Buffett Says Economy Recover Will Be Slow
Posted on 01. Mar, 2010 by Founder in Blog
Warren Buffett said over the weekend that the economy will recover but at a very slow rate and consumers are still not spending much. For those who don’t believe us telling you this time and again, maybe hearing the same thing from Buffett will make you change your trading style – i.e. stop chasing hot stocks and start making consistent winners a habit.
Buffett says the reports he receives from Berkshire’s 80 subsidiaries don’t show much improvement if any. And most of Berkshire’s businesses are still performing worse than they were two years ago before the height of the crisis. Remember folks these are mostly cash businesses not those leveraged with debt.
January Portfolio Return – 4.08%
Posted on 19. Jan, 2010 by Founder in Blog
The January portfolio return was once again extremely profitable for our members and marks the 12th consecutive month without ANY losing trades! Again that’s 1 WHOLE YEAR without any losing trades! If you want to start seeing these returns in your own account, SIGN UP HERE FOR A PREMIUM MEMBERSHIP.
Compared to the December portfolio, we had a total return that lower comparatively from December at 4.08% to 5.19%. Clearly we don’t really care if we increase or decrease our monthly returns as long as we hit our 3% profit goal – which we are beating nearly each month. In addition, we showed once again that even in the face of a major market moves higher and extreme volatility, selling options with out P.O.T.S system still produced great profits.
To re-cap this month’s income, let’s look at what we made vs. our required investments (in margin). Here are the positions we had with corresponding PROFIT/INVESTMENT and RETURN:
DIA 108 CALL – $53/$1,221 = 4.34% Return
DIA 110 CALL – $55/$1,351 = 4.07% Return
IWM 66 CALL - $30/$595 = 5.04% Return
IWM 42 PUT – $18/$419 = 4.29% Return
QQQQ 35 PUT – $6/$382 = 1.57% Return
As we said earlier, we did not have to close out any positions this month at a loss. This just goes to show everyone that by writing options, you are basically forcing the indexes to make dramatic moves in a very short time frame. And since we have positions on BOTH sides of the market (Puts and Calls), you are guaranteed to make money on at least one side of the trade every time – or both sides like we do every month.
With regard to TOTAL INCOME and RETURN, the January portfolio produced $162 of total income (double from last month) after investing just $3,968 in margin. That means we saw a total portfolio return of 4.08% this month. As we usually point out, our calculations assume that you enter just 1 (ONE) contract for each trading alert – i.e. a total of 5 contracts for the month. Those members with a higher capital base should be entering multiple contract positions each week.
***Even if you factor in a 1% comission for the month our return would still produce annualized returns of over 35% per year***
Currently we have a fully invested 2010 February income portfolio and are about to begin THIS WEEK building the March income portfolio. The outlook for both of these portfolios is extremely positive right now as we are still writing options far away from the market’s current price.
Warren Buffett Portfolio
Posted on 12. Nov, 2009 by Founder in Blog
Warren Buffett, perhaps the world’s most admired investor, said on Thursday that the financial panic that gripped the globe last year is a thing of the past, even as the U.S. economy’s struggles persist. At a business school today he said this:
“The financial panic is behind us. Our economy was sputtering, still is sputtering some.”
Buffett nevertheless said there is greater opportunity for investments inside the United States than outside, noting that the U.S. economy is far larger than any other. Buffett last week made a big bet when his company agreed to pay about $26.4 billion for a large percentage of the railroad company Burlington Northern Santa Fe Corp. So should we follow his advice…you be the judge.
Stock Market Indexes At 11-Month High
Posted on 19. Sep, 2009 by Founder in Blog
STOCK MARKET INDEXES AT 11-MONTH HIGH - U.S. stocks rose for a second week, sending the Dow Jones Industrial Average to an 11-month high, as increases in retail sales and industrial production signaled the economy is recovering. General Electric Co. and Apple Inc. advanced after the August gains at factories and retailers topped economist estimates. Dow Chemical Co. led materials companies to the biggest jump among 10 industry groups after saying it reduced a bridge loan. Verizon Communications Inc. fell the most in the Dow average after its chief executive officer said the company’s wireless business would pay down debt before declaring a dividend to its owners.
The S&P 500 rose 2.5 percent to 1,068.30. The main benchmark for American equities is up 18 percent this year after extending its rebound from a 12-year low in March to 58 percent. The Dow average added 214.79 points, or 2.2 percent, to 9.820.20, the highest close since Oct. 6. The Russell 2000 Index of small companies gained 4.1 percent to 617.88. “Most investors have been skeptical of this rally since March,” said Robert Stimpson, a money manager at Oak Associates Ltd. in Akron, Ohio, which oversees $850 million. “We’re seeing renewed interest in owning stocks again.”
Stocks also responded to comments from Warren Buffett, the billionaire who runs Berkshire Hathaway Inc., and Federal Reserve Chairman Ben S. Bernanke. Buffett, speaking at a conference in California, said Berkshire Hathaway is “buying stocks right as we speak.”
Why Isn’t Everyone Using This Strategy?
Posted on 15. Jul, 2009 by Founder in Blog
Actually there are thousands of people using this strategy right now. They are called market makers and hedge fund managers. For example, Warren Buffet uses these exact same strategies in his company. So does Pete Najarian, a panelist on the CNBC show Fast Money along with hundreds of others that trade options for a living. They and thousands of other traders and investors are using options each day to grow and protect their portfolios.
W. Buffett Uses Our Strategy
Posted on 01. Jun, 2009 by Founder in Blog
It’s absolutely true and we are going to prove it to you here. Warren Buffett is a U.S. investor, businessman, and philanthropist. He is far and away one of the most successful investors in history, the largest shareholder and C.E.O. of Berkshire Hathaway, and is currently ranked by Forbes as the richest person in the world. There is no doubt that the “Oracle of Omaha” is one of the most recognizable and trusted names in the investment world.
But, it may come as a surprise to most of you that Warren Buffett uses the exact same strategy that we use here at the Option Writer. In fact, his company Berkshire Hathaway has disclosed publicly every single quarter that they write index options for income. Here’s what they say:
“Berkshire has written equity index put option contracts on four major equity indexes including three indexes outside of the United States.”
Don’t you think that if the richest man in the world is writing options, you should be doing the exact same thing? We do. That’s why we choose to this option strategy over any other.
To prove that Warren Buffett and Berkshire Hathaway use the same option strategy, we have provided direction links to the quarterly and annual reports on the Berkshire website below:
1st Quarter 2009 Report – Page 10, Paragraph 1
2008 Annual Report – Page 45, Paragraph 2
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