Tiers vs the old Banyan Hill services

How to weight your money today based on our view of the world -- Not investment advice

First things first…

Legal stuff written in plain english. Anything you read below is OPINION not investment/financial advice. Your money, your responsibility. Have to say this right up front and make sure you know that anything we say is just our opinion based on our experience, understanding, research etc. We can get things wrong, make mistakes and sometimes in markets crashes, crises, losses definitely are part of the game. That’s called RISK and its up to you to figure out how much risk you want to take.

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How to allocate stocks once we’re in Tiers vs Banyan Hill services

So this is a bit complicated

Let me use Profits Unlimited #PU to illustrate what the issues are in answering this particular email rn. Profits Unlimited has gone from being a large company/stock focus to a multi-cap one.

This change really accelerated over the last 2 years as we saw new world companies become available for us to invest in that we previously did not have access to. We believe even though these companies crushed our performance in 2021 and 2022 they give us incredible exposure to the BIGgest trends for the next decades. And we beleive that these phenomenal companies are going to generate the biggest returns over time.

Tier 1 - Obvious HODLs

This in turn led to us putting these (now after the crash) smaller/mid sized companies like ZM 0.00%↑ ABNB 0.00%↑ COIN 0.00%↑ MRNA 0.00%↑ TDOC 0.00%↑ into #PU.

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I wrote about Growth Blue Chips (#GBC) 🧦🔵🪙 in this a recent substack.

$MTTR 🏭 metaverse 🌌| growth 🧦🔵🪙 |wen #Bitcoin $50k 🚀

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Side note: I'd put PLTR 0.00%↑ RBLX 0.00%↑ HOOD 0.00%↑ TSLA 0.00%↑ U 0.00%↑ SHOP 0.00%↑ SQ 0.00%↑ and few others in this #GBC category.

Tier 1 (old #PU) is an intro to all the most important things

And our plan is to keep Tier 1 (the old #PU) to be like a smorgasbord or introduction to investing from our viewpoint.

Tier 1 will have the "obvious" stocks (in our judgment) that you will wish you bought and HODL'ed. Exampe — #GBC that I believe over time, these will turn into MEGA winners of the size of Google, Amazon, Apple, Microsoft etc.

Tier 1 — a taste of Tier 2 & 4

Tier 1 will also give you a taste of small cap/micro cap investing like MNTS 0.00%↑ and some exposure to new BIG megatrend type stocks like QS 0.00%↑ (batteries).

A stock like QS has incredible TSLA 0.00%↑ like upside. Why? Because it solves a major problem - next level energy storage thru solid state batteries. But it also has way more risk than the Growth Blue Chips. WhY? Because QS is till proving out that the technology can be scaled up so that it has commercial value. IF it scales it will be a MEGA winner.

PU will also get you an INto BIG trends thru smaller (not tiny) stocks like TSP 0.00%↑ (automation) PATH 0.00%↑ (robotics) MTTR 0.00%↑ (industrial metaverse). And also INto dominating technologies -- 3D printing we can see are experiencing an adoption tsunami. In my experience this is when you have you have MASSIVE blowout gains over multiple years. So, you get that thru DDD 0.00%↑ SSYS 0.00%↑ PRLB 0.00%↑

Crypto is a new “asset class” that needs to be invested in IMO

Finally, Tier 1 will have “obvious” crypto. Crypto that imo you will wish you bought and HODL’ed. Bitcoin and Ethereum fit this category for now. And then, we have Dogecoin which is a speculative bet that can provide a very high return in success mode.

Getting back to your question — what’s the right exposure to various Tiers vs the old Banyan Hill services?

Truthfully, the recent crash has scrambled and utterly chaotized the market for OUR stocks so it’s going to be hard to apply rn. Still, I believe the general guidance we laid out for you from what you cut and pasted in your email BROADLY applies.

50% - 70% Largeish stocks. Example #GBCs. Old #PU, New Tier 1.

15% - 30% Midsized stocks. Example stocks with a market cap of over $3 bill. Old #True Momentum, #Paul’s Secret Portfolio, New Tier 2.

10% - 20% Smaller sized stocks. Old #Extreme Fortunes, #100X club, #Paul’s secret portfolio

The big difference is that as I mentioned above — all OUR stocks have gotten cut down to size and we now have crypto as an asset class to invest in. T

I don’t know if NOW is the moment to rebalance truthfully

Why? Because the recent crash has crushed prices so much that nearly ALL of our stocks are now in this mid to small cap category.

If we are right, many stocks that are small/mid sized now, we believe will jump in price. They will be much larger and become companies that are worth 100s of billions of dollars. Our estimate of upside from where they are now is 3 - 5X in the next 3 - 5 years. I’d would assign this a high probability — 70%+ for both return and time frame. #GBC are an example of these stocks.

And if this is right, the best thing might be to leave things alone and wait for markets to rightsize before rebalancing.

Many technologies will transform many of our small stocks in Tier 2 and 4

Equally we believe that with a high probability that various technologies/categories are going to succeed in that same time frame — 3D printing, automation, robotics, metaverse, batteries, eVTOL, uranium/SMR nuclear, space, CRSPR. This will rocket the stock prices of these companies UP imo.

In our opinion, new industries like Space will show that they are real and be seen as something that everyone needs to invest in. The risk here is that some of these could take a big longer, 5 - 7 years. An example is eVTOL and Space.

Asset allocation today — a seriously difficult thing to do

I know I keep saying this but truthfully, asset allocation today is a crazy hard thing. In addition to prices having crashed and often making no sense. And the emergence of a new asset class - crypto. You also then have to consider the long term impact of the the old world fading out. I know this is a controversial view but imo there is plenty of evidence for this. If we are right, it means that “safe” assets aren’t safe at all.

Remember that none of this is investment advice. Whether you choose to follow what we say, or not you should consult a financial advisor to find out what is right for YOU.

Bottom line: general guidance for today’s world

My general guidance for risk assets (non- cash) would be to have 50%ish percent to BIGGER growth stocks like the Growth Blue Chips as well and non portfolio Growth stocks like $FB 0.00%↑ NFLX 0.00%↑that still have long term growth in front of them. This includes exposure to BIG crypto like what I mentioned above. More or less these stocks/crypto will be Tier 1.

Then, I would weight 30% in Mid/small cap stocks under $10 billion in market cap. And then 10% in small cap under $3 billion. These will all be in Tier 2.

And then 10% to microcap which is Tier 4.

Finally, those of you who are up for trading in and out in a bull market, you can assign 10% to trading options and crypto in Tier 3.

What’s my asset allocation?

No snark please. But my asset allocation is something like 50% in crypto. 35% - 40% in small/mid/micro. 10% in very very very illiquid investments. My volatility is out of this world. I do NOT recommend this allocation to anyone. And in truth it’s been determined as much by the restrictions I’ve had placed on me by Banyan Hill. So idk if I had the choice that you all have had, if this would be my asset allocation. However, given tax and liquidity constraints, I’m going to stick with my allocations.

Tomorrow: Sorry but thinking, analyzing, writing about this took WAY longer than I thought it would. I apologize if it does not answer the question clearly. I did my best given that it’s a very complicated question at a very chaotic time. I can do a follow up in the next coming weeks as folks have comments and questions. And I’ll do my promised writeup on AVEO 0.00%↑ and batteries tomorrow or later this week.

But I am not too tired to tell you that I ❤️❤️❤️LOVE YOU!!!

It’s Tuesday and so it’s your daily reminder that in the end there is only LOVE ❤️!!!

TODAY, on August 23, 2022, all of US - WE - Brittany & Dean, Kate & Ian, Patrick, Dan, Paul - WE are are immensely grateful for your belief and support! 🙏🙏🙏

Without YOU we would have no mission and no purpose! 🙏🙏

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