a PREDICTABLY PROFITABLE Power-Strategy! | Episode 182

Another day, another stock market route in China… leading to another day that’s looking incredibly bloody for the U.S. Stock market, with Dow Futures currently suggesting a DOWNWARD opening of well over 300 points.  Plus there’s the continuing weakness in Apple stock, the long-time market leader.  Now the good news… there’s a better way, and I’ll tell you all about it RIGHT NOW.  I’m Bryan Ellis.  This is episode 182.

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Hello SDI Nation!  Welcome to the podcast of record for savvy, self-directed investors like you!  Get ready for another dose of Predictably Profitable thinking!

This is a tune you’ve heard before… earlier this week, even.  China’s stock market suffers leading to a route across Europe and bringing on a bloody start to the day on Wall Street.  The same thing happened on the first trading day of this year…just 3 days ago, on Monday of this week.  That day, the Dow closed over 440 points lower than it closed on the last trading day of last year.  It was ugly.

And then there’s Apple… long the darling of Wall Street, but it reached a peak last year and has declined by a whopping nearly 25% since then.  Apple has lost about $180 BILLION in value… that’s about the same as the TOTAL value of Bank of America, the TOTAL value of Coca Cola, the TOTAL value of CITIGROUP, Disney or Intel.

And that’s just how much value Apple has LOST in the past year… and it’s your market leader.

Back on August 13, I sounded the alarm about the stock market on this very show.  I told you things looked bleak for China.  I told you that a very bad technical indicator had formed in the U.S. stock market, called the “death cross” by technical analysts.  And I told you that the China problem was a huge problem for Apple, and that Apple could continue to be the stock market leader… to the downside.

My friends, I’ve not been wrong.  I’ve been deadly accurate, in fact.

Here’s something else that’s deadly accurate… it’s a different way to think about investing your money.

Allow me to propose a hypothetical scenario to you… this is totally hypothetical, but definitely instructive.

Let’s imagine that it was 6 months ago – July 7, 2015.  Apple stock was trading at $125 per share, and the sky was bright with hope and optimism.

So a buddy of yours – who knows that you have some money – comes to you and says… “Hey, I’d like to buy $100,000 worth of Apple stock… the sky’s the limit!  Would you lend me the money? I’ll put up my shares of Apple as collateral for the loan.”

So, let’s forget about the legalities and complexity, and let’s just imagine that it was a simple matter for you to lend your buddy the money and take his stock as collateral.

Let’s further imagine that call me up and say… Bryan… I’ve got this guy who wants to borrow some money from me and place a really great piece of collateral as security.  What should I do?

Here’s what I’d tell you to do:

I’d tell you that, assuming the transaction itself is legally kosher, that you SHOULD lend the money to your buddy, under terms these conditions:

Condition #1:  You’re not lending $100,000 to your buddy, but $65,000.  Your buddy has to put up the other $35,000.

Condition #2:  You get paid an interest rate of 10% per year, with interest payments every month.

Condition #3:  The loan has to be repaid or extended – at your option – every six months… unless Apple drops to $95 per share (about 25% below it’s current value), at which time the stock has to be sold and you are repaid.

So you got it?  You’re only loaning 65% of the money, you’re getting 10% interest, it’s a 6 month deal, and you can sell the stock if it drops too far.

Let’s look and see what would have happened with that, shall we?

6 months ago today, July 7 2015, Apple was at $125.  You lend your friend $65,000 who then adds $35,000 of his own money and buys $100,000 of Apple Stock.  So far, so good.  Almost immediately, the stock drops to $120, then bounces back up to $132… it’s all good.

So you go on your merry way, not thinking about it… and one month later on August 7, you get an interest payment from your friend, just as he committed.  But interestingly, Apple has DROPPED… and is now at $115… $10 below where your friend bought it.

Another month passes, September 7 rolls around, and you get another payment from your friend… you’re still collecting 10% interest.  But Apple has dropped to $110.  So far, there’s been a 12% decline in the value of that stock.

Another month passes, and on October 7, you’ve just received another payment at your 10% interest rate.  Apple is still at $110, still at a 12% decline overall.

Another month passes, and on November 7, you get another payment from your friend.  You’re still making 10% interest.  Fortunately for your friend, Apple has bounced back up to $120.  Still a loss versus his purchase price, but better than before.

Another month comes and goes, December 7… and you get another payment from your friend.  Apple is at $118.  Still a loss for your buddy, but you’ve gotten another payment at a 10% interest rate.

Are you sensing a pattern here, my friends?  Your friend was basically WRONG about Apple… in fact your friend has LOST money on that trade… but you, as a WELL-SECURED private lender… you’ve been PROFITABLE and WELL SECURED the entire way.

So, one month to go.  January 7 rolls around.  That, my friends, is today.  As of the time I’m writing this, the market hasn’t yet opened.  But yesterday, Apple closed at… WHOA!  $100 per share.  That means your friend’s trade on Apple is DOWN by 20%... only $5 away from the drop-dead price of $95.

But you?  Today you get another payment, and your loan to your friend is over.  Today you have the option to call your loan due or extend it.  And I’m guessing based on how badly Apple is performing, you’re going to call it due.

What’s happened here, my friends?  You’ve been a PRIVATE LENDER.  You’ve profited from a loan against a good asset… and you’ve made money even as that asset declined in value.

Yet, every other person who poured money into Apple stock six months ago is looking at a loss of 20%.  But you?  You’re sitting pretty.  You’ve made a solid 10% interest rate the entire time… and you didn’t have to lose any sleep over it at all.

My friends, that is EXACTLY how private lending really works, but in the REAL ESTATE market.  It’s exactly the same thing… you, as a private lender, get to make REALLY ATTRACTIVE interest rates… you get regular payments… and your money is EXTREMELY WELL SECURED.

In this example, Apple stock lost $180 billion in value, but you STILL made your 10% interest.

What if Apple stock had stayed flat?  You’d still have made your 10%.

What if Apple stock had rocketed to the moon?  Well, your friend would be very happy… and you’d still have made your 10%.

Are you sensing a pattern here?  This is exactly how it works in good real estate-backed private loans.  This is the essence of being PREDICTABLY PROFITABLE… this is wisdom in investing, pure and simple.

Want to know more about how to make your money work for you in this way… simple, safe and strong… and be PREDICTABLY PROFITABLE?

Then go RIGHT NOW to SDIRadio.com/predictable.  I’m hosting a webinar about this very topic, to help you understand it further, and to see how to make your money work for you in a PREDICTABLY PROFITABLE manner.  So again, go right now to SDIRadio.com/predictable.

My friends, invest wisely today, and live well forever!

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