Value Investing

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

Original Message:
Sent: 3/17/2025 12:28:00 PM
From: ROBERT ADAMS
Subject: RE: Writing puts

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

------------------------------
Rob Adams

Original Message:
Sent: 03-15-2025 07:27
From: Vinod Nair
Subject: Writing puts

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

------------------------------
MA|Investor-NV
------------------------------

The problem I have with covered options is (1) they're taxed as ordinary income and (2) my good equities might get called away just when they're performing at their best---and then I have to pay taxes on the gain from their forced sale! And all that for relative nickels and dimes in return. No thank you!

Over the decades I've owned them, there have been many times that stocks like AAPL and MSFT would have forced such sales, and then, after incurring the taxes on whatever gains I had at the time, I would have had to try to buy back in, most likely at a higher price, if I wanted to keep them (which I did---and do). I'll keep the thousands of dollars in qualified dividends I receive from them each quarter as "consolation" for missing out on the options proceeds.

------------------------------
Rob Adams

Original Message:
Sent: 03-18-2025 10:36
From: Tom McGrath
Subject: Writing puts

Original Message:
Sent: 3/17/2025 12:28:00 PM
From: ROBERT ADAMS
Subject: RE: Writing puts

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

------------------------------
Rob Adams

Original Message:
Sent: 03-15-2025 07:27
From: Vinod Nair
Subject: Writing puts

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

------------------------------
MA|Investor-NV
------------------------------

The problem I have with covered options is (1) they're taxed as ordinary income and (2) my good equities might get called away just when they're performing at their best---and then I have to pay taxes on the gain from their forced sale! And all that for relative nickels and dimes in return. No thank you!

Over the decades I've owned them, there have been many times that stocks like AAPL and MSFT would have forced such sales, and then, after incurring the taxes on whatever gains I had at the time, I would have had to try to buy back in, most likely at a higher price, if I wanted to keep them (which I did---and do). I'll keep the thousands of dollars in qualified dividends I receive from them each quarter as "consolation" for missing out on the options proceeds.

------------------------------
Rob Adams

Original Message:
Sent: 03-18-2025 10:36
From: Tom McGrath
Subject: Writing puts

Original Message:
Sent: 3/17/2025 12:28:00 PM
From: ROBERT ADAMS
Subject: RE: Writing puts

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

------------------------------
Rob Adams

Original Message:
Sent: 03-15-2025 07:27
From: Vinod Nair
Subject: Writing puts

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

------------------------------
MA|Investor-NV
------------------------------

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

If you decide to bet against Dr Bob's wise advice on puts, you are betting against the house.

"Welcome to Hollywood. What's your dream?"

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

Hi Rob

With all the tariff and trade talks, I think the market sentiment will be negative for couple of years. In such a scenario, is there a way to protect on down slide and preserve capital. IF need arises, can one generate income when market is going down? There are some new ETFs like YMAX and YMAG. But I am not clear about how they do it and what the risks are. 

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

Vinod, I have to disagree with you that you are the house when you write puts. You are, in effect, betting against the market. To me, it's akin to any other effort to predict short-term stock movements. (Note that I firmly believe one can predict the general movement of the market---and even individual stocks---in the long run.) According to Investopedia, "Profit on put writing is limited to the premium received, yet losses can be rather substantial, should the price of the underlying stock fall below the strike price." No, you're not the house.

Yes, there is a way to protect against the downside and preserve capital in the long run. You can do that by buying and holding good assets and staying the course. The capital I had invested in MSFT, HD, LOW, AAPL and others was preserved quite well, despite the crash of 2007-2009, because I stayed the course with them. As a long-term investor, I use market downturns to buy good stocks and make tax-efficient reallocations, and that's all. 

As for YMAX and YMAG, I will stay away from them. Each is actively managed, has an expense ratio well above 1%, and has an abysmal price performance since inception. On the surface, the yields look good, but I'm pretty sure most of the distributions would be non-qualified, and when you compare the yields with the price drops, they're not so spectacular. You have to put your faith in the crystal balls of whoever runs these funds, and that's even worse than relying on your own crystal ball.

I confess that mine is a biased view, based solely on my 40+ years of involvement in the market. From where I sit, brokerages and fund managers are usually the ones who make big bucks off of complicated, opaque strategies; the clients, not so much. Of course, there are exceptions to every rule, but I like going with the rules instead of the exceptions.

Hi Rob

With all the tariff and trade talks, I think the market sentiment will be negative for couple of years. In such a scenario, is there a way to protect on down slide and preserve capital. IF need arises, can one generate income when market is going down? There are some new ETFs like YMAX and YMAG. But I am not clear about how they do it and what the risks are. 

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

Hi Rob

With all the tariff and trade talks, I think the market sentiment will be negative for couple of years. In such a scenario, is there a way to protect on down slide and preserve capital. IF need arises, can one generate income when market is going down? There are some new ETFs like YMAX and YMAG. But I am not clear about how they do it and what the risks are. 

------------------------------
MA|Investor-NV

Original Message:
Sent: 03-17-2025 12:28
From: ROBERT ADAMS
Subject: Writing puts

May I humbly suggest that you would do better to play blackjack against the house in Vegas? Why fool around with crazy strategies when a tried-and-true method of buying and holding good assets is available?

------------------------------
Rob Adams

Original Message:
Sent: 03-15-2025 07:27
From: Vinod Nair
Subject: Writing puts

I recently attended a seminar by the NY chapter by Markus of Rockwell trading about writing puts.

Though informational and educational, it feels like a very risky strategy for an individual investor. 

When you sell puts you have huge downside potential and limited return. 

In markets like last week, if you sell puts for a 5 percent premium and the market goes down by 10 percent, you would be wiped out clean, no?

I wanted to reply to the link posted by Dennis but it is view only.

That is why I am posting it here.

------------------------------
MA|Investor-NV
------------------------------