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Pastimes : Tidbits -- Ignore unavailable to you. Want to Upgrade?

To: Clappy who wrote (738)	7/26/2000 7:47:07 AM
From: edamo	Read Replies (1) \| Respond to of 1115

clappy....."initial strategy" i always held to the belief that the only way to constantly build a portfolio is by adding cash. this can be done out of pocket or by selling puts and calls. long term i risked the proverbial "ten baggers"...which never existed prior to the last five years.....guess you don't miss what you never had! instead of going long, i would sell puts in the issues i desire and have the capacity to own. worse case i own them at a discount to the current market, and if assigned, i'm actually in a profit or less loss then if owning the common from day one! if the stock advances i keep the premium....many will argue loss of opportunity, by not being long....but on a strongly surging issue, say as qcom 1999...you can follow it up, capturing premiums, and get about the same gain as the long common without ever owning it. qcom is the perfect example of a fast moving stock....many longs were decimated. as far as buying calls, i'm not an advocate of dotm, as i consider it a gamble....the odds are against you, although the last five years did skew the odds....the question is will the future afford the "luck" of the past? i would buy itm,atm, and slightly otm in issues that i want to own....intc a good example...bought slight otm a few years back, the stock doubled, split, sold half the options and used the proceeds to exercise the other half... set a goal on any investment you make...understand why you are entering the position, what you expect, and identify the nearest exit.....preservation of capital is primary. cash accrues quickly....3% per month return on cash will double your cash every two years......keep strategies simple, they are easier to monitor and to exit. be conservative, don't gamble.....it's a long term plan.... take profits off the table, expand your investments beyond the market into tangibles that you can benefit from... good luck...ed a.