Originally Posted by
Wasatch Phantom
I have no experience with the "Snider Method" but the idea of attending a seminar for a couple thousand bucks brings back an ugly memory...
I flew several trips with a former Western Captain. He was in his early fifties and hadn't saved much at all. He spent the money and attended some Wade Cook seminars on "investing". He was convinced this was going to be his ticket to financial freedom and a nice retirement lifestyle.
Wade Cook ended up going to prison and I shudder to think what happened to that Captain's finances.
For those of you that have had some success with the Snider Method, I'm happy for you and I wish you continued success.
IMHO investment performance should be measured against a standard. For example, the Standard and Poor's 500. If you're up 15% but the S&P 500 is up 30%, that's not so hot. To take that one step further, the index you use as a benchmark should have a similar risk profile as your investments.
Orvil, your statement "Thus far, I haven't had any realized losses" sounds like accounting speak.
Suppose you had $10,000 and invested $5,000 in each of two stocks. Stock A was owned for exactly one year when it was sold for a gain of 20%. Stock B on the other hand dropped 50% in that same period, but is still in your portfolio.
The portfolio is now worth $8,500 (less than you started with). But you "haven't realized any losses".
I submit you've lost 15%, whereas you could claim you've made 20% because you are only considering "realized" transactions.
Wasatch,
You bring up some valid points. Your example is a valid argument. I won't dispute it at all. This year if I had not sold covered calls using this management method, I would have had even higher returns. But, the strong feature of this trading method is in down markets. It will continue to return 10% to 12% in a flat or down market. It's tortise versus hare.
I will state that I do a little more accounting work than is generally required of this investing method. The returns that I quoted previously were actual gains, cash in hand. This is a cash flow system. There is nothing strange about it.
This is why I hate getting involved in these kinds of discussions. Buyer beware. It's self managed, self directed, takes no more risk than owning a stock or mutual fund and provides risk managment practices. Works for me and at least four or five others posting about in the last day or so.
If you don't want to do it, don't.