I just finished watching 29 hours of Meet Kevin’s videos and I watched the whole Stocks and the Psychology of Money course. My goal in this review is to boil this down to actionable items that I believe are important. Kevin says to copy wealthy people when it comes to spending time on money matters. And this course is not about short-term trading, it’s about finding quality stocks and just keep buying over a 30-year outlook and that age has a lot to do on how to diversify.
And also here are some of the areas that he covers, debit cards and liability, advantages of apple pay and using credit cards, how to use bank account overdraft protection, the difference between how rich and poor people deal with interest, how he makes check deposits, a system to prevent from being late on bills, big ticket item purchasing hacks, interesting ways to build credit, the best credit cards to get, lines of credit, ideas on how to create emergency funds, comparison shopping tricks, happiness hacks and how to be happy, interesting ways to perceive passive income, and a lot more; I mean, when you go over 29 hours, there’s a lot more than that.
But one thing I disagree with was when Kevin took loans against real estate to put in the stock market. If the market crashes without a recovery all that money could evaporate. And also in 4 out of the last 10 decades, the stock market was actually down when you account for inflation.
Kevin gets into a very detailed section also on M1 Finance. And he only likes to use margin in his stock account to make immediate purchases while sending money from another source. There is a lot of content on Kevin’s takeaways from stocks. There are a lot of things that Kevin and I agree on, and I’m going to basically focus on areas where we disagree.
His main take is to invest long-term into companies that you know and believe in. And I can’t say I disagree but I personally have a lot of my net worth in a hedged options portfolio. If I did not understand options very well and could not find an edge, I would most likely subscribe to the long-term investing theory, if anything, to try and hedge against inflation. But one thing I would do is not put all my money in at once. I would spread it out and allocate over time like a form of dollar cost averaging or diversification. And Kevin has mentioned the advantages of dollar cost averaging many times in the course.
His philosophy is to never hit the sell button on stocks. Kevin gets into great detail on evaluating companies fundamentally. Which means he takes the numbers like sales, revenue, costs, and all that those type of numbers into a spreadsheet. And this is used to evaluate how good or healthy a company is. And I personally believe in the efficient market hypothesis, which states that the market price for shares incorporates all the known information into that stock. And this means that the stock is accurately valued until a further event changes that evaluation. Now, Kevin believes he can look at the company’s numbers and see something that other people don’t see. Now, there are thousands of people, including professionals, that evaluate a company based on fundamental analysis. And they all have different opinions and buy and sell based on those opinions.
Just because Kevin has an opinion does not mean a combination of other opinions cannot sway the stock into a different direction into what he thinks it will go. And another problem with fundamental analysis is that what if a large owner of shares of a company dies and his wife or his son decides to liquidate the stock in the portfolio. And this is not taken into account in a fundamental analysis, but it can become a major factor in the price of a stock. In other words the price of a stock can move in opposition of its fundamental analysis and it happens every day. Even if fundamental analysis has been done, something could happen outside of the analysis to move the stock. A virus could break out breaking down the whole market including that stock. The CEO could quit, fraud could be discovered within the accounting.
The point is the price of the stock is subject to change based on news and the news or future information and is not built into the fundamental analysis. And this is just another reason that I believe fundamental analysis is flawed and I personally would not place my hard earned money into a system that I believe is flawed or doesn’t have an edge.
Also, the way Kevin does fundamental analysis is extremely intensive. He has mentioned so many variables I can’t even count. I’m guessing at least 50 variables and there’s no rules about which variables are most important and what to do with each variable and it’s overwhelming and not really actionable in any systematic way. Not only do you need to look at the variables but you also need to filter the source to make sure the quality of the information is good enough. I just have to say we disagree here. Now, the information on how SPAC works and what he goes over is very good. He put that into understandable terms and I like that.
Part one of the next sections he went over covers how to start a business. Kevin does an excellent job explaining some valuable concepts and I would recommend this for anyone interested in starting a business. He also goes over taxes. So there are areas in the course that’s like a class in taxes but the thing is it’s difficult to think of taxes in any type of organized way. Being difficult to organize, Kevin does his best but it’s just a mishmash of tax information, and he also repeats himself quite a bit when it comes to the tax area of this course.
Kevin also talks about the difference between fundamental analysis and technical analysis. So he believes fundamental analysis works with certain stocks and technical analysis works with different stocks. But it doesn’t apply both to the same stock. This philosophy is in contrast to the Humble Trader. Where she liked to combine both the fundamental analysis and technical analysis on the same stock at the same time. Now you probably already know my opinion, which is that for short-term trading neither fundamental or technical analysis actually work. Kevin spends well over 2 hours on technical analysis, and he did say he did not like certain patterns but he still went over those patterns and how they worked. And all this information is really available for free elsewhere and most of the information can be found from your broker. When you sign up for a broker most of them have pretty extensive information on technical analysis. And also there’s multiple technical analysis gurus all over Youtube to provide basic technical analysis for free.
Now towards the end of the course, Kevin gets into options and this section of the course is what I’m most interested in. Now, he keeps 95% of his portfolio long stocks. He uses 0.5% to 1% to trade short-term trades, and a lot of them are option plays. And this makes a short-term option play difficult to copy for the average guy.
Well, let’s say you have a $100,000 portfolio. This means you’d have only $500 to use if you wanted to follow Kevin’s short-term option plays. This is not enough money to copy Kevin’s short-term alerts. Even if you have $1,000,000 you would only be left with $5,000 to follow Kevin. Now Kevin is in approximately 5 to 15 short-term trades at any one time. So a $1,000,000 portfolio leaves you with about $500 per position, and Kevin is trading anywhere from $5,000 to $30,000 per position. So when he talks about making $10,000 or $20,000 dollars on a trade; by the way, I followed and documented every short-term alert from Kevin’s archives and you can see the results in my other video called Is Meet Kevin Profitable. Now back to his alerts.
If a person had a $1,000,000 portfolio that would follow him, they would be making $100 to $500 per trade. And if you only have $100,000 portfolio, just forget it. The point I’m making is that following Kevin’s short-term alert service is not actionable unless you have around $5,000,000 to $10,000,000 and most people with $5,000,000 to $10,000,000 have figured out on their own what to do with their money and are not going to follow Kevin’s short-term alert service.
Conclusion: Kevin’s short-term alert service is just Kevin having fun throwing around money and others should not follow his lead, according to Kevin himself unless they have $5,000,000 to $10,000,000 in the market. Now, this means that if you’re interested in Kevin’s alert service for short-term plays, you’re most likely not qualified to follow his trades.
When it comes to options. Kevin buys options; he likes to buy calls and I don’t think he understands that buying option premium creates a low probability position. When buying an option you need to pick the right direction, not the underlying stock. Buying this stock is similar but options provide leverage and that leverage comes at a cost. Every day you own that option, it is decaying in value. It’s like buying a new car and when you drive it off the lot, you’re down money. This means you can lose money even if you pick the right direction of the stock. Now, I have a series of videos that explain the difference between stocks and options and it’s called Stocks and Options, and I’ll leave a link in the description for that video series.
Though Kevin does his best to explain the intrinsic and extrinsic value of an option, but he falls short because extrinsic value is basically theta or time value and vega potential or volatility value, but he says extrinsic value is a benefit to him as he is a buyer of options. Now as a buyer, you’re losing money as time goes by. This time value is extrinsic value. So in effect, a buyer is typically losing money due to the extrinsic value of decaying. He makes a mistake when trying to convey the intrinsic and extrinsic value of options. He says intrinsic value is when you go to liquidate today. Intrinsic value, you liquidate at expiration. If you liquidate today, the value of the option will be the intrinsic and extrinsic value combined; unless it’s done at expiration when all the time and volatility value are gone. And he does not take into account the time of liquidation which is a key factor when defining extrinsic value.
Now Kevin is a very smart guy but he is out of his element when it comes to options. When it comes to options, I would say Kevin knows more than most beginners but has not really reached that intermediate level. He says that there is no options trade that does not carry risk and I agree. But if you’re really good and understand what trade structure to use and how to manage it then it is possible to create a system that makes money over time regardless of the market scenario.
Check out my 5-Step trade and check out my Synthetic Dragon Portfolio. I share my real P&L every month here on my channel and I’ll put a link in the description for my last real P&L video.
Now Kevin briefly goes over options liquidity, and this is a concept that is very important and needs to be gone over more thoroughly. And I created a series of videos that goes over liquidity and it’s called Stocks Versus Options and I’ve mentioned that earlier. There’s a link in the description. Kevin also talks about the dangers of options, which I agree with most of the stuff here, but one thing he says is to buy leaps long-term options contracts over a year in order to prevent long-term capital gains. Now the problem with this is that the longer you hold the option, the more it will decay. Especially, if you hold it over a year. Now this is creating a low probability trade.
Now Kevin also talks about buying options when the volatility is low based on the historical volatility chart. Now if he’s able to understand IV rank, he could be more efficient by using IV rank which is an actual more meaningful volatility comparison versus just looking at a historical volatility chart. And this is better explained for free on Tastytrade at their website, as this is the basis of their trading philosophy. And even when you understand the Tastytrade trading philosophy and you were able to trade all the well-known option structures like spreads, iron condors, butterflies, stratos, strangles, naked options, etc. I believe you are only at an intermediate options trading level. So I do recommend watching Tastytrade. It’s free and understanding it will help you get the basics down. But I was not able to consistently make money trading options until I took a course called Trading Dominion from Ron Bertino and if you’re ready to move to the highest level, I highly recommend ron’s course and I’ll leave a link in the description for the course and my review for anyone that’s interested.
Now Kevin refers to theta as a negative thing, because he refers to buying options rather than selling options. And he does not get into the fact that there’s an edge when selling option premium, because options are overpriced approximately 83% of the time. The price of options looked to predict the future price movement of the underlying stock. And the stock does not move as much as what is priced into the options. Again, approximately 83% of the time.
So he does not have a good grasp on volatility skew either. Which means that basically when the market or stock price falls the volatility or price of options increase, and when the market or price of the stock rises it causes the volatility to decrease. So this is how skew influences the price of options. The course does not cover anything actionable as far as how to use options to be a profitable trader. And I think I found one thing I do like and that was his explanation on gamma. And it’s typically difficult to kind of grasp for people that are new to options, so that was a good–he did a good job there.
Now, do I think the course was money well spent? If I was in my 20s or maybe even my 30s, I would say yes. I’d say it would be worth learning all the money hacks, getting the insight on how a multi-millionaire thinks, and just all the aspects of money that he goes over. As far as the trading aspect, there was nothing there to learn. And anything of significance that he did cover on the subject is easily available for free on Youtube. So if I was older, which I am, with more money experience and just wanted to learn about stocks or options, I would look elsewhere.
If you’re a trader looking for trading consistency, if you keep changing your approach and looking to add one more rule that will get you over the top, I’m going to help you for free. Stay with me for the next minute or so.
Now who am I to make this claim? My name is Karl Domm, Karl with a ‘K’. And it took me over 20 years to finally succeed to become a profitable options trader. I did that around 2015 and I have publicly proven to be a profitable trader since I started sharing my P&L on my Youtube channel in May of 2019.
Now my larger options trading account started with $110,000 and now is worth over $165,000. And I’m the only Youtube instructor that shares my daily P&L proving that I am a profitable options trader. Now, I’ve asked many other instructors to share their P&L, but they don’t because they can’t, because they actually lose money trading. And I’m frustrated with the lies being told. If you’ve ever taken an online trading course I’m 99% sure that you’re frustrated and that you’ve lost money following these instructors and you already know that they don’t share their P&L.
Now as far as trading myself, I just happen to have a passion for options trading, and I spent over 27 years learning and trading. And I’m not necessarily interested in the technical aspects of options from a scholastic point of view. I’ve been passionate about the most efficient way options can make me money. And this is my calling in life, as corny as that sounds, and I’ve even written a book on the subject, even though I hate writing. For some reason, trading ideas just flow into my head all the time and I take those ideas and I spend hours and hours back-testing them.
In 2017, I discovered a great course which taught me a specific trade structure which I’ve been able to mold and create specific rules around and capitalize on. But the problem is that it requires a special margin account and a lot of capital to be traded. So I set out to duplicate this trade structure in a way that could be done in a small account. And after back-testing over 300 ideas, one of the trades I developed was a trade that I call The 2060.
This is a proprietary trade I developed almost from scratch. I initially created the course to sell it. And I wanted to compete with these other Youtubers that were frustrating me with their fake claims. But what I’ve decided is I want to do what it takes to expose those Youtube fake gurus. And if I can offer something for free that is vastly superior to their paid products, maybe I could put a dent in their business which in effect would be using my talents to help people. Because of this, I’m currently providing The 2060 course at no cost. And this is a full course. It’s not a worthless free report or some piece of useless non-actionable information. This is a full course with black and white rules rules that you can use to take action and learn how profitable options traders trade. This course is worth $495, but I’m giving it away today for free. See the link in the description to sign up for the course.