A departure

This article is outside my usual topic area — finance. I write in other areas to keep my mind sharp and my writing skills honed.

The Landlord’s Game

I suspect you never heard of the Landlord’s Game and neither had I. It was invented by Elizabeth (Lizzie) Magie in 1904. Its purpose was to bash capitalism and expose the evils of letting it run without appropriate restraints.

This game was copied by Charles Darrow who sold it Parker Brothers 30 years later under the name Monopoly. It became a huge success and Parker Brothers magnanimously paid Elizabeth $500 (and no royalties) for inventing…

The options market

The nature of the options market allows for some very confusing strategies to be used. The basics are easy to understand. Buying a put allows the buyer to get insurance against a stock dropping in price. As with any kind of insurance, you are paying someone to take a risk you don’t want to take. The buyer has the right to put (sell) the stock to the seller of the put at a given (strike) price. The insurance (the put) has a time limit — it’s only good until the expiration date. The question (to which I have no answer)…

If you’re doing anything with the stock market, spotting undervalued stocks is important. Buying and holding for the long term? Search for undervalued stocks, buy them and wait. Interested in selling puts? Best to sell the ones with the underlying stock having an upward bias. How can we design a search for these stocks?

DIY

If you want to start from scratch and develop your own program to find undervalued stocks, that avenue is certainly available to you. To do it successfully will require a lot of reading, starting with Graham and Dodd (which I read many years ago), Warren Buffett…

There’s a lot of negativity out there. Some are predicting 15% inflation is right around the corner. The stock market’s gonna tank. And the sun god Ra is coming down from the heavens any minute with doom and disaster for us all.

Also there seems to be great distrust of anything government with the disaster-predictors castigating the government for pumping money into the economy. Actual the Federal Reserve, an independent body, manages the money supply. The Fed answers to no one; not to Congress, not to the President, not even to the citizens of the United States.

With all the…

When getting involved with the stock market, the object is to make money. The question is how do we determine how much money we want to make and how do we measure if we’re reaching that goal or not.

The traditional way is to calculate return on investment (ROI) on an annual basis. When we say a stock has a 5% ROI, we mean that for every 100 dollars we invest to buy this stock, we expect to get back $5 per year. Is this traditional return on investment calculation the way we should approach and evaluate selling puts?

Investment?

Can…

Trading options involves a number of risks not associated with trading stocks. After buying or selling (short) a stock, the action is either profitable or not depending on the price movement of the stock period. With options it’s not so simple because there are other parameters affecting the value of the option. The Greeks tell a good part of the story of an option’s worth.

Option traders talk about the Greeks. They mean the Greek letters delta, theta, gamma, rho and a few others which are used to assess the risk of a particular option and effects on the current…

My take on what the experts advise.

Warning: This article assumes you know the basics of options trading. If not, I recommend you read some articles on the subject before continuing.

I recently sold my house and moved into a rental apartment. I put the bulk of my money into mutual funds (60% in an index fund), but I reserved about 2% in cash. Looking around for something profitable, I decided to look into selling puts for additional income.

Strategy overview

After a long investigation, reading blogs and watching YouTube videos, I came across the wheel strategy which sounded promising. The objective…

Here’s some information to help you decide.

Life insurance has a certain comforting ring to it, but it doesn’t truly describe what the product is. It does not insure that your life will go on. Its proper name should be death protection. It’s there to protect, not you, but those that depend on you financially should you die too soon. Can you image the salesman who says to you, “I’m here to talk about death protection.” Won’t make too many sales with that approach. So they call it life insurance.

What does dying too soon mean? In the life insurance…