How To Turn $100,000 Into $48 Million

[riskarb]

Quote from Samson77:

Riskarb ... Your right bad choice of words on my part. I should have said I've been a subscriber for a few months.

I guess my real interest from the board members is to find out if anyone thinks it is possible to intermittently make 8% per month through Covered Calls if one where to be able to gauge GENERAL market direction correctly.

It seems to me that's what Steinhardt was referring to when he talked about gaining knowledge and an edge and look to make 30% annual returns not knock the ball out the park everyday.

The concept seems close .....

Any thoughts ???

No harm, I come off a bit harsh I realize, no insult intended.

Not possible to earn a *consistent* 8% monthly in CC, unless your stock picking is excellent, but then you'd be better off simply trading spec.

Stick to options-only, do not use stock. Look into convergence trades, discount arbitrage, etc... I am constained in what I can talk about publicly due to non-disclosure agreements, but read, read, read...

riskarb

 

[Hello_Dollars]

Quote from Samson77:

Riskarb ... Your right bad choice of words on my part. I should have said I've been a subscriber for a few months.

I guess my real interest from the board members is to find out if anyone thinks it is possible to intermittently make 8% per month through Covered Calls if one where to be able to gauge GENERAL market direction correctly.

It seems to me that's what Steinhardt was referring to when he talked about gaining knowledge and an edge and look to make 30% annual returns not knock the ball out the park everyday.

The concept seems close .....

Any thoughts ???

8% monthly returns on covered calls seems aggressive. But I suppose it's possible. However, Riskarb's more salient point is that a naked put is the synthetic equivalent to a CC. However, the naked put, even after setting aside the issue of lower transaction costs, presents a superior ROI to an equivalent covered call given the generally lower capital requirements involved in executing the strategy. Still, consistently attractive returns using either strategy are a lot harder to come by these days with premiums so low, as opposed to the good ol' days of VIX 30. So take any claims made by the covered call crowd promising a path to easy riches with a grain or two of salt.

 

[funky]

Quote from Samson77:

4. And then (and this is Steinhardt's edge) you put unthinkable pressure on yourself to perform and execute at this level every hour, of every day, of every week, of every month, of every quarter, of every year, for 28 straight years.

Few people are willing to play at this extreme level.

yeah that's a brilliant idea, wonder why i didn't think of it. 'unthinkable' pressure, every second of every day of the rest of my life! and to think that i was about to give up.

thanks for that great article!

:|

p.s. i also like how steinhardt drops the us currency fishhook into the water right in the middle of the conversations....slick.

 

[Samson77]

Quote from Hello_Dollars:

8% monthly returns on covered calls seems aggressive. But I suppose it's possible. However, Riskarb's more salient point is that a naked put is the synthetic equivalent to a CC. However, the naked put, even after setting aside the issue of lower transaction costs, presents a superior ROI to an equivalent covered call given the generally lower capital requirements involved in executing the strategy. Still, consistently attractive returns using either strategy are a lot harder to come by these days with premiums so low, as opposed to the good ol' days of VIX 30. So take any claims made by the covered call crowd promising a path to easy riches with a grain or two of salt.

Thanks for the input guys .... it's been awhile since I've followed option premiums, how difficult has it been to find 8% Call premiums over the last say 14 months on momentum Nas stocks?

The whole premise of this service is this.

1. Correctly Identify Market Tops and Bottoms.
2. Invest in CC's with 8% premiums (max portfolio).
3. Stay out of the water when the environment is to the downside or to volatile.

If you score say on average 8 winning months and 3 losing and your flat 1 month you net 5 x 8% = 40% AVERAGE returns annually.

Theoretically this seems doable to me .... What am I missing ?

 

[thetraderprofit]

I am always amazed at how many people will sell calls against a stock without realizing it is equivalent to selling naked puts.

RiskArb knows his stuff.

I have tried to explain this to brokers and they look at me like I am from Mars (the planet, not the chocolate company).

 

[marketsurfer]

Quote from Samson77:





1. Correctly Identify Market Tops and Bottoms.
2. Invest in CC's with 8% premiums (max portfolio).
3. Stay out of the water when the environment is to the downside or to volatile.

If you score say on average 8 winning months and 3 losing and your flat 1 month you net 5 x 8% = 40% AVERAGE returns annually.

Theoretically this seems doable to me .... What am I missing ?

the premises are flawed and contradictory. identify market top but stay out when the enviroment is to the downside ??

correctly identifying tops and bottoms is improbable on a consistent basis.

surfer

 

[Turok]

>Here is your formula for turning $100,000 into
>$48 million, Michael Steinhardt style:

>snip<

>2. And you do this at a 30% average annual
>rate every year for 28 years.

Don't know if this is your math or his, but if you start with $100,000 and average 30% per year for 28 years you will have had to spent a WHOLE LOT of money on yourself (over a hundred mil) to only end up with 48 million.

JB

 

[Samson77]

Quote from Turok:

>Here is your formula for turning $100,000 into
>$48 million, Michael Steinhardt style:

>snip<

>2. And you do this at a 30% average annual
>rate every year for 28 years.

Don't know if this is your math or his, but if you start with $100,000 and average 30% per year for 28 years you will have had to spent a WHOLE LOT of money on yourself (over a hundred mil) to only end up with 48 million.

JB

Turok it's a quote from the article (see the bottom).

I guess the difference is Steinharts fee .... lol.

If he can achieve that then I think he's worth it ......

 

[Samson77]

Quote from marketsurfer:

the premises are flawed and contradictory. identify market top but stay out when the enviroment is to the downside ??

correctly identifying tops and bottoms is improbable on a consistent basis.

surfer

Marketsufer they use Bill O'neils methods to analyis these conditions they claim that by using Oneils methods one can be accurate up to 85% in finding the tops and bottoms.

Any thoughts on that?

 

[marketsurfer]

Quote from Samson77:

Marketsufer they use Bill O'neils methods to analyis these conditions they claim that by using Oneils methods one can be accurate up to 85% in finding the tops and bottoms.

Any thoughts on that?

honestly, i am not very familiar with bill oneil. i think its his canslim method they are refering to. many traders have been very succesful with the canslim method. i am not able to comment on the accuracy figures but they seem exagerated at first glance.

surfer