This week we’re having a bit of a do-over. Sometime in the last year we sought to pick 5 stocks we would put into an RDP Arkenstone ETF. We may have to review and update that list in January. Today, however, we need to pick 5 stocks to build a portfolio with that will outpace the loan used to fund it.

We don’t recommend taking out a loan to invest or especially trade. Margin is cheaper anyway. Or you can use your margin to average down the total interest. Also, getting money from a bank to put into your brokerage account isn’t like running into a gas station to buy a soda.

Our ideal loan size would be $50,000, but would be okay with $25,000. $15k would work, but it would change the final two picks. Basically we need $8,100 of it for Sysco shares. For covered calls, we would consider starting with a CSP, depending on premiums."

1. SYY - Good things come from Sysco, and it’s not the dividend. A paltry $47 each quarter. Sysco is a reliable company with a bright future. Very stable, the price moves slowly and quietly This is great for writing weekly covered calls. You could write for slightly OTM for an easy $100 a week.
   
   This is definitely our safety net. If we need to sell the shares for any reason, we’ll likely make gains. If we have to take a loss, it won’t be great. On the low end of things, starting with only $15,000, half is basically blue-chipped. If your loan payments are about $400/month, your payment is 25% paid for, and we’re only 20% of the way through!
   

2. RIOT - We’re just calling it $30/share, given the volatility of this stock. Depending on where the price is at we’d write ATM or OTM. At present it’s $31.50 a share, we’d write the call at $31 strike. If the price were lower, say $28, we’d write at $28.
   
   Our ballpark for this is $100/week. It’ll likely be closer to $200, but we’re conservative when making estimations. Any surprises in the outcome will be good surprises.
   

3. ARR - $10.87/share, $0.10 monthly dividend. This REIT also has options, but the premiums are underwhelming. For $1100, you get $10 a month. That 11% is solid, but probably isn’t outpacing interest on the only loans some of us will qualify for.

   Alright so compared to the $200/week we’re already getting, this one seems more like a safety play than Sysco. All the same, it’s really a great return for the amount invested.
   
   So $8100, $3150, $1100 is what, $12,350? Thinking on it now, our picks are definitely going to change based on how much affordable loan we might receive. At $50k, for example, we could buy 100 shares of ARCH for an easy $300 call premium a week, and there’s a small dividend to boot.

   In keeping with the $15k theme, we’ll need two picks that can be scaled effectively.
   

4. LQDA - $4.13/share. Monthly shares. We have no idea what this company does, but there was some kind of ruling in their favor. There was other news and what-not, but most news has little to no impact. Even court rulings sometimes don’t really matter.
   
   We’re recommending a LEAP. Not sure if 4/14/2022 really counts, but we’ll take it. $1.90 for the $2.50 call, write the Nov 19 call for $5.00 with a $50 premium. After that you we’re approaching it as if we’ll roll the call each month for $10-20 in additional premium. So for ever $140 we get back $10 a month easy.
   
   This one we might actually sell and then re-invest the capital elsewhere if/when the price goes up significantly. If.
   

5. It’s a toss-up between TMC and PROG, both about $3.50, with weekly options. One is involved in mined minerals, the other is involved in testing fetuses for stuff. Both have had some decent volatility, though TMC has calmed down a bit.
   
   TMC’s 1/19/2024 $3 call will cost $2.33. We’re looking at $15 for easymode. So $60/month.
   
   PROG’s 1/19/2024 $2 call costs $2.33. Our first call returns $50, then $20-$30 per roll. $80-$120 a month. So for $1800 we could generate $800 a month.
   
   The thing with high volatility in penny stocks is that it often fades as quickly as it came. In our particular hypothetical, I think we go with PROG.