5 Ways To Double Your Money with Intel

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If you’re new here, I share “buy-and-hold portfolios” that I think can double in 3-5 years. My investment philosophy is simple: Try to find the best stocks I can and let them sit for years. Incur no costs with such a portfolio, and it is simple to manage.

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Betting On Yourself

In 2007 (wow, that was 18 years ago!), Scott Adams, the Creator of Dilbert, recommended the following “general formula for success”:

I think this also applies to investing.

If you want an average successful portfolio, simply bet on index funds.

But if you want to aim for more, you have to be comfortable betting on yourself.

After all, when you pick individual stocks, you’re betting that, in aggregate, your choices will outperform the market.

So how do you bet on yourself?

Find an investing adjacent field in which you are in the top 25%.

For example:

• Bill Ackman understood both the debt and equity components of a company’s capital structure. This helped him turn around General Growth Properties through bankruptcy. And that caused the stock to go from 34 cents to a whopping $31!

• Charlie Munger understood both Human Psychology and Investing. One of his famous quotes was "If people weren't wrong so often, we wouldn't be so rich!"

• NVR, one of the best performing stocks of the past few decades, understood both options and home construction.

In my case, I’d like to think I’m in the top 25% of (a) understanding the operational challenges innovative companies face AND (b) understanding the venture capital mindset, and as a result I think that gives me an edge when Approaching Stocks Like Venture Capital.

Lately, I’ve been spending a lot of time thinking about the power of options, and I believe being in the top 25% of understanding both stocks and options can give an investor a meaningful edge. I’ll share why below.

Ok, let’s move onto Intel

Intel Investment Thesis Summary

For those who haven’t read my investment thesis, here’s the summary:

• Intel offers a rare asymmetric investment opportunity. The company's established PC and server businesses alone justify the current valuation, while the foundry division, now strategically critical to U.S. national security, represents meaningful upside optionality.

• Strong Leadership Transition: New CEO Lip-Bu Tan brings deep industry and Intel institutional knowledge plus proven execution ability. His early strategic wins already demonstrate this:

  • He has successfully secured a government partnership and equity investment after initial political headwinds.

  • He has implemented customer pre-commitment requirements for foundry investments, leveraging Intel's position as one of only three companies capable of leading-edge chip manufacturing globally.

• Strategic Market Position: Intel's foundry business benefits from unique structural advantages. With TSMC facing geopolitical risks, customers have limited alternatives for advanced manufacturing. Government backing adds credibility and financial stability, likely leading to customer adoption.

• Catalyst Potential: Initial customer orders, even small test volumes, could serve as significant stock catalysts, particularly given heightened focus on supply chain security.

If you believe the thesis, here are a few ways one could potentially double their money with Intel.

5 Ways To Bet on Intel And Double Your Money

1. Simply Buy The Stock

   • Intel’s current legacy businesses may just be worth ~$40/share on its own.

   • If the foundry is valued at just $45 billion (less than 5% of TSMC’s current market cap), that’s a double in the stock.

   • And there’s likely lots more upside if the foundry actually becomes a real contender over time.

   • This approach has little downside in my opinion.

2. Buy Longterm Calls

   • Why do this? The stock needs to appreciate far less than 100% in order for its options to double (or more).

   • Lots of choices here to pick from, but the safest are the ones with the latest expiration date, giving you the most amount of time for the thesis to play out.

   • The higher the strike you select, the higher the leverage you take on.

   • If you think that we will see test purchase orders in the near future (I bet the gov’t is “nudging” some customers as we speak), you could drastically bring in the expiration date, depending on your risk appetite.

   • Of course, the downside here is you lose 100% so you must ensure acceptable position sizing in case we’re wrong.

3. Buy A Vertical Call Spread

   • Why do this? You can structure very interesting bets which require the stock to move very little and still produce 100% returns.

   • For example, buy the $22 strike calls and sell the equivalent number of $25 strike calls expiring Jan 15 2027. These currently cost around $1.45/contract. If the stock closes above $25 in a little over a year, you stand to make over 100%.

     • Yesterday the stock closed at $24.77. Do you think it will close above $25 in 16 months? That’s less than a 1% move…

   • Again, keep in mind the downside is 100% so you must ensure acceptable position sizing.

4. Buy Both Longterm Calls & The Stock

   • This is what I’ve done.

   • I currently own both INTC stock and the Dec 2027 $35 strike calls.

   • This is a 6% bet in Coffee Can 15 (5% stock and 1% calls).

   • Why do this? The calls add, in my opinion, very safe leverage to the bet.

5. Want even safer leverage? Sell Puts & Buy Calls

   • You could sell Puts expiring in a year or two, and use that money to buy the above mentioned calls or call spreads.

   • Example:

     • Sell the $25 strike Sep 2026 puts for $4.05/contract (for a 16% yield!) and use that money (or a portion of it) to buy whichever calls or call spreads you’re interested in.

     • If the stock goes up, both your calls and puts make money.

     • If the stock ends up below $25 at expiration you will be obligated to buy the stock at $25/share. Unless something has drastically gone wrong , it’s likely the stock is still quite undervalued at those prices a year from now.

You can create some very interesting risk-reward opportunities, which can amplify returns and/or reduce your downside, if you understand the tradeoffs you’re making,

Hopefully now you can see why being in the top 25% in understanding both options AND stocks, can give an investor a meaningful edge. Such an investor can be a lot more creative in how they structure their bets.

Yes, like any field of study, options can get super complex, but they don’t need to be. Understanding the basics can get you pretty far. If you’re new to options, you can read my intro to options series here: Fun With Options.

Is There A Stock…

• You recently bought or are considering buying, OR

• Are you looking to take some risk off the table, OR

• Are you looking to repair a broken trade

Reply to this post, and I will try and share how options might help.