A Comment -- General Comments From an Expert (A Commentary)

Markets. You always follow the money – you never fight the fed. There is a recovery going on. There is positive change. This is about as good as it gets in investing. There are so many things going on and people are still very, very worried. That is a perfect bull market. This is exactly what happens at the start of a bull market. We are in a roaring bull market. The key things that drive stocks are (1) earnings – he follows S&P earnings; (2) valuation – S&P trades below historic long term average; (3) super strong balance sheets within corporations.

Options. He is always a seller of options. Buying is pretty risky.

Markets. If he has a worry, it is about the bond market – a bubble. There is always a bubble when there is easy money. We have been in a bull market for bonds for 25 years. Bottom line is that interest rates are made artificially low by the fed. Within the next year, he thinks we will get an interest rate sock in the long area. We know that with all the money that has been printed, we will get inflation. With companies, the cash flow can keep pace with inflation. A bond can never grow. The coupon is the coupon. IBM issued bonds to buy back their stock, for example.

OPTIONS: Never sell options more than one month out because you get the best premium per day. If you sell options you are harvesting money. He only writes options on blue chips. The more volatile the stock, the more premium you get. His stats average of 30 days, 3.5% out of the money, paid 3.5-4%. You should expect to make 2-4% per month.