Includes inflation-indexed government bonds, farmland, Swiss francs, commodity futures, precious metals, call options on BlackBerry Ltd. stock and distressed securities (such as bonds trading at 10 per cent of par value).
Steven Quint previously worked as "an intelligence officer and defence consultant in conflict zones." He resigned those posts several years ago to become a business owner and investor.
Mr. Quint first put his portfolio into stocks. He had a specialization in insurance stocks and developed a niche analyzing the financial statements of insurance companies. However, he now believes most investors won't do well in the stock market, even if they're highly skilled and hard working. "Too much luck is involved," he declares. So, to reduce the "possibility of bad luck," he switched to a strategy of "winning by not losing."
How he invests
"My investing approach is prophylactic," Mr. Quint says. He seeks to avoid large losses by investing most of his portfolio defensively and "risking only small amounts very aggressively."
Roughly 85 per cent of his portfolio is allocated defensively to inflation-indexed government bonds, farmland, and the currencies of "financially responsible countries," such as Switzerland. The rest "is invested in high-risk, high-return situations."
An example of one of his such "high-risk, high-return situations" is call options on BlackBerry stock. The company is priced as though it will be "taken apart and sold for scrap." Yet, it is "sitting on a pile of cash, patents and a portfolio of companies … the current CEO has a track record of turn-around success … and influential investors [such as Prem Watsa, CEO of Fairfax Financial Holdings Ltd.] are supporting the company."
It was "stocking up on gold and silver in the early 2000s."
"Attempting to use margin to time the bottom of the stock-market crash in February, 2009. I almost timed it correctly. 'Almost' meant the difference between a '10 bagger' and a margin call. I got the margin call."
"The positive [stock market] returns of the last 50 years were an historical anomaly. A debt bubble drove those returns. They're unlikely to repeat. The world is in a financial mess and much wealth could be destroyed in coming years."
"One big issue with financial journalism is its bias in favour of corporate interests. Negative information is less often provided about companies. This positive slant has a tendency to push security prices in an upward direction regardless of the risks. Financial journalism is partly to blame for keeping bull markets running longer than they should."
"For all of these reasons, be defensive. Don't be a victim. Also, don't rely on financial markets to provide for your retirement. You might be disappointed."