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« Weighing the Week Ahead: Escape from the trading range? | Main | A Consumer Guide to Investment Forecasting »

October 18, 2011

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GotLife

Has worked well for me over the last two years of a full commitment to these strategies. Selling a sort term put at a price you deem a bargain gives you the same discipline of an open limit order. However, you also gain the premium that reduces your entry point and time to decide. The second factor can work to both your advantage and disadvantage but for me personally, I find the time beneficial to either execute, roll forward or allow expiration depending on all the other factors involved in any acquisition decision.

Ido138

Ant thoughts on using cash secured puts to do the buy? Seems it would generate cash and help deliver bargains.

Proteus

Actually, I hadn't thought about professional management costs vs DIY efforts, but definitely there is no free lunch in DIY. Buying Eddy's stocks year after year might give you 1% over the market with only modest effort, but more than that - selling calls has timing and liquidity concerns, so clearly that's harder.

I know a number of people that have chosen professional management over DIY - my point was more that having a complete hands-off approach right now (doing neither) seems to be the worst of all possible worlds.

oldprof

Proteus -- As you and other regular readers know, I am a big Eddy fan. Our methods for stock selection are very similar, so we have several names in common.

He publicizes more of his choices than I do!

So -- what about doing well with almost no work? For someone with your background and skill, this may be true. I try to write in a way that empowers people.

There may be others who conclude that it is a good idea, and they would rather pay a modest flat fee for professional management.

If no one drew this conclusion, I would be doing something else!

But yes -- astute investors who are willing to do some work can read my articles and generate extra returns:)

Thanks,

Jeff

Proteus

A very good strategy; improving returns and reducing volatility. I assume you have figured out which calls to sell to optimize performance.

I note Abbott Labs is also on the Crossing Wall Street buy list. I suspect one could do pretty well with almost no work by combining their buy list with your idea of selling covered calls.

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