he discusses three of Cook's favorite strategies, buying splits,
CCs, and dividend capturing. He says that all three work fine in bear
markets, but are big losers in bull markets, and so they're dangerous.
But, Skousen's big thing is predicting that this bear market will go
on at least until the Dow breaks 10000, in which case Cook's methods
will work, which means we should be making 20% - 30% a month! He
mentions, but doesn't emphasize, the real problem with Cook: heavy
advertising for the way overpriced seminars.
Doug,
I think that you accidentally flipped "bear" with "bull". I don't
know about the other two strategies, but writing CCs should actually
be okay in a bear (down) market. Better than simply owning stock, at
least. Writing CCs actually performs the worst compared to stock
ownership in a big bull (up) market, when you have capped your
potential gains.
I think that 20-30%/month is unrealistic for a long period of time.
Keep in mind that if Wade had been getting just 20% a month
for three years, he could have turned $10,000 into $563 million in
just five years. At 30%/month, Wade would have turned $10K into
$68.6 Billion, or twice the wealth of Bill Gates in five years. Of
course, Wade doesn't have this kind of money, or else he wouldn't
have the need to peddle seminars and books.
Of course, maybe he actually just wants everyone to be a
billionaire like he is...
Zach |
