Hello everyone

Hi!

I'm very surprsed to see you saying I helped you lose money by giving you trading tips.

I've never traded options, and I'm sorry but I don't remember giving anyone tips on trading them. In fact, since I don't know anything about trading options I would find it difficult to write up a message giving advice about them; also, since my integrity is about the only strong foundation I have, I can't imagine risking damaging it by giving options trading advice. Could you repost the message in which the tips appeared? Even if it's an email message please post it, OK? In fact, anyone who cares to do searches in sowpub's archives and who can find messages by me in which I give options trading advice is asked to post an URL.

As to the question about the schedules, I'm still building the infrastructure of our business, and I'm also very undisciplined and find myself straying away from productive work way too much. But after I've identified all the components of my workday I'm going to write a daily schedule in which time is alloted to all the things that bring in money.

Please post my options advice, OK?

Best,

- Boyd

> Hi Boyd,

> it's been a long time since you gave me
> those option trading tips!! I lost a lot of
> money but still value your input. Just
> kidding about your advice but not the other
> part!! Oh, BTW, what do you make of CISCO? I
> may have to declare bankruptcy if some of
> those Jan 03 calls, with a strike price of
> $60, don't move up. Don't ask what I paid
> for the calls. I wear my hair very short
> these days and I ain't got no more nails to
> bite :-) Think we'll see a summer or fall
> rally this year??

> Your post has confused the heck out of me.
> But I would like to know. Seriously, do you
> schedule your day or week in advance. And if
> so, do you find yourself straying a lot from
> that schedule or do you find the exercise a
> very useful one for accomplishing the tasks
> you set out to do?

> I used to religiously make 'to do' list and
> found that I seldom accomplished even 50% of
> the tasks that I had written. Maybe I've got
> a discipline problem? :-)

> Regards,

> Eliz.

Hi Boyd, I and everyone who knows and has known you, know you are a man of the utmost integrity and honesty. I thought that I had put a smiley after my comment. And yes, you NEVER did give me any advice about any stock or option trading.

The truth is, I did invest very heavily in some CISCO calls (my gamble) and like many others, lost and am still losing a lot of money in them. But, that's my problem.

I just recalled that one thread over a year ago or was it longer?? on Sowpub when all the day and stock traders came out of the woodworks to add their 2 cents and it was an interesting thread as it sparked my interest.

So, Boyd, I trust my comments did not question your credibility :-)

Regards,

Eliz.

Hi,

Thanks, and I'm sorry if I made a big deal out of it. Anyway, this thread is way down the list and probably very few people read my message.

I've lost around $40,000 trading, though I still want to make trading one of my income streams.

If I could twitch my nose and make those options pay off for you I'd do it in a second.

Best,

- Boyd

Good luck Elizabeth, with your options.

I know how it feels to lose money on options since I was caught up in the drastic stock market drop in the spring of 2000...and my 'in the money options' became VERY 'out of the money options' (meaning worthless) in the blink of an eye!

Since then, I have continued my studies and have become a wee bit wiser, I think. I have made money in recent months by buying 'put' options (rather than shorting stocks since put options limit my losses) on extremely high P/E stocks...but this is a very tricky market and the wild swings are not for the faint of heart. Even the pro's are having a tough time being on the right side of a trade.

I read an article today that was very interesting.
He elaborates about the fall of the Nasdaq but thinks that the next big market to 'bubble up' may just be commodities. Hmmmm...could he be right? As he says, contrarians position themselves while no one else is looking...and then are ready to sell to the swarms of people who come 'late to the party'.

The author of this article says:
"As the NASDAQ bust evolves, it continues to be amazing that anyone remains bullish on the index. Its fundamentals are unbelievably atrocious and its technical charts are ominous. Yet, humans being humans with immense emotional inertia too great to overcome for the majority of investors, tens of millions of people are still fixated on the last great bubble, hoping it will flare up yet again in tech stocks, instead of the next great bubble, probably commodities."

The entire article is posted at the link below.
If you are interested in what he says about commodities, there is a hot link from this article which takes you to another article which builds his case for a coming bull market in commodities....raw materials.

Just some food for thought...

I am trying to stay open-minded about where the market goes from here, but it is wise to pay attention to both the bulls and the bears and to be prepared for anything. ;-)

Best wishes,
Amber




Could it be? Commodities will rise again?

Hi Amber,

So, is the market going up, or down? Bullish or bearish? One option some sophisticated investors opt for is to maintain a market neutral portfolio. The most common way, in the equity markets, is to take both long positions and short positions (through short selling) in an attempt to minimise the effect of the "market" on your returns, and increase the effect of individual security selection.

For example, you could pick 10 or 20 stocks you think will go up, and buy them, and then find 10 or 20 you think will go down and short-sell them. If all stocks go down 20%, you should lose on your long positions and gain on your short positions, thus reducing the effects of the "market" on your portfolio, and your returns should thus rely more on superior stock selection skill.

It isn't guaranteed, of course, as just because the market might go up or down 20%, it doesn't mean all stocks will follow that behaviour!

A variation on this idea is "pairs trading", where (I think) long and short positions are taken in related securities. Let's say you think McDonalds is undervalued *relative* to Burger King, you could take a long position in McDonalds and a short position in Burger King, and provided you are right in your analysis, McDonalds should go up in value *relative* to Burger King... Which is an opportunity for profit even if they are both under or overvalued. Taking positions in related companies, like McDonalds and Burger King, also helps reduce the effects of industry-specific changes.

If options are your thing, you could also try looking into using them in combination with stock positions, to hedge your investments. For example, buying shares and buying puts will protect from downside risk at the cost of some return (due to the cost of the put options).

If you want more leverage, some financial institutions have "hedged loan" products, whereby you can purchase put options and the institution will lend you a greater % of the stocks you want to borrow, because the put options cap your loss. In Australia, Tricom Equities (www.tricom.com.au) offer such a product.

So yes, if you're unsure if the market's going up, down, or sideways, perhaps consider one of the strategies above, or their many variations!

Best Regards,

Thomas Rice. :)

Disclaimer: All the above strategies have their inherent risks that you should look into if considering them. Please consult a financial advisor before implementing any of the above. This isn't investment advice, but just some ideas to explore. :)

> Good luck Elizabeth, with your options.

> I know how it feels to lose money on options
> since I was caught up in the drastic stock
> market drop in the spring of 2000...and my
> 'in the money options' became VERY 'out of
> the money options' (meaning worthless) in
> the blink of an eye! Since then, I have
> continued my studies and have become a wee
> bit wiser, I think. I have made money in
> recent months by buying 'put' options
> (rather than shorting stocks since put
> options limit my losses) on extremely high
> P/E stocks...but this is a very tricky
> market and the wild swings are not for the
> faint of heart. Even the pro's are having a
> tough time being on the right side of a
> trade.

> I read an article today that was very
> interesting.
> He elaborates about the fall of the Nasdaq
> but thinks that the next big market to
> 'bubble up' may just be commodities.
> Hmmmm...could he be right? As he says,
> contrarians position themselves while no one
> else is looking...and then are ready to sell
> to the swarms of people who come 'late to
> the party'.

> The author of this article says:
> "As the NASDAQ bust evolves, it
> continues to be amazing that anyone remains
> bullish on the index. Its fundamentals are
> unbelievably atrocious and its technical
> charts are ominous. Yet, humans being humans
> with immense emotional inertia too great to
> overcome for the majority of investors, tens
> of millions of people are still fixated on
> the last great bubble, hoping it will flare
> up yet again in tech stocks, instead of the
> next great bubble, probably
> commodities."

> The entire article is posted at the link
> below.
> If you are interested in what he says about
> commodities, there is a hot link from this
> article which takes you to another article
> which builds his case for a coming bull
> market in commodities....raw materials.

> Just some food for thought...

> I am trying to stay open-minded about where
> the market goes from here, but it is wise to
> pay attention to both the bulls and the
> bears and to be prepared for anything. ;-)

> Best wishes,
> Amber

Hi Thomas,

A few years ago, under the tutelage of some wizened market traders, I decided to make options trading on equities and indices (or speculating as it were) into one of my cash flow streams…apart from investing, just to clarify that my goal to pursue this was very different from risking long-term capital used for 'investing' where the preservation of wealth was of utmost importance.

Along with many others who learned to generate monthly cash flow by writing covered calls or trading options, I was successful (and trusting of my THEN 'never-say-bear-market' advisors) in an almost straight-up bull market of recent years, but of course, times have changed.

I have since learned much more than I ever thought I needed to know along the way through my personal experience of being caught off guard (with millions of others) when the Nasdaq took a sudden major down-draft in the spring of 2000…catching many average investors/traders unaware when several trillions of dollars were unexpectedly wiped out of the equities market... in just days.

This was a wake-up call not only to myself, but to many others who got caught long, especially, in their tech stock (with unbelievably high P/E ratios) long-term investment positions which have not even come close to recovering their old highs.

I agree with all you have said. Hedging is indeed a smart thing to do in today's market.
And, with more and more people self-directing their IRA’s, it becomes more important than ever for them to learn some of the more sophisticated hedging techniques in order to survive in this current market.

I do have an opinion about where I think that the market will move from here, but it is just that…an *opinion*. Even though I continue to study and learn, as I have for many years now, I would never consider trading or investing without ‘seasoned’ guidance…especially at this critical point in time.

I do believe that playing the market just one way…with call OR put options ONLY… is passé at this particular juncture.

Becoming more 'street smart' is something I would encourage everyone who is in control of their investments to strongly consider…even if they choose professional money management…it’s a good thing to know the views and competence of those you put in charge of your money, if you elect to do that… and are inclined to simply put your faith in the pro’s to grow it wisely. That 'faith' in the pro's doesn’t always work out, either, as evidenced by many of the mutual funds’ performance in the past two years.

I am encouraging of more education in money management...to be more savvy in what we ALL choose to do with our money, since that goes a long way in determing the choices that we have the luxury of making in all other aspects of our daily lives. But, of course, money is not everything......yet it's importance cannot be denied.

Thanks for your response Thomas...appreciate your input. :-)

Best regards,
Amber

Hi Amber, thanks for sharing your thoughts on the stock market and making me feel better about the big losses. Gee, we had it all planned. Retire at 50, buy some property on an island in the Caribbean, day trade from our home on the beach, set up a web site and do some ecommerce, visit Toronto once a year to get away from the heat. Perhapas visit sowpub once in a while and see who's doing what. Ha Ha. Fat chance. Greed and ignorance will get you every time!!

>Since then, I have continued my studies and have >become a wee bit wiser, I think. I have made >money in recent months by buying 'put' options >rather than shorting stocks since put options >limit my losses) on extremely high P/E
>stocks...but this is a very tricky market and the wild swings are not for the
>faint of heart. Even the pro's are having a >tough time being on the right side
>of a trade

Amber, you're a smart lady. Neither Charles nor I have really done much studying on stock market trends. We just plain lucked out for the first two years. Admittedly, we fall in the category that the article talks about. We often get a lot of our information from "a hype-network like CNBC." We KNOW the analysts they put on are full of personal biases for or against certain stocks and it's all like a big soap opera at times when you watch the regulars. We do research the stocks before we buy and track them for a period of time, but often it's also gut feel. However, since the Enron fiasco, we can't even trust financials any longer!!

Before the crash, we did make some money buying the occasional puts, but we no longer subscribe to any of the options' newsletters that we used to. They all seem to recommend the same buys. What we do now, since there isn't much free money to invest, is, we record the calls in our PC quote software, and watch.

I have never ventured into the commodities market. We deal with a discount broker who is strictly into equity and options trading. I haven't had a chance to read the entire article that you linked me to. But I will. I actually have always wanted to get into commodities trading and bought a course advertised on TV some ten years ago. I 'think' that I still have the material but somehow because I didn't know anyone else who knew anything about commodities, I didn't have the nerve to go it alone.

Anyway, thanks for sharing this with me. Perhaps if I have any questions about commodities, I can email you privately.

Regards,

Eliz.

Gee, we had it
> all planned. Retire at 50, buy some property
> on an island in the Caribbean, day trade
> from our home on the beach, set up a web
> site and do some ecommerce, visit Toronto
> once a year to get away from the heat.
> Perhapas visit sowpub once in a while and
> see who's doing what. Ha Ha. Fat chance.
> Greed and ignorance will get you every
> time!!