This is not financial advice. Do your own research. Invest what you can afford to lose.

We’re building our own insurance company by selling insurance in the stock market.

This week we sold 2 insurance policies and bought 1 for ourselves. If you want to understand the mechanics of selling and buying stock insurance, read our previous letters: Letter 2 and Letter 3.

Two weeks ago, we exited our Intel (INTC) contract because NVIDIA (NVDA) was going to report their earnings, and we wanted to avoid any negative news that could tank Intel’s stock. NVIDIA reported stellar numbers, but the stock still dropped 5%. It seems investors are no longer impressed by NVIDIA growing their revenue over 70% year over year.

The market reacted more to the war in Iran. Investors are worried the war can last longer than expected and cause oil prices and inflation to increase. All bad news for the economy.

No one knows the true impact of this war, but so far, the stock market has recovered from its drop on Tuesday.

We are back to selling insurance.

Please note: We use 1 policy to represent our deals because we want everyone to be on the same page. In practice, we might sell or buy multiple policies at a time.

On Monday, March 2, we sold a new policy on Intel when the stock was $45. We agreed to protect the buyer if Intel drops below $39. We bought our own protection at $36.

Intel needs to fall more than 13% before we’re in the danger zone.

We received a net premium of $60.68.

The maximum we can lose on this policy is $239.32.

We issued this policy with an initial return of 25.36%.

We don’t expect to keep the full 25.36% because we plan to close this policy before it expires in 43 days (April 17, 2026).

We like this policy because Intel needs to fall 13% before we’re in the danger zone. Also, the initial return of 25% is excellent. When we exit this policy early, there is a good chance we’ll end up with a return above 10%.

On Tuesday, March 3, we sold a policy on the controversial company, Super Micro Computer (SMCI). This company assembles server racks in data centers with chips from NVIDIA, Intel, AMD, and other companies in the semiconductor industry.

Super Micro had a meteoric rise from 2022 – 2024 because of the AI boom. Their stock increased from $5 to $122.

Due to a series of shady business practices, the stock has declined 75%. It now hovers around the $30 range. The lowest Super Micro has been in the last 12 months is $27.60.

We felt comfortable selling a policy that protects the investor if Super Micro falls below $26. We bought our own protection at $23.

We received a net premium of $54.68.

The maximum we can lose on this policy is $245.32.

We sold this policy when Super Micro was $30.68.

The stock needs to fall 15% before we become concerned.

We entered the Super Micro deal at an initial return of 22.29%. We will exit before the policy expires in 43 days (April 17, 2026).

Super Micro reports their earnings on May 5, after our policy expires. The major risk to our policy is Super Micro reporting something negative BEFORE their earnings date.

We like this policy because Super Micro needs to fall 6% below its lowest price in the last year before we lose money. Also, the initial return of 22% is great. We expect a double-digit return when we exit this deal.

On Wednesday, March 4, we bought a long-term insurance policy that more than doubles our money if Intel drops to $23 within the next 379 days. We plan to exit at $23.

We did this transaction by buying a put option that expires on March 19, 2027.

The policy costs us $521.32, and it helps us profit from any serious decline in Intel and the stock market. We know a big drop is coming to the market, but we don’t know when. Still, we want to make a couple dollars when it does fall.

There are companies in the semiconductor space we want to sell policies on, but they require risking more money upfront. Right now, the money we risk on each policy is in the $200-$300 range. Many of the companies on our watchlist require risking $350-$400 on each policy. When our capital grows, we might sell insurance on these companies.

Let’s continue building our own little insurance company. The goal is to make more than we pay out.

Stay strong, stay blessed, and God willing, we’ll see each other next week.

If you have any questions, don’t hesitate to email me at [email protected]

Genesis 12: A Faithful Wife: Watch Abram’s faithful journey into the Promised Land and see the unwavering devotion of Sarai, his wife, to her husband.

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