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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (12178)	12/27/2001 9:03:52 AM
From: Moominoid	Read Replies (1) \| Respond to of 74559

Jay Your NEM strategy sounds a lot like my News Corp strategy except that my long position in News is almost 14% of NAV (and much less of gross assets, being an embryonic investor I have to make it worthwhile for myself) and I currently have sold puts over twice as many shares and have been as high as three times. The rate of return so far has been very good and much much better than buying and holding the same number of News shares since I started. I wonder whether the fact that selling options forces one to constantly take profits increases the return? I can't be bothered to work out the rate of return, there are too many trades for my usual method to make much sense (i.e. I divide profits for the month on net assets at the beginning of the month), but my spreadsheets can tell me any time I update them with the prices what the absolute return to date is. I can't ever be bothered to make up imaginary portfolios. I've tried (on SI) but lose interest very fast. The problem with selling naked calls here is that if I get stuck having to sell the stock, I am not allowed to go short in this market using that method.... but I might think about it if I was sure the stock was in a downtrend. Actually the stock I now have for selling calls got bought in my first screwed up puts transaction :) So I see you think that the risk of cash is high due to likely or possible inflation. I'm not so sure I expect inflation. Deflation seems more likely still. I also sold puts on Mayne and screwed up but just rolled the position forward. Stock is now recovering. Have 18%+ of NAV in Mayne stock itself (3 times the puts). Mayne seems undervalued to me (unlike News which I wouldn't buy as an "investment"). David