How to make lots of money...
Richard, you already know how I feel about the trading thing. Here's a different twist. I own a bunch of May FGII $30 calls. My cost basis is $3.95. Currently the bid is around $5.75. Not a bad profit. In fact, I could be very happy with it if I sold now. BUT I also have the underlying stock which has a cost basis of $30.67. Good profit there too. Again, I'd be happy if I sold and took my profit.
BUT...
I'm not going to sell either at this point because I want to make more money. Simple concept. I play poker the same way. When I have a winning hand, I DO NOT leave money on the table. I calculate my odds and weigh the risks in holding or folding. There are a lot of uncertainties in poker and the market, but I do know two things that will not change: 1) Millionaires are made by investing, not trading, and 2) Over the long run stock prices in good companies always go up.
My options are my poker hand and I am definitely gambling with them. My FGII stock is the company I own and where I work (via stock ownership) and I don't play games there. As long as we're making money and cutting new deals, why would I EVER want to sell out or quit? To be hired by some internet company?
It's the perspective I am talking about and it is radically different from many opinions expressed here and what drives the short term market. My thought is to relax, invest, and watch those 2 point gains turn into 4 point gains, into 8 point gains...
My cost basis for CDG in my retirement account in which I ALWAYS follow this philosophy is $23. In my retail account, my cost basis is $53...I tried to get cute last year and played the timing game.
And about my FGII options. Why hell, I just might hold 'em til May and trade 'em in for stock. Who knows? FGII could be $40 by then. The risk at this point, from my perspective, is leaving money on the table.
That said, I don't manage your account...and BTW, you have been advanced to permanent status. You'll receive your certificate at the party! : ) |
