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I was never impressed by the Motley Fool, even though he graduated from the same prep school in DC as I did (though he is much, much younger). The same school whose graduates include President Bush's sons and the current Vice President. No guarantee of success! Anyway, the traditional value measures will work better in the long run. I would, however, mention, particularly to Ausdauer, that one might just as well make use of all the tools of investing, including options. I often use the sale of covered calls as a CONSERVATIVE strategy designed to lock in profits. For example, if you are worried about whether this market can go up much higher, and as a consequence, whether SanDisk can move up substantially from 28 in the next couple of months, you might consider selling covered calls with a striking price of 30 and expiration date of, say, April or May. You pick a little cash on the premium, and if the stock stays where it is or goes down, you let the option expire worthless and pocket the entire cash as profit. On the other hand, if the stock moves above 30, your shares will be "called" but you still make a profit unless the stock goes so high that the difference between the $30 striking price and the market price is greater than what you got for selling the calls. Unlike buying a call, the sale of covered calls is not a gamble but a conservative strategy. Art |
