Saturday, July 24, 2021

Warren Buffett's - Ground Rules - Audiobook

If you consider yourself an investor, or have written"become an investor" on your list of life time goals..... you owe it to yourself to read and/or listen to some of Warren Buffett's materials. Above is a link to a book written about his investment style entitled "Warren Buffett's Ground Rules by Jeremy C. Miller. It is an audio book easily accessible for free on youtube. If the link does not work for you, I would encourage simply to search up another link on youtube for a free audio video of this book.

It never ceases to amaze me, how much fabulous information and resources are available for nothing more than the cost of a wifi connection to bring into your world, some of the world's best minds and opportunities.

Even if your style doesn't jive with Mr.'s always helpful to stretch your mind to understand where other investors are coming from. You want to understand the "competition". You want to learn as much as you can from those who are going before you....especially from those who have been as successful as Mr. Buffett.

May God bless your learning, your seeking .....and your understanding.


Sunday, July 11, 2021

Sometimes You Need To Leave Your Bedroom Town

Yes, we live in a bedroom town. It's gorgeous...with lakeside nearby, and countless recreational opportunities for those who love the water and hiking and sports.  The pandemic is slowly shifting into our rearview mirror as we come out of our caves and emotional "lockdowns" to  begin making plans again to live more fully.

What I wanted to talk about today was simply this.... I notice that many folks across North America are in a career "flux" mode.  It has been documented by various news media, that a large percentage of America is ready to leave their jobs in search of fairer pastures, or has already quit, with the anticipation to 
carve out a new work life balance or create a whole new "career animal".

What is a bedroom town? It's basically a "safe" place to live which becomes the place you raise your kids in, but not necessarily the place where you work. It becomes a place full of suburban towns, but not great career opportunities.

I am surrounded by families in my neighborhood that have not yet come to the realization that we live in a bedroom town. They try to eke out a living from local side hustles...and wonder why it is so hard to make ends meet. These are the families that wind up selling their homes. They just can't admit to themselves that such a pretty town can not support their career aspirations. That's the kicker. Pretty towns are pretty places to live....not necessarily the optimal places to work.  

In all honesty, it can be quite a harsh wake up call, to realize that you really can't work and live in the same location. To admit that you need to travel to a new postal code to find work, can be quite upsetting to those who love to snuggle in and stay in their comfortable and familiar home neighborhood.

But like a true nomad, like those before us who "followed the buffalo"  to hunt and provide for the tribe, somtimes we too must learn how to go where the "eatin' is good". We sometimes have to be willing to get out of town to find greener pastures. The pandemic made many of us into "home bodies" and now it's getting time to shake that lifestyle off. It's time to get back on the horse and make some epic stuff happen.

Bedroom towns are great for relaxation, especially if you have access to a water front, where you can dip your toes in the beach sand and watch the sunlight dance on the waves. But, sometimes we need to put on our "big girl pants" and realize that the sunlight is not paying us to play...unless of course we are going to open a lakeside hotel or a bed and breakfast. Yes, the hospitality industry will recover well in my city....but  many other industries are not quite so lucky. 

Zoom meetings do not create the "buzz"....the motivational "umph" that makes a career hum with momentum. Sometimes you need to move to where the action is.  Facebook founder Steve Zuckerberg uprooted his startup and moved it  to California, to be where the "action" was. Creating the right corporate buzz is really important to attract and retain the right workers and create an epic corporate culture.

Bedroom towns can be beautiful for corporate retreats, weddings, and other recreational activities, but they just might not be your ideal place to "git er done". I love the quote of Michelle Romanow, who stated" You don't need an MBA degree to succeed, you need a "Get Sh*t Done" degree"... 

It isn't that you can't create buzz where ever you are....but it's harder in some locations. Vacation towns have a certain "slow-ish" pace that the tourists adore...but the locals must resist the lull of such luxurious pace if they are to keep up in the "big cities" with the "big city high speed" decision makers.

I am not trying to tell you not to live in a bedroom town or a gorgeous vacation town, but I am trying to help you understand that if you are not ready to slow down and retire, you are going to have to fight to fan the fires of entrepreneurial vigor and vim. You might just have to drive into the bigger cities on a regular basis, to stay relevant and keep vital connections alive.

Don't give up, my friends. God has a reason for your ambition....take care to nurture it and not let it grow stale....whatever it takes. He gave it to you.


Thursday, June 10, 2021

Why do Traders Like Selling Naked Puts?

So, why is it that some traders just love selling those naked puts?

Is it because they can just put in a "bid" to buy a stock that they have wanted for quite some time and "fix" the price that they are willing to pay for said stock?

Is it because selling a naked put uses up buying power but does not incur interest fees unless the naked put gets assigned?

Is it because traders just love that process of lowering their cost basis for stocks they want to own?

Do traders use the process of "selling naked puts" for income or merely for lowering their cost basis?

Can you make a "living" simply from selling naked puts?

How much money do you need to begin selling a naked put?

Do you need to understand the loan value of a stock before trading options?

If some of the above questions are things that have crossed your mind in your trading are not alone. There is a lot to learn about options, and the implications can be a great blessing or they can turn into a great liability.

Selling naked puts .....puts you "on the hook" to buy whatever stock you have sold those puts on.
Always remember  that just ONE contract of a put option represent the potential purchase of
ONE HUNDRED shares of the underlying stock. 

Sometimes I feel that these "no commission" trading platforms entice traders to play with option even when they simply are too "new" and "inexperienced" to understand the risks involved in option trading. They don't understand what devastation they can cause to their own financial health with just the click of a cute colorful icon on a trading platform. The platform is collecting their "cut", whether the newbie trader wins or loses. But the newbie trader, full of vim and vigor, can wind up bankrupt if they do not learn the ins and outs of options trading before they participate fully in the options market.

Trading options usually requires a "higher level" of "authorization" from your broker because you need an account that has "margin" approved and your broker should not be giving you access to option trading if you don't understand the basics of options trading. However, people do fall through the proverbial cracks and wind up trading options that they do not completely grasp. It has also become apparent over the past year or two that, newbie traders are sometimes being given access to massive leverage on these margin accounts, even with little to no apparent knowledge of the stock market or especially, little to no comprehension of the options market.

Be prepared kids, for getting assigned...because it does happen....just when you least expect it.
If you and your accounts can not handle getting assigned on a "naked put" position, you need to rethink your strategy, and/or hedge against that possibility. Or, only trade with the strategies that you understand to be "safe". Learn how to protect yourself, your money, your accounts, your incomes, and your credit rating. It is vital to your well being and livelihood.

Options are not for newbies. In my humble opinion, you should do a bunch of reading and take some or "a lot" of tutorials/seminars in option trading before you start really small, with low cost stock and with a very small number of in "one" contract.....until you really start understanding what options are and what risks they hold. Everyone has a different learning curve and ability to absorb new information. Don't be intimidated by those "young" traders you may see on youtube or other social media platforms, who claim to have learned these skills in a couple of months. It may actually take a few years to fully understand options. We all learn at different paces. It is possible that you may figure out that options trading is too complex and therefore too risky for you to implement. There is no shame in walking away from a strategy that is not suitable to your personality or temperament. We all need to play the games we understand....the trick is to admit to ourselves which games we understand...and stay happily in those arenas.

I value having a good night's sleep. Trading beyond your comfort zone and beyond your level of knowledge is a sure recipe for sleep loss. Protect yourself, your sanity and manage stress. Playing options with too much risk on the table is a nightmare. Don't do that too yourself. 

Now, here's the good part. Option trading can become an important part of your trading/investing strategy if you educate yourself well in advance. Option trading can help you even if you are predominantly a long term investor. It can help you augment your returns and/or limit your downside. Profit is always a good thing. Well, that's all for now. I hope you gleaned something of value from my chat.

Wishing you much success in your investing and trading.