Simba,
I said that I do not buy individual stocks. I also do not smoke. I used to do both in the past. Grammar, tense, etc. Is English your second language by any chance?
As for market timing, if you read my earlier SI posts, you would have known that my option strategy was mostly to buy the farthest out (by expiration and strike) CALL LEAPS the same month they would come out, once every year. Given that I started to get involved in DELL when it had a percentage growth rate far exceeding its PE, I doubt if this would qualify as market timing in a momentum stock (unless all growth stocks are momentum stocks by your definition, and all option trades market timing, even when held for two years).
Now, let me explain to you where I differ with Michael Burke. He claims to have made a lot of money while assuming very little risk, which he refuses to quantify. Given that academic literature suggests that the probability that one can successfully achieve a higher risk-adjusted return than the market index over long periods is close to zero, I think that even if Michael is an exception (because he has his own thread in SI and is therefore a genius :-)), his 90-10 (with or without market timing) is not the panacea that he claims it is. If others try to use it, they are either assuming a higher risk than the market and hence will most likely get burned badly at some point in time, or they are getting a comparable return to the market, in which case they might as well buy an index fund.
That's all.
-BGR. |
