Forget the Magnificent 7: How to Collect Monthly Paychecks From the Other 493

In complex systems engineering, the cardinal sin is creating a single point of failure.

It's the one bolt, one gear, or one line of code that, if it breaks, brings the entire machine crashing down. Many engineers spend their entire careers obsessively hunting for these weaknesses.

Wall Street, it seems, has been hiring incompetent engineers.

They have spent the last few years building the most structurally unsound market I’ve seen in my career.

They’ve taken the entire weight of the S&P 500 - trillions of dollars of global capital - and balanced it precariously on the heads of seven companies.

It’s a magnificent and breathtakingly fragile machine.
And it has a glaring single point of failure.

Yet, the very fragility of this structure creates a systemic mispricing of risk across the entire market.

Today, we’ll dissect the anatomy of this fragile market.

Then I will give you the step-by-step, actionable process for converting this systemic flaw into a reliable stream of paychecks.

You will walk away with a complete blueprint: specific stocks to target, exact strike prices, mechanical trade management rules, and portfolio allocation examples for $50K, $100K, and $250K accounts.

This is a long one. It has to be. Grab your coffee.

---

I want you to be 100% certain this is the right fit for you. So here's my promise: Join today and put the entire system to the test for a full 30 days. If you don't feel more confident and in control of your financial future, simply email me at mike@themultiplier.co, and I'll refund every penny. No questions asked.

You have nothing to lose and a lifetime of predictable income to gain.

Click above to sign up and start a 30-day trial ⬆️

---

History's Ghost: Anatomy of a Top-Heavy Market

I want you to look at a chart, which tracks concentration.

Think of it as a fever thermometer for the stock market.

For the last 40 years, every time this thermometer has spiked, a recession or a significant market correction has followed. It spiked in late 1999. It spiked before the 2008 meltdown. It spiked just before the COVID crash in 2020.

Right now, it’s spiking harder than at any point in modern history.

The chart plots a simple ratio: the value of the cap-weighted S&P 500 Index versus the S&P 500 Equal-Weight Index.

To put that in plain English, think of the S&P 500 as a sports team with 500 players. The chart compares two ways of calculating the team's score.

In an equal-weight index, every player's performance counts for exactly 1/500th of the final score. It’s the true team average.

In the cap-weighted index - the one we see on the news - the superstars' points are worth hundreds of times more than the benchwarmers'. Right now, the final score is almost entirely decided by the performance of just seven players.
The other 493 are just wearing the uniform.

Last year, the top 10 stocks in the S&P 500 accounted for a record 39% of the index's total weight.

And get this: in 2024, a staggering 81% of the stocks in the S&P 500 underperformed the index itself.

They say, "This time is different."

They point to the AI revolution as a structural shift that justifies any valuation. They claim that today’s instant, commission-free trading has created a permanent "buy the dip" mentality that will prevent any serious downturns.

This is a classic case of what psychologists call Recency Bias.
Because a strategy has worked for the last few years, people assume it will work forever.

I’ve seen this movie before, and the best historical parallel is the "Nifty Fifty" bubble of the early 1970s.

In the late 60s and early 70s, facing high inflation and economic turmoil, Wall Street fell in love with a group of about 50 large, stable, "one-decision" stocks.

You were supposed to buy them at any price and hold them forever (rings a bell?).

The list was a who's who of American industrial might: Xerox, IBM, Polaroid, Coca-Cola, McDonald's. These companies were the AI darlings of their day.

Their quality was not in question. But the belief in their invincibility became a religious mania.

At the peak, the Nifty Fifty traded at an average of 42 times earnings, more than double the market average. The justification was always the same: "Quality is worth any price."

When the brutal 1973-74 bear market hit, these "can't lose" stocks were annihilated. Polaroid fell 91%. Avon Products dropped 86%. Xerox was cut down by 71%.

It took nearly a decade, and in some cases longer, for these exceptional companies to recover their bubble-era highs.

The lesson was brutal and timeless: an exceptional company can be a terrible investment if you overpay for it.

Today's market is running the exact same script, creating a two-tiered system of a handful of richly priced darlings and the forgotten 493 others.

This structural imbalance is the foundation of the entire income play I want to show you.

So, what’s the actionable trade?

We don't short the market.
We don't buy puts on NVIDIA and pray.
Trying to time the bursting of a bubble is a fool's errand.

Remember Keynes: "The market can remain irrational longer than you can remain solvent." It’s a lesson I learned the hard way in my late 20s.

Instead of fighting the tide, we're going to use its side effects.

The immense concentration creates a powerful side effect: a "volatility echo."

When one of the AI darlings has a bad day, the whole market flinches.

Why?

Because trillions of dollars are invested in cap-weighted index funds like the SPY - an index fund is a blunt instrument.

When a giant pension fund needs to reduce its market exposure, it doesn't painstakingly sell off its individual holdings. It sells the index.

That means it is indiscriminately selling everything - the AI darling, the sleepy utility company, the boring consumer staples firm - all at once.

This forced, indiscriminate selling causes fear to spill over.
The VIX spikes.
And the option premiums on all stocks get a bump.
This is the key.

The market is charging hurricane insurance rates for homes in Nebraska because a storm is brewing off the coast of Florida.

The pricing of risk has become disconnected from the source of the risk.

This is a fundamental mispricing.

And our business here is simple: we will systematically write those overpriced insurance policies.

We will sell cash-secured put options on high-quality assets that are unrelated to the AI arms race but are benefiting from the "fear subsidy" it creates.

But we have to be relentless in choosing what we’re willing to insure.

The Execution Part 1: The Hunt for "Orphans"

Our primary job is to find the targets.

We are looking for the market's "orphans": high-quality companies left for dead while the hot money chases a handful of stocks.

This is just a screening process - we are looking for the babies thrown out with the bathwater.

Here is the simple, four-point checklist we will use to find them:

1. A Fortress Balance Sheet:

We want companies that can survive a storm, because eventually a storm will come. This means investment-grade credit, manageable debt-to-equity ratios, and a long history of positive, stable cash flow. We are looking for businesses in stable, even boring, sectors: consumer staples, healthcare, utilities, and well-capitalized financials.
These are the first places capital runs to when the party ends.

2. On Sale for No Good Reason:

We're looking for a valuation disconnect. A low Price-to-Earnings (P/E) ratio is a good starting signal. While the S&P 500's P/E is skewed into the high 20s by its expensive leaders, hundreds of its members are trading at bargain-basement multiples. Giants like Comcast (CMCSA) trade at a P/E of just 5.2. Conagra Brands (CAG), which sells the food people buy in good times and bad, trades at a P/E of 8.0.

These are absurdly low valuations for profitable, cash-gushing businesses being priced as if they're going out of style.

3. Clear Market Neglect:

We want stocks that were forgotten. These are names that have been flat or down over the past year, trading well below their 52-week highs. PepsiCo (PEP), the very definition of a defensive stalwart, recently fell to valuation levels that analysts on the Street called "way too cheap."
Why? Because it’s not an AI stock. That’s it.

That’s the entire thesis for its neglect. It's lazy, groupthink analysis, and it's our opportunity.

4. A Shareholder's Dividend:

A healthy, well-covered dividend signals financial discipline and provides a cash return on our capital if we end up owning the shares. Thanks to their stagnant prices, many of these orphans now boast yields of 4% or more, blowing the S&P 500's pathetic ~1.5% yield out of the water.

The pool of potential candidates is deep.

Let's take one as a quick case study: Verizon (VZ)

The market hates it.

The narrative is that it's a no-growth utility in a brutally competitive industry, saddled with debt from its 5G buildout. The stock has been a dog for years, a true pariah.

My first instinct, honestly, was to dismiss it too.

But let’s look at the numbers:

Let's look at it through our checklist:

• Balance Sheet: It's an investment-grade company that generates massive, predictable free cash flow, on the order of $18-20 billion a year. It's not going bankrupt.

• Valuation: It trades at a P/E ratio of around 9x earnings. That's a historic bargain for an essential service oligopoly.

• Neglect: Absolutely. The stock is nowhere near its highs. Wall Street would rather talk about flying cars than telecom infrastructure.

• Dividend: It currently yields over 6.2%. That's a massive cash payment you receive just for your patience, a yield that's fully covered by its cash flow.

Verizon is a perfect example of an orphan.
Boring, profitable, hated, and cheap.
It is a prime candidate for our insurance business.

Others that my screens consistently flag include insurer Allstate (ALL), pharma giant Bristol-Myers Squibb (BMY), and the beaten-down industrial 3M (MMM).

Once we've identified these orphans, we profit from them regardless of market direction.

The Two Win Scenarios

Scenario 1: Market stays irrational:

Mega-caps keep soaring, orphan stocks tread water. Fear we sold (put premium) evaporates via time decay. Buy back cheap or let them expire worthless. Keep premium as income. Get paid for "nothing happening"- monetizing market myopia. Paycheck #1: systematic income stream from fear.

Scenario 2: Market fever breaks.

Correction hits overvalued leaders or rotation occurs. Capital flees to safety - our "fortress balance sheet" targets. Quality orphans become new darlings (lower valuations, stable dividends).

If puts go in-the-money: (a) we collected high premiums upfront and can roll positions; (b) if assigned, we buy excellent companies at predetermined prices during panic. Get paid upfront for placing lowball limit orders that fill.
Paycheck #2: long-term capital gains plus option income.

Now, the Execution — Part 2: The Blueprint for Income

I applied the four-point checklist above within my VADER screen and produced this current watchlist.

In this section, we'll cover:
→ the concrete stocks to target
→ exact trade management strategies
→ and specific allocation examples for $50,000, $100,000, and $250,000 portfolios.

High-Quality Stock Watchlist: