Interview
Slow, Medium, and Fast Money Strategies · Cody Yeh
- Core Philosophy: Cody Yee prioritizes capital preservation as the primary goal, with growth as a secondary objective; he explicitly rejects "get rich quick" strategies and avoids high-leverage scenarios that risk total account loss.
- Three-Strategy Allocation: Yee divides his portfolio into three distinct buckets, allocating approximately one-third to each:
- Set and Done (Fast Money): An active strategy involving 30 minutes of weekly management, utilizing bull put or bear call spreads on the S&P 500 (ES futures) with strikes roughly 10% out-of-the-money to target 10–20% annual returns.
- Warren Buffett Cash Flow (Medium Money): A strategy involving selling put options on individual blue-chip stocks (market cap >$50 billion) to acquire shares at a cheaper price or generate premium income; typically uses 2-to-6-week expirations but shortens to 2 weeks currently to capitalize on high theta decay.
- Buy and Hold (Slow Money): A long-term buy-and-hold approach on undervalued stocks, which outperformed during 2023–2024 while the option strategies were neutral during the bull run.
- Risk Management Mechanics:
- Leverage Constraint: Yee strictly avoids using broker margin or leverage; for the "Set and Done" strategy, he limits maximum exposure to 50% of account capital to survive severe drawdowns (e.g., a 30% market drop).
- Selection Rules: He only trades stocks with market capitalizations of at least $50 billion, avoiding small-caps, OTC stocks, and meme stocks entirely.
- Bias Adjustment: During periods of high political uncertainty (e.g., "Liberation Day" or FOMC events), Yee reduces bullish exposure (closing partial bull put spreads to leave 25% open) and shifts toward neutral or bearish positions based on macro sentiment rather than pure technicals.
- Market Views and Forward-Looking Statements:
- Trump and Market Reset: Yee posits a 4-year presidential plan where the first year is a "reset" of the market via forced rate cuts and trade wars, the second year sees the beginning of a rebound, and the third and fourth years provide the strongest upside.
- Recession Timing: He anticipates a confirmed recession announcement from corporations in the next two months, suggesting the current market bottom has not yet formed.
- Volatility Expectations: Yee notes that as VIX doubles (e.g., from 15 to 30), option premiums increase by more than double due to gamma acceleration, allowing sellers to maintain similar premium income with wider safety buffers.
- S&P 500 Prediction: While acknowledging unpredictability, he warns the S&P 500 could drop to 5,200 but believes the current turmoil offers opportunities for the wealthy to deploy cash, while advising smaller accounts to tone down position sizing.
- Team and Process:
- Workflow Efficiency: Yee spends roughly 30 minutes per week on his active strategies because his team of 10 (analysts and coaches) handles daily monitoring, news digestion, and client support, allowing him to focus on high-level strategy.
- Stock Selection Method: Rather than independent fundamental analysis, Yee screens opportunities by analyzing the top 10 holdings of major institutional investors (e.g., Warren Buffett, Charlie Munger, Bezos, GIC) to identify companies with strong institutional conviction.
- Probability vs. Reality: Yee argues that rigid Delta or probability formulas (e.g., 75% OTM) are insufficient because they fail to account for "Black Swan" events, political shocks, and non-linear market movements during specific events.
- Performance Context:
- 2022-2024 Trends: The "Set and Done" strategy returned ~36% annually during the flat/declining market of 2021–2023, whereas the "Buy and Hold" strategy suffered during the flat period but surged 50%+ in the 2023–2024 bull run.
- Current Status: The active option strategy is currently at breakeven during the recent market correction, while Yee is using cash to accumulate buy-and-hold positions on blue chips trading near target prices.
- Historical Background:
- Origins: Yee is a former engineer from Taiwan who immigrated to Canada at 18; he began in day trading/scalping futures at age 24 after shadowing a mentor, eventually transitioning to options to reduce time commitment and increase capital efficiency.
- Early Losses: His first eight months of trading resulted in losses due to a lack of experience with news interpretation and over-reliance on technicals; he later adopted a "cash flow" mindset, learning that rich investors typically sell options to acquire assets cheaply.
- Community and Outreach: Yee hosts two YouTube channels: "Cody Yee Investing" (focused on stock/option education) and "USA Update" (focused on geopolitical and economic analysis).