Is Altucher’s Secret Income Worth It?

James Altucher is one of the most prolific editors at Three Founders Publishing. One of his advisory services is Altucher’s Secret Income.

It is designed to help you “build a portfolio of options that are creating income and a few stocks that have potential for enormous upside.”

In this piece, I will walk you through how the newsletter works to help you better understand what it is all about in case you are considering joining it.

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What is Altucher’s Secret Income?

Altucher’s Secret Income is an investment advisory service that is published by Three Founders Publishing and edited by James Altucher.

Altucher's Secret Income

In this publication, James reveals “instant income opportunities,” which involve trading options and buying distressed stocks.

His description of the newsletter on the Three Founders Publishing website sums up his approach:

“Altucher’s Secret Income is like nothing we’ve ever done before. Plain and simple, this is our brand-new put-selling service. With this service, we use our special filters and our extensive network in the hedge fund space to find ‘special situation’ stocks.

We find mispriced puts that we can sell. Often, investors do not price options correctly. Out of hundreds of possible options to sell on each stock, we find the ones that are MOST mispriced and we sell them to the gamblers who completely don’t understand how options are supposed to be used.”

You may be wondering, what options mispricing is and how it is even possible in heavily computerized markets.

First, the algorithms don’t come into play because most of the options market is driven by people.

Second, Options Mispricing occurs when an option becomes relatively more expensive than another options trading in the same underlying asset but with either a different exercise price or a different expiry period.

This is often caused by a volatility skew, which occurs when there is a difference between the implied volatility of two similar options. In this case, you should buy the fairly priced option (the one with the lower implied volatility) and sell the overpriced option (with higher implied volatility).

Typically, uninformed traders ignore the volatility skew and buy the cheapest options (sometimes having higher implied volatility) to give themselves more leverage – they hope that the underlying asset will have a big move that will earn them a big return.

As demand for those options rises, the implied volatility also goes up making them more expensive and they usually are effectively out of the money. This explains why many investors who don’t understand how options work lose money.

The more prudent thing to do is sell those overpriced options and buy the “at the money” options to minimize the risk (although the latter is optional).

I think these are the traders Altucher is saying you will be selling those overpriced options (puts in this case) to when you join his service. The “special situation stocks” are probably stocks that are experiencing increased volatility at the given time.

Altucher says that his strategy enables you to earn whether the market is going up, down, or remaining steady. And there is an extra step when the markets are bearish:

“And in down markets and disasters, we STILL collect the income and we get the opportunity to buy incredible companies at huge discounts to what they are ultimately worth. At that point, we may even choose to further our stake with those companies because the options will become even more grossly mispriced.”

So he recommends that you buy stocks of those companies at discount levels.

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Who is James Altucher?

James Altucher is a writer, entrepreneur, venture capitalist, and a former hedge fund manager. He has started or helped start over 20 businesses of which only three have been successful. He admits that he has learned valuable lessons from the failures.

Altucher is the author of a book called Choose Yourself that was on The Wall Street Journal’s bestseller list. In 2014, USA Today even named it in a list of the 12 best business books of all time. It was in the self-improvement category along with Dale Carnegie’s classic, How to Win Friends & Influence People.

Besides writing and starting (and running) businesses, James also hosts two podcasts: The James Altucher Show, which has been downloaded millions of times has had guests like Peter Thiel, Tony Robbins, and Mark Cuban and in the other one, Ask Altucher, James takes questions from the audience about a variety of topics.

James also shares investment insights with his audience through his newsletters, the majority of which are published by Three Founders Publishing. They include Secret Income, Top 1% Advisory, The Altucher Report, Altucher’s Investment Network, and Altucher’s Weekly AlphaBrain Alert among others.

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What are the benefits of Altucher’s Secret Income?

When you sign up for Altucher’s Secret Income, you receive:

  • Research and recommendations from Altucher concerning the best investment opportunities.
  • Updates and alerts on the model portfolio.
  • Free access to special reports and exclusive updates.
  • Unadvertised bonuses are sent over when you are a member.
  • Free subscriptions to the following e-letters: The 5 Minute Forecast and Altucher Confidential.

How much do you pay to join Newsletter Name?

A one-year subscription costs $4,000.

Does Newsletter Name have a Refund Policy?

The subscription fee is non-refundable – they don’t mention that anywhere on the website.

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Closing Remarks on Altucher’s Secret Income

Altucher’s Secret Income is a newsletter that is meant to give you access to James Altucher’s options-trading strategy. In this case, he focuses on options that are mispriced and seeks to gain a trading edge by selling puts according to how the market is performing.

He also recommends certain stocks when the market is in the red to allow you to buy them on the cheap. He publishes weekly issues of the newsletters with alerts in between whenever he deems them fit.

I think you can make money in the options market with a sound strategy and Altucher implies that he has one. I have no idea whether it works as he says and you should find out more about it before you commit to a subscription. I recommend that you learn more about options mispricing because you need to understand it to make sense of what the newsletter deals with.

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This made us 6-figures in the last 3 months:

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