Comments on: MACROECONOMICS-The Government’s Influence Over our Investment Success https://www.thebluecollarinvestor.com/macroeconomics-the-governments-influence-over-our-investment-success/ Learn how to invest by selling stock options. Thu, 05 Jan 2012 20:46:19 +0000 hourly 1 By: RECESSION- A NORMAL Part of the Business Cycle https://www.thebluecollarinvestor.com/macroeconomics-the-governments-influence-over-our-investment-success/#comment-204 Sun, 23 Nov 2008 14:48:53 +0000 /blog/?p=342#comment-204 […] horrific predicament our economy is currently experiencing. I recently wrote an article entitled MACROECONOMICS-The Government’s Influence Over our Investment Success that has received national attention from Reuters. This exposure, along with the feedback that I […]

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By: admin https://www.thebluecollarinvestor.com/macroeconomics-the-governments-influence-over-our-investment-success/#comment-203 Tue, 04 Nov 2008 19:53:16 +0000 /blog/?p=342#comment-203 Those of you following the overall tone of the market know that the volatility index is one of the criteria I look at (see above). Today the VIX hit a 1-month low which is a positive, reflecting a calming of emotions by investors. You can follow the VIX by typing in the ticker symbol $VIX. In an ideal world, we would like to see it drop below 20. Currently, it is not there yet but certainly heading in the right direction.

Alan

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By: admin https://www.thebluecollarinvestor.com/macroeconomics-the-governments-influence-over-our-investment-success/#comment-202 Mon, 03 Nov 2008 02:12:56 +0000 /blog/?p=342#comment-202 Email question from Dennis:

I saw an article in the Motley Fool that is over a year old. I saw some comments to the article later on favoring Covered Call Writing from this year. I am curious on your take of the article. Here is the article:

http://www.fool.com/investing/dividends-income/2007/07/12/stay-away-from-covered-calls.aspx

My response:

I did see this article previously as it was brought to my attention by other Blue collar Investors. Over the years, there have been other similar commentaries on cc strategies. I never tell others how to invest their hard-earned money. I simply relate how I invest mine. Bottom line….I respect other points of view and then do what works for me based on my own decisions. That being said, consider these points:

1- The article is based on a buy-and-hold portfolio. My portfolio turns over 20-80% each month based on my system criteria. If we had purchased GM (one of our country’s greatest blue-chip companies) in 1953, we would actually be losing money 55 years later. So much for buy-and-hold portfolios.

2- It references selling predominantly out-of-the-money strike prices. This is way too limiting an approach as market conditions and technical analysis may CRY for selling an in-the-money strikes.

3- It speaks to paying excessive commissions. For the educated investor who knows what he or she is doing, a discount-online broker will suffice. I pay $5.95 per trade (slightly more for options). Commissions are a NON-EVENT. Next….

4- It talks about giving up price appreciation… the first valid point. But this is the only major disadvantage of this strategy and, in my view, the positives far outweigh the one negative.

5- Regarding the Reliance example: Your calls would be exercised only if you allow this to happen. If you choose not to allow assignment, simply buy-back the option and you will still own the stock. It is possible for assignment to occur before the expiration date. This is rare but should it happen, you can simply buy back the shares (if it makes sense to do so) or use the cash for another stock. Smart investors never fall in love with a stock, just the deal.

6- Regarding taxes: I currently do my cc trading in sheltered accounts….no tax consequences at this time. If you need the cash right away, be happy to pay the tax for profits hard to generate with other strategies.

7- If an expert recommends only stocks that they don’t expect to rise dramatically for this strategy, the term “expert” should be forever expunged from their resume. If you buy a stock @ $58 and sell the $60 call, and you earn a 1-month return of 6%, who cares if the stock went to $65. I’m happy with the 6%. How would you feel?

To sum up, I suggest investors never follow the edict of one person and that includes me. This is an example of an article that comes to a strong conclusion without considering other critical elements. I have every confidence that by paper-trading the cc strategy, you will come to the right decision for your investment future.

Alan

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By: admin https://www.thebluecollarinvestor.com/macroeconomics-the-governments-influence-over-our-investment-success/#comment-201 Sun, 02 Nov 2008 07:20:04 +0000 /blog/?p=342#comment-201 Hi Dennis,

Your book was shipped yesterday to your home state of Wisconsin. It is the power of education that will make us “little guys and gals” forces to be reckoned with.

The CDs are audio only. The DVDs are filmed presentations of 4- three hour seminars I hosted along with a 1-on-1 coaching DVD where I perform my methodology in real time. The Companion Workbook contains all charts, graphs, and slides referenced in those seminars.

Welcome to our family of Blue Collar Investors and we look foward to hearing about your future successes.

Alan

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By: Dennis https://www.thebluecollarinvestor.com/macroeconomics-the-governments-influence-over-our-investment-success/#comment-200 Sun, 02 Nov 2008 06:24:05 +0000 /blog/?p=342#comment-200 Hi Alan,

I just purchased your book on this yesterday and I am looking forward to reading it. Keep up the good work by looking out for us “little guys and gals.”

I have one question though, are the CD’s for listening only or do they have graphics on them? I am trying to decide if I should get the CD’s or the DVD’s, along with the Companion Book after I read your book.

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