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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (40423)	12/22/1998 8:28:00 AM
From: Mike M2	Respond to of 132070

Shane, Myron Scholes was part of the LTCM hedge fund that the FED " helped" arrange a bailout for so I think his model needs some work . Mike

To: Shane M who wrote (40423)	12/22/1998 10:45:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Shane, B-S does calculate puts valuations also. I do not consider it a waste of time to learn about B-S. I do think it is a waste of time to use it in your investments. It is good to know it so you will have some idea why the floor guys jump on one option and avoid another. But the key to making money, IMHO, is getting the stock right, not the option. Besides, I tend to buy far out of the money, and they are always "overpriced." There are any number of software programs available that allow you to plug B-S or a modified B-S into your pc or programmable calculator. My guess is that they are on sale now with Myron Scholes using his formulae to blow up Long Term Capital Corp and almost take down the entire US financial system. <G> You should check the Learning Resources section of www.cboe.com or www.amex.com. I stick with the original B-S cumulative normal distribution as that is what my competition is using. I don't really think tweaking the model, as McMillan does, adds anything in the real world. MB