Comments on Saving to Inve$t: $1000 in 1 day on Nasdaq (QQQQ) call options

I actually agree with GB that this one day profit ...

2008-10-16T14:48:00.000-04:00

I actually agree with GB that this one day profit is highly speculative. You know how there are all of these studies showing how actuve mutual fund market timers tend to underperform the broad stock market indexes.. For options and futures traders the survival ratio is about 5% after 1-3 years of active trading. In other words 95% of new options and futures traders are wiped out over time..

Just because your friend doubled his money on one trade doesn't mean he does that every day. Unless we see several years worth of activity then I would continue to be skeptical of such one day results..

Best Regards,

Dividend Growth Investor

I totally disagree with your comments about option...

2008-10-15T16:06:00.000-04:00

I totally disagree with your comments about options. If you want to play with a 1000 on QQQQ , then you are essentially going to the poker table. Options should NOT be used by anyone who does not have 6 ( or 9 ) months of liquid reserves stashed away . Also he / she should be prepared to see every one of his 1000 wiped out completely - as often happens amongst amateurs.

There's an old saying to remember -When Elephants make love, the grass gets crushed. These days, when even the big elephants on Wall St. are getting crushed, one should be very, very careful.

Keep up the good work. You write well and your posts are usually insightful

The financial media has been calling the bottom mo...

2008-10-14T10:35:00.000-04:00

The financial media has been calling the bottom month after month and have lost a lot of credibility for being consistently wrong.

We are far from the bottom. At this point stocks cannot adequately be priced because nobody knows how much the consumer is actually going to cut back, which will determine future earnings. Last quarter earnings cannot be trusted to price stocks, because future earning maybe a lot lower. So, when they say you should buy because the E/P ratio is very good, they are talking about yesterdays E/P.

Stocks are probably still way over priced, but it may take a quarter or two to adjust the E/P ratios before stocks can be prices accurately. A good strategy is to sell into the rally days like yesterday.