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To: Jill who wrote (30028)	8/21/2000 6:30:09 PM
From: RocketMan	Respond to of 35685

I'm working up a small simulation, using realistic QQQ volatility, using a random walk for year-to-year variation, and using alternate strategies. I started with the KISS strategy I discussed earlier, and got my head handed to me almost every year. Now I have a better strategy, in which I only buy CCs when the price at the end of the month is higher than my original purchase price. Otherwise, I dip into my stock account for income. I do much better, but still have some down years. Now, keep in mind that I am taking a bad (not worst) case, in which the stock is only going sideways. In such cases, one might as well do a CD. Here are some sample results. I won't repeat all the numbers, just the bottom line yearly gain/loss, using the KISS strategy and an alternate (but still simple) strategy, and not biasing this in any way. The alternate strategy is that I only do CCs during those months in which the price is higher than my original strike. Otherwise, I dip into my account for income. I am just going to put in the returns over ten (simulated) years, and have not run the model yet. The numbers will be whatever come out of the model. Here they are: Year KISS % Alternate KISS % ---- ------ ---------------- 1 -29 -23 2 -13 -40 3 30 106 4 17 67 5 -17 -15 6 38 164 7 15 36 8 15 87 9 -10 46 10 -10 33 Avg 3.6 46.1 Notice that in the KISS method you can lose big time in some years. Even with the alternate strategy, you can still lose big some years, but you have more good years. Of course, any tweaking of this from market timing, buyback, rolling up/down, etc, can minimize risk. Which, I suppose, is why McMillan can write a 500-page book on this stuff. Interestingly, the KISS approach did just about what you would get from a CD. The more I do of this, the more I understand some of V's comments, which means he is either brilliant, lucky, highly intuitive, or all of the above. Then again, maybe it really is those angels :-) Man, this is really cutting into my sailing time.