading: when to buy and when to sell.• A highly customizable dividend coverage calculator.• Social lending best practices, also called peer-to-peer lending (P2P).• A list of my ten personal favorite investing instruments and resources.• The correct asset allocation (ETFs, CEFs, Single Equities, and Bonds). • How to trade like a professional by using the "golden rules" of trading on margin.• The Arbitrageur's proprietary equation that tests equity statistics to predict their future

performance.• The importance of investing for income (interests, dividends, royalties, and

distributions) without speculation.• What Jesse Lauriston, "famous stock operator," thought about the Dow, S&P500,

diversification, and dollar cost averaging.• What it really means to be diversified, "internal vs. external diversification," showing

you the right allocation guidelines.• Arbitrage investing fundamentals and technical analysis; explanation of the technical

aspects of moving averages and market volumes, plus the fundamental importance of free cash flow and net asset value.

arbitrageportfolio.net

Page 64: The New Modern Portfolio Theory - The truth behind investing

No need to be an Einstein

Source: John Kapeleris

arbitrageportfolio.net

Page 65: The New Modern Portfolio Theory - The truth behind investing

What are your options?

• You can figure it out yourself and try to fill in the gaps.• You can keep paying fees on top of fees inside the rat race.

arbitrageportfolio.net

Page 66: The New Modern Portfolio Theory - The truth behind investing

START CALLING YOUR OWN SHOTS!

Source: NY Posthttp://www.arbitrageportfolio.net/

arbitrageportfolio.net

Page 67: The New Modern Portfolio Theory - The truth behind investing

Thank You!

http://www.arbitrageportfolio.net/

arbitrageportfolio.net