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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (2106)	8/19/2001 7:58:07 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 5205

hi Uncle Frank, Good recommendations for buy-write practitioners, but you don't address the interests of those who are writing against highly appreciated long term core holdings. i am a bit puzzled, Uncle Frank: you state that portfolio allocation is of "prime importance" (so you agree with my broader point), but then you say i don't address the interests of people whose portfolios are out of whack but who are more interested in an "opportunistic method for generating revenue during a choppy market" than in prudent portfolio allocation. i think i was clear in putting my comments in the context of a hypothetical investor with highly concentrated positions in a small number of large-cap growth stocks (the number could be arbitrarily larger, but if the asset class is the same, my point still stands). if this person's assets are in a tax-sheltered IRA, then there are no tax consequences to realizing capital gains in overweight positions and rebalancing. OTOH, if the assets are in a taxable account, selling "pseudo-naked covered calls" is a distraction from the serious issue of taxation (which is itself a distraction from the serious issue of asset allocation). i think there is a compounding of distractions here that can lead our hypothetical investor astray; hence my points. i think this hypothetical and nonexistent person has much more serious portfolio concerns than what's the best time of month to sell calls. there are lessons one can try to learn from others or many excellent books, or one can wait for Mr. Market to come to school. Mr. Market is a great teacher, as all eventually learn.