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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Poet who wrote (9855)	11/7/1999 5:02:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Poet, With regard to the discussion about trading versus investing, how would you characterize options trading? It's certainly speculative, no? Yep. But it seems to be seen here as a legitimate way to increase one's portfolio. I can't speak for anyone other than myself so I'm not sure what the consensus is. Regardless, each of us needs to act according to our own beliefs about what is best for us, not according to the consensus. If you use the term, "long-term investing," in the same context that I do, options don't fit for the simple reason that they expire too soon. Even the longest LEAPS with an expiration date 2 1/2 years out are not what I would call long-term vehicles. Though they are barely acceptable for my portfolio given an underlying stock that has hugely promising fundamentals, I still wouldn't consider any derivative an investment; it's a speculative vehicle in my mind. For those who viably argue that some of the insurance strategies help preserve capital and are thus, conservative in nature, I think the bigger point is that those insurance strategies are still short-term strategies. Having said all that, I think it's very easy for any of us to get hung up on the terminology and to get lost in the semantics. The most important issue each of us has to decide for ourselves is whether or not we want to add options and/or LEAPS to the much longer-term gorilla-gaming strategies. The factors that seem to affect that decision is our potential for accepting risk and our ability to spend the time monitoring the shorter-term strategies. I hope the folks who decide to go for those shorter-term strategies will put pencil to the paper (or keyboard to the spreadsheet) and closely evaluate the dramatically different tax consequences. Hope this helps. --Mike Buckley