Dear Fellow Expat:
Everyone has that favorite uncle.
The uncle who let you have a beer underage. The one who wouldn't tell your parents when you did something wrong. The one who bailed you out - or maybe still will on occasion...
As for me, I love Uncle Warren.
And in a minute or so I think you will, too.
Uncle Warren Buys More Occidental
The trade of the year, hell, the investment of the year, is in Occidental Petroleum (OXY). With shares trading down into the $57 range this week - into what we like to call the "Buffett Buy Zone" - the Oracle of Omaha bought even more of the company.
Berkshire now owns 25% of Occidental. The conglomerate can buy up to 50% of the outstanding shares. So, we're only halfway through Buffett's buying process.
"Okay - great for Warren Buffett, but what about me?" I can hear you ask.
The answer is simple.
Buffett is buying over and over... and over... All you need to do is sell put options around this Buffett Buy Zone, and you'll make money.
The OXY Aug 18, 2023 $52.50 put trades for $0.65. Sell that put.
And, instead of putting up $5,185 in margin, buy the OXY Aug 18, 2023 $50 put.
This is called a put spread.
Now, if you do that, you'd put up $220 in margin to make $30.
That's a 14% return in 50 days, and it carries a probability of profit of about 86%. I have a very hard time imagining Buffett would somehow not buy the stock at $52.50 if Berkshire has already spent billions in the $57 range.
Thanks Uncle Warren - you're the best.
That's all.
Garrett Baldwin
Florida Republic Capital (Available on Substack)
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.