I am often asked about my favorite books on investing (other than my own Making 36%: Duffer's Guide to Breaking Par in the Markets Every Year, In Good Years and Bad).
Here is my list of favorites:
McMillan on Options, by Lawrence G. McMillan, (New York: John Wiley & Sons, second edition, 2004). This is generally accepted as "The Bible" on options. It is fairly expensive and the text is ponderous for most people, but everything is there.
Options Plain and Simple, by Lenny Jordan. (London: Prentice Hall, 2000). One of many books which describe just about all the option strategies with some good advice as to which ones work under which conditions. Much lighter reading than McMillan on Options.
Winning the Loser's Game, by Charles D. Ellis, (New York, McGraw-Hill, 4th Edition, 2002). While this is not about options per se, it is just about the most sensible book I have ever found that discusses stock market investments in general.
The Little Book That Beats the Market, by Joel Greenblatt, (New York, John Wiley, 2006). Again, this book is not about options, but is perhaps the best book written in the past several years about how to select individual stocks.
The Little Book of Common Sense Investing, by John C. Bogle (New York, John Wiley, 2007), Another book which is not about options, but I challenge anyone to read this book because if they do, I believe there is no way they would ever buy a mutual fund again (except a no-load broad market index fund).
Any questions? I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts.
You can see every trade made in 8 actual option portfolios conducted at Terry's Tips and learn all about the wonderful world of options by subscribing here. Why wait any longer to make this important investment in yourself? Act by January 10, 2011 and it will only cost you half our regular price.
I look forward to having you on board, and to prospering with you.
Terry
As expected, the market experienced a light week of trading during the final week of 2010. It was actually one of the lowest levels for trading volume during the year. The S&P, Dow, Nasdaq and Russell 2000 all finished the week relatively unchanged.
In spite of ongoing concerns about the state of the U.S. economy and the potential of several European countries (Ireland, Greece, Spain, Portugal ,Italy) defaulting on their debt, all four of the major indexes closed 2010 with double-digit gains. The Dow, S&P and Nasdaq closed the year higher 11%, 12.8% and 16.9%, respectively. The Dow closed the year at its highest level since August 2008.
The double-digit gains certainly do not reflect the ongoing uncertainty that occurred throughout 2010. The market plunged significantly after Greece announced it would need an emergency bailout to take care of its debt crisis. Moreover, the infamous May 6th "flash crash", moved the Dow nearly 1,000 points lower in less than twenty minutes and also caused great uncertainty following the historic event.
However, the market came back with vengeance after Federal Reserve chairman, Ben Bernanke, announced a $600 billion bond-purchasing program, known among the masses as QE2, that would attempt to lower interest rates and hopefully assist the U.S. economy. The announcement led to a historic rally in the major indices that carried throughout the rest of the year. Wall Street was also enthused in December by an extension by Congress of the Bush-era tax cuts and better than expected economic reports on unemployment, retail sales and consumer confidence.
Obviously it remains to be seen whether the advance in 2010 will last into 2011. Certainly if the market intends on extending gains it will need to see some concrete evidence regarding an improved jobs market, consumers who are more confident and willing to spend and the ability of corporations to earn more money from higher revenue rather than cost cutting.
Over the past few weeks I have mentioned the creeping trend that basically lasted throughout the month of December.
I stated that if this creeping trend continues to occur until the end of the year, then we could see a decent sell-off towards the beginning of the year. This is certainly not an uncommon event, particularly in the tech-heavy Nasdaq 100.
Again, going back over the last seven years if you purchased QQQQ on the 8th trading day of January and held until the end of the month, you would have had returns of -2.3%, -3.1%, -2.3%, -2.7%, -4.1% ,-1.6% and -7.7%. The median maximum gain during those trades was +0.7% compared to a median drawdown of -5.3%.
Andy
I've got one unit of each of the shoot portfolio entries. I'm very happy with the way these have performed, and I have set up a couple of my own using that model and those are also doing decently. Have you thought about adding more Shoot stocks? This is a winning strategy you should really be proud of and I would welcome the chance to participate in additional positions." - Eugene