Hi Mark!
Sorry for the delay in responding to you.
The whole life comparison was just to illustrate that not all insurance provides the degree of protection and safety you think you are buying.
I have McMillan's book and have read some of it....not enough to say I'm conversant....not enough to go up against the house....I've played options (buying calls and writing covered calls) for a few years.... made money, lost money.
I am relatively new to the money game....was raised poor and never worried about anything more than paying the rent....10 years ago something happened to me that illustrated clearly the price of poverty in America and I resolved to change that aspect of my life....the road of financial education has been a long one and has been largely self-taught....the only thing I had to change was everything!....started with the financial magazines for a few years until I became comfortable with some of the language....then the books started....after the intro type like the Peter Lynch books and those on Buffet, came the substance books by Graham, Murphy, Magee, Tharp....I'm still in this phase of the learning and I understand that options can play a role if thoroughly understood....what role, I don't understand yet....I will educate myself more completely on them, but until I do, they have extremely limited application for my portfolio.
I started out with so little money, that insurance premiums on it are a heavy expense that has to be weighed before spending....in my real life, I was one of those who could not afford insurance for many years, so I know that you can get by without it if you are careful....in investing, I am careful....I will take risk, but only after I research it pretty well....there are holes in my research (i.e. I don't go to the company to "see for myself"), but it seems to be thorough enough for now (but it's not that tough to look good in a bull market).
I didn't mean to make an unfair comparison....but for this average bear, I think the premiums I would pay for the options insurance wouldn't be justified because I don't know enough to buy the best-for-me policy....for now, I'll stick with doing a lot of homework, buying only those issues that meet all of my criteria, getting out quickly when they don't perform as expected, and hanging tough when the market turns negative for a spell.
Thank you so much for your time....your views are well thought-out and I appreciate reading them, they help me out a lot.
Tim |
