Osbon Capital Management, LLC
Partner, Investment Advisor
Max Osbon, Partner of Osbon Capital Management, shares responsibility with his partner, John, for all investment decisions including security selection, allocation, and risk assessment for clients on a case-by-case custom basis. Osbon Capital is 100% owned by the Osbon family and is its sole investment vehicle.
Max earned full Osbon Capital partnership status in 2014 with the goal of building it for the next generation.
Previously, he worked for Bloomberg L.P. in NYC leading the coverage of the Goldman Sachs account. He left voluntarily after three years for a self funded six month trip in the southern hemisphere, writing neverinamerica.com along the way.
Max Osbon began contributing to Osbon Capital in 2007 as a sophomore in college, doing analysis and special projects. He proceeded by turning an internship at Bloomberg into subsequent employment and a quick advancement to a competitive sales position. A landmark event for Osbon Capital occurred when Max Osbon joined Osbon Capital as a partner in 2013.
He has a B.S. in mathematics and a B.A. in finance from Santa Clara University, graduating top in his class by number of class credits.
Max participates annually in the Wall Street Decathlon, benefiting Memorial Sloan-Kettering Cancer Research. He is a Young Partner of Boston Ballet with a focus on event planning and audience building for that organization. Previous volunteer activities have included Advisory Board member for the Design Museum of Boston, and fundraising for the Boys & Girls Club of Boston.
Max resides in the Fort Point area in Boston.
BA, BS, Finance and Mathematics , Santa Clara University
Yes, that's naked selling. If you do that, you will now be at unlimited liability, meaning you could lose more than 100%. Unless you're approved, most brokerages won't allow you to sell naked calls. There are many ruinous stories of naked call sellers losing their shirts.
You wouldn't want to sell in the money call options on your underlying because you'd be locking in a loss. With that math, you'd have to give the shares to the owner of the options at $82, not the current market value of $84.5. Yes, you'd earn the premium at $2.20/share. That means you'd get $82 + $2.20 = $84.20. So, you're looking at an immediate loss of -$.30/share. Not what you intended.
Covered call writing typically looks like this; Stock at 84.5, write calls 10-20% out of the money, so $95 or $100 strike. Earn the premium and hope the stock doesn't go up more than your strike. In 2013, lots of ETF investors were really disappointed that they capped their gains at 10-20% when their ETFs went up 30%. Personally, I'm not a fan of covered call writing, especially now when volatility is very low, you won't be compensated enough to make it interesting. I recommend reading all of Nassim Talebs books before you do anything else with options. If you don't really know what you're doing, options markets are the fastest way to lose all of your money. It's worth taking the time to study up. Maybe befriend a few institutional options traders as well. I'm a resource too.
Yes. I call it "Faux-Diversification". To get it right, aim for diversification at the underlying asset level. ETFs, Mutual Funds, Private Equity Funds, and Hedge Funds are just wrappers. What matters most is what's on the inside. Know how much you hold of US stocks versus Non US stocks. That's VERY important. I look for the split between US and Non US assets. I also look for the split between Equities, Bonds, and Alternatives. True alternatives are assets like Gold and Real Estate. Another true alternative asset is MLPs (which I don't particularly care for right now as an investment). This all goes back to the concept, "know what you own." You have to dive deep to understand what you own a fundamental level. Professionals can help show you where to look, or just do it for you.
This is a great question. There are three parts: risk-free rate of return, interest rate volatility prior to maturity, and holding a bond to maturity. The short direct answer to your question is, no. There's more to it.
Risk-free rate of return- The US Government's debt is considered to be some of the least risky debt available - companies will fail before countries - especially when that country is the largest economy in the world. When evaluating an investment, you can look for the risk-premium, how much more am I earning by taking on this risk? If an investment offers 7% and your risk-free rate (the 10 year treasury) is 2%, your risk-premium is 5%. You are earning an additional 5% by taking on risk. This is great for fixed income (bonds) and not as directly helpful in equity investing.
Interest Rate Volatility- Let's say you buy a US government bond yielding 3%. If that market yield falls to 2%, you make money on your bond. If that yield rises to 4%, you lose money on your bond. When you go to sell that bond that was yielding 3% when you bought it in a market that expects 4%, you will sell at a loss. Some people don't care because they hold bonds to maturity.
Holding to maturity- Let's say you buy a US government bond yielding 3% with a 10 year maturity. If you don't sell at any time, you don't care if interest rates rise or fall, at the end you will receive your principal back in full and you will have earned 3% per year for 10 years.
In the end, 10 years is a long time for individual investors and quite a bit will change over that time. No one is gaining extraordinary wealth through buying US Government bonds. When you factor in an inflation rate, you often barely make any money at all. Yes, the government could technically default on the bond you purchased from them, making it not actually risk-free. If that happened, there would be bigger issues to deal with.
Mutual funds allow you to invest in a basket of publicly traded securities run by an investment manager. In some rare cases they can own private placements in illiquid companies, but for the most part, they are responsible for selecting publicly traded securities, stock, bonds, etc. You can very easily buy mutual funds in a brokerage or retirement account. Fees are usually around 1%.
Hedge funds are private investment companies for accredited ($1M+ net worth) investors. Hedge funds can own anything, public securities, private securities, mines in Chile, real estate, even bitcoins, etc. You can't buy into a hedge fund via a brokerage or retirement account and most won't accept an investment of less than $250,000 to start. Most hedge funds are short term profit focused which can cause large tax bills for individual investors, when all of the gains are short term capital gains, personal tax rates are much higher. Hedge funds can be much better for institutional investors because they don't have to pay short term capital gains taxes. Fees are usually 2% on assets and 20% of performance.
A 401(k) comes from your employer. Typically, you have to pick investments from a narrow list of choices. The best ones have an employee matching program where the company will match what you put in. Always take the match, it's free money.
An IRA is completely independent. You can open them yourself for free and you can decide from thousands of securities how you would like to invest. Usually when you leave a company, you "rollover" your 401(k) into an IRA.
Both are tax-deferred retirement accounts, meaning you can invest tax-free until you take it out after age 59 1/2.