Requisite’s Bryn Talkington 2022 Strategy: Energy, Covered Calls, Patience

From all-time highs, to deep dips, to high-velocity bear market rallies — Bryn Talkington’s January prediction calling for a choppy 2022 was about as accurate as it gets. But Bryn wasn’t telling you to steer clear of the market — she was telling you to pick your sectors (and your strategy) carefully.

Want Bryn’s next prediction, in person? Get up close and personal with her, Jon & Pete Najarian, and our stacked lineup of keynote speakers at RebelCon 2022. Only a few spots remain for this ultimate trading bootcamp from September 21-24 at our 5-star Dallas getaway. Lock in your spot now, before tickets sell out!

What sector has Bryn found comfort in over the past two years?

The Energy Sector

Bryn Talkington has been all over the energy trade for two years — before it was Wall-Street-cool to be overweight energy. Even during the first big market plunge of 2022, Bryn was quick to point out the relative strength in the energy sector.

“Energy continues to do well. Even on Monday when the market sold off, energy sold off — but then got a bid really quickly and came back. So I like sectors like energy — which we’ve been early on and have been overweight for two years.”

That focus on energy paid off big time. Even with the S&P 500 entering a bear market, the XLE energy sector is up more than 43% YTD, making energy the top performing sector in the S&P in 2021 & 2022.

Some of Bryn Talkington’s stock-specific picks have performed even better. Stocks like:

• Northern Oil & Gas (NOG), the fifth largest holding of Requisite Capital (+47.2% YTD)
• Viper Energy (VNOM) (+46.7% YTD)
• Exxon Mobil (XOM) (+53.8% YTD)

Market Rebellion spotted huge unusual option activity in Exxon (XOM) beginning the day Joe Biden was elected president, including massive bullish option LEAPS. Find out how much money you would have if you bought XOM LEAPS the day Joe Biden was elected.

Now that we’re halfway through the year, with energy stocks riding high, is Bryn Talkington backing off from the top sector of the past two years? No.

Covered Calls

Aside from her precise sector bet on energy, Bryn entered 2022 with a strategic focus on covered calls, something she frequently mentions when contributing on CNBC.

“As an investor, I think you still have to be defensive in your positioning. That’s why we have a lot of covered calls.”

Covered calls are a strategy that allow investors who hold at least 100 shares of a stock to lower their cost-basis and take advantage of high implied volatility in the market. For investors like Bryn Talkington, covered calls are a way to generate a little extra revenue while the market finds its direction.

Options not your style? That’s okay. Bryn has a solution:

JEPI — JPMorgan Equity Premium Income ETF

“What we’re doing is increasing our allocation to things like JEPI, which is a high-quality US equity strategy that sells covered calls to take advantage of the volatility. And then also, you collect that good income from those premiums.”

JEPI makes up nearly ⅓ (32.66%) of Requisite Capital’s holdings, and for good reason. The JEPI ETF contains a series of large cap stocks, with simultaneous short call positions sold against each one.

Essentially, JEPI seeks to allow holders to take advantage of covered call premium without actually selling covered calls. JEPI is likely to treat investors the best during periods of high volatility — like this year, where it has outperformed the S&P 500 by more than 4% year-to-date.

Being long the energy sector and collecting option premium against large-cap stocks are a great start, but both of these points won’t work without the key ingredient of Bryn Talkington’s investment strategy:

Patience

The key piece of not only Bryn Talkington’s strategy, but of any successful investor’s strategy, is usually patience. Warren Buffett once said, “The stock market is a device for transferring money from the impatient to the patient.”

And this year, with a confluence of factors that many investors have never witnessed before, Bryn thinks that patience is more important than ever. Here’s what she said in the final days of 2021 about why she thought patience would be the make or break factor for investors in 2022.

“Ultimately, all of us on the panel, our secret weapons are time and patience. And I think next year is really going to call in that secret weapon of patience. Because I do agree with Tom [Lee] that the first half of the year is going to be choppy.

I could easily think that the second half of the year is where we’re back and loaded with returns. Just don’t forget, this is a midterm year, and when you look at presidential elections, that midterm year is typically the worst of those four years.”

In short: Bryn Talkington prepared herself for this choppy year by finding opportunity in her sector-speciality — energy, as well as utilizing covered calls to buckle-in for a year that she was sure would be choppy.

Bryn Talkington: Guest Speaker at 2022’s Rebelcon, September 21-25

Think this advice could have helped you navigate 2022’s corn maze of a market? Imagine how much it would help to ask her your questions, live. This September, less than a month from the time this writing, Requisite Capital’s Bryn Talkington will be one of many guests of finance-fame at Market Rebellion’s annual RebelCon. The event will be held in Dallas, Texas on September 21-25, and will feature a star-studded guest list, including Tom Lee, Mark Newton, Jordan Freed, Jon & Pete Najarian and more.

But you don’t have to travel to Dallas to get Bryn’s unfiltered, uncut take on the stock market — because as of this writing, there’s still time to secure virtual tickets for Rebelcon.

Eager to get up close and personal? Market Rebellion still has a limited quantity of in-person tickets left. Follow this link to lock in your spot, virtually or in-person, for the chance to catch live insights from Bryn Talkington, Jon Najarian, Tom Lee, and many more!