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  • How To Hedge Your Long Portfolio [View article]
    Maybe.. if you know to exit before the correction starts.

    What many people don't realize that gains and losses are not symmetrical. It takes 100% gain to recover from 50% loss. if you make 10%/year 5 years in a row and then lose 50%, you are NOT back to even. You are actually down 20%+. If you lag the market by 5%/year during 5 years, but don't lose money when the market corrects 25-30%, you are FAR ahead.
    Nov 20, 2014. 02:37 PM | 2 Likes Like |Link to Comment
  • How To Hedge Your Long Portfolio [View article]
    The simple truth is that there is no one option that will always be better than the other. No strategy will work all the time. Some people don't like to sell because they have to pay taxes. Some just don't like to jump in and out of positions. Selling and re-entering is basically market timing, which might be tricky. Again, not saying it's bad, just need to consider all pros and cons.
    Nov 20, 2014. 11:25 AM | Likes Like |Link to Comment
  • How To Hedge Your Long Portfolio [View article]
    Correct. This is basically market timing. And you need to decide how much downside you are ready to tolerate. Not saying it's a bad approach.
    Nov 20, 2014. 11:22 AM | Likes Like |Link to Comment
  • How To Hedge Your Long Portfolio [View article]
    There is no one alternative that is better than others. it all comes to your personal preference and market outlook.

    Personally I like alternative #3. We implement it in our Anchor portfolio - http://bit.ly/1i9K990

    This alternative simply allows us not to to try to time the market and be hedged all the time. Of course it comes on a cost - you might not be able to be pay for the hedge all the time. In a strong bull market, you might lag the market by few percentage points per year. I'm okay with that, knowing that in a strong down years, I'm protected.
    Nov 20, 2014. 11:17 AM | Likes Like |Link to Comment
  • Visa's Rally Is Hurting The Dow [View article]
    btw, the main reasons why GOOG is not in the index is due to its price - it would take probably around 25% of the index. On the other hand, AAPL which is the biggest company in terms of market cap, would take just a small weighting with its $100 price tag.
    Nov 4, 2014. 08:43 AM | Likes Like |Link to Comment
  • Visa's Rally Is Hurting The Dow [View article]
    Excellent article and excellent explanation.

    It is reasonable that index of the 30 biggest companies is so widely watched, but most people just don't understand how flawed this index is.

    The index itself should not be changed - what should be changed is the way they weight the companies. The absolute dollar price of the stock is meaningless - the only thing that matters is the market cap.

    Imagine if AAPL was in the DOW. Its weighting after the split would become 7 times less. it's an absurd. I have a very hard time to understand why they don't change it.
    Nov 4, 2014. 12:36 AM | Likes Like |Link to Comment
  • IBM Needs To Invest In People, Products And Processes - Not Paper [View article]
    "IBM Needs To Invest In People, Products And Processes" - isn't it true for any company?
    Oct 28, 2014. 08:47 AM | 1 Like Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    If a stock goes down 40-50%, how does a 4-5% dividend help you?
    Oct 15, 2014. 03:56 PM | Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    337 comments.. unbelievable.

    Let me summarize things for you:

    There are two types of traders: those who tell you they know where the markets are going, and those who fully admit they have no idea. The truth is that both types have no idea, but the first type thinks (or wants you to believe) that they know more than you do.
    Oct 14, 2014. 02:52 PM | 3 Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    Covered calls and naked puts is basically the same strategy (same risk profile). They are both directional (bullish). They give you a slight protection if the stock declines, but only to some degree. Your loss will be smaller than just holding the stock, but if the stock goes down 20-30%, you still lose money.

    Non-directional strategies include straddles, strangles, calendars, iron condors, butterflies etc.
    Oct 12, 2014. 11:32 PM | Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    TechEnthusiast,

    There are many non-directional strategies. Some of them are long volatility (straddles, calendars), others are short volatility (iron condors). Using a mix of those strategies allows you not to be too dependent on the where volatility goes.

    Take a look at our track record to see how those strategies performed in the last 3 years - http://bit.ly/MXsvon.

    Michael,

    What you say is true in general - the problem is that during bear markets like 2000 or 2008, there is nowhere to hide. No stock was immune in 2008. So you need to be ready to big drawdowns during bear markets, or hedge, or sell at pre-set stop loss points.
    Oct 12, 2014. 11:25 PM | Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    The simple truth is that there is NO WAY to predict with any degree of accuracy what the markers will do. There are only 3 ways to be profitable in the markets:

    1. Concentrate on the long term, ignore any short term fluctuations, buy the dips. Not a bad strategy, but be ready to experience 40-50% drawdowns to your portfolio every 6-8 years.

    2. Be long and hedged all the time.

    3. Implement non-directional options strategies.

    To me, everything else is simply waste of time. Any kind of prediction is 50/50 at the best.
    Oct 12, 2014. 06:41 PM | Likes Like |Link to Comment
  • Why I Won't Be Buying Alibaba Anytime Soon [View article]
    Good article RS.

    Personally I don't touch ANYTHING related to China. Just cannot trust them.
    Oct 7, 2014. 01:50 PM | 5 Likes Like |Link to Comment
  • SteadyOptions 2014 Half Year Report: 95.3% ROI [View instapost]
    Just looked at your website. The way you trade - no wonder you think it is ABSOLUTELY IMMPOSSIBLE to make money with options.

    Here are just few of the gems on your website:

    1. You claim to be right 55% of the time. What you don't mention is the fact that if you are wrong and the stock moves in the opposite direction, your loss is probably close to 100%.

    2. You claim for average risk:reward of 1:1.20, but I don't see how this is possible.

    3. With possible losses of 100%, how much can you allocate per trade, without risking ruining your account if 4-5 straight losers happen (and please don't tell me this is not possible)?

    4. Speaking of commissions - I find it ironical that you mention impact of commissions on my returns while you trade mostly cheap spreads of 0.50-0.70 (0.29 in case of INTC). For INTC, commissions will eat 10% of the trade value, while in my case, it is only 1% on average.

    5. The returns and breakevens on your charts are completely irrelevant because they ignore the post earnings IV changes.

    6. You mention that "one can expect to make annual returns of +20-30%", but provide absolutely no explanation how you reached those numbers. What is your average return per trade? How many trades per month? What is the allocation?

    My trading is SO different from yours. I don't hold through earnings in 99% of my trades, so my maximum loss is usually limited to 10-15%, and I can allocate 10-12% per trade. I provide all the necessary information, full performance statistics, allocation guidelines etc.
    Oct 5, 2014. 10:21 AM | Likes Like |Link to Comment
  • SteadyOptions 2014 Half Year Report: 95.3% ROI [View instapost]
    Facts:

    1. You assumed in your post that 7% is an average winner, while in fact this is an average return including losers.

    2. You assumed that those are theoretical returns ("when you add tricky, merciless market maker") while in fact those are real fills.

    3. I provided you with numbers why "this thing" can and does work. Each trade is posted on the forum in REAL TIME with my screenshots of real fills. Those are not theoretical trades.

    4. Yes, commissions reduce the returns SIGNIFICANTLY, by about 2-3% per month. It is clearly stated here - http://bit.ly/UTZ1At. But the returns are still significant even after commissions. I challenge you to find holes in my performance reporting, instead of throwing baseless accusations.

    The proof is in the numbers and reviews:
    1. Our service is ranked #1 on members satisfaction, out of 700+ newsletters.
    2. The demand was so strong that I had to close it to new members - http://bit.ly/1C4chFI.
    3. Do you believe if members didn't make money, they would stay?
    But I guess you won't let the facts to confuse you..
    Oct 5, 2014. 07:32 AM | Likes Like |Link to Comment
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