Bernie Schaffer's Option Advisor

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Bernie Schaffer's Option Advisor

Postby caaaad » Mon Jul 26, 2010 5:14 pm

What do you think about this as a way to make some extra dough and increase the return on your portfolio? I have been following it through a six month trial subscription and it looks legit. Any thoughts or is this out of bounds
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Postby grok87 » Mon Jul 26, 2010 5:33 pm

Options trading is generally a bad idea-high turnover costs, tax inefficent way to invest in equities. Leaps may be an exception (as advocated by Bodie and Taleb). This article doesn't think to highly of Schaeffer.
http://www.marketwatch.com/m/story/4867 ... Pages=True

What exactly is his newsletter telling you to do? Can you give an example or three?
Cheers,
Last edited by grok87 on Mon Jul 26, 2010 9:22 pm, edited 1 time in total.
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Postby caaaad » Mon Jul 26, 2010 5:42 pm

This is the Option Advisor hotline update for Thursday, July 22, 2010 with the picks contained in the August edition of the Option Advisor newsletter. Our next hotline update is scheduled for Monday, July 26, 2010 at 7:30 p.m. Eastern Time.

AS OF TONIGHT'S CLOSE, IN THE AGGRESSIVE PORTFOLIO, 86% WAS ALLOCATED TO CASH AND 14% WAS ALLOCATED TO OPEN POSITIONS. IN THE PUT SELLING PORTFOLIO, 88% WAS ALLOCATED TO CASH AND 12% WAS ALLOCATED TO OPEN POSITIONS.

In the Aggressive portfolio, invest a total of 30 percent of your entire cash reserves allocated to the Aggressive portfolio into the six new recommendations as follows (equal dollars in each):

Buy the Currency Shares Euro Trust (FXE) September 18, 2010 120-strike call. The maximum entry price is $9.20, the target profit is 100% and the closeout date is August 17, 2010.

Buy the Fifth Third Bancorp (FITB) September 18, 2010 10-strike call. The maximum entry price is $2.90, the target profit is 100% and the closeout date is August 17, 2010.

Buy the Aruba Networks (ARUN) October 16, 2010 14-strike call. The maximum entry price is $3.50, the target profit is 100% and the closeout date is August 31, 2010.

Buy the Diamond Offshore (DO) September 18, 2010 75-strike put. The maximum entry price is $14.00, the target profit is 100% and the closeout date is August 17, 2010.

Buy the Ebay (EBAY) October 16, 2010 24-strike put. The maximum entry price is $3.60, the target profit is 100% and the closeout date is August 31, 2010.

Buy the Atheros Communications (ATHR) September 18, 2010 34-strike put. The maximum entry price is $5.90, the target profit is 100% and the closeout date is August 17, 2010.

Also, in the Put Selling portfolio, invest 30% of your cash reserves allocated to the Put Selling portfolio (equal dollars in each) into the four new recommendations as follows:

Sell the F5 Networks (FFIV) August 21, 2010 75-strike put. The minimum entry price is $1.00, the target profit is 10.8%, and the closeout date is August 20, 2010.

Sell the Lululemon Athletica (LULU) August 21, 2010 35-strike put. The minimum entry price is $0.40, the target profit is 10.3%, and the closeout date is August 20, 2010.

Sell the Life Time Fitness (LTM) August 21, 2010 30-strike put. The minimum entry price is $0.35, the target profit is 10.4%, and the closeout date is August 20, 2010.

Buy the Riverbed Technology (RVBD) September 18, 2010 25-strike call/Seagate Technology (STX) September 18, 2010 17-strike put pair trade. The maximum entry price to enter the Riverbed Technology (RVBD) call is $7.40. The maximum entry price to enter the Seagate Technology (STX) put is $4.10. The target profit is 50% and the closeout date is September 14, 2010.


Our next scheduled hotline update will be Monday, July 26, 2010 at 7:30 p.m. Eastern Time. Thank you for visiting the Option Advisor hotline and have a good evening.
RETURN TO PORTFOLIO

Last Updated on 7/22/2010 Print



*If you are buying to open a new position, "MEP" stands for "Maximum Entry Price." If you are selling to open a new position, “MEP” stands for “Minimum Entry Price." By heeding the MEP, you avoid establishing positions in options that have already made a significant move, which reduces the profit potential below an acceptable level.




Option Advisor Hotlines for July 2010
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Re: Bernie Schaffer's Option Advisor

Postby Taylor Larimore » Mon Jul 26, 2010 5:52 pm

Hi caaaad:

caaaad wrote:What do you think about this as a way to make some extra dough and increase the return on your portfolio? I have been following it through a six month trial subscription and it looks legit. Any thoughts or is this out of bounds


Every financial newsletter solicitation looks "legit." I never read one whose portfolio and market timing system did not "beat the market." :lol:

Mark Hulbert has been tracking the investment performance of Mr. Shaffer's Aggressive Portfolio since 1982. As of 12-31-2009, this portfolio had an annualized return of (-20.0%). Meanwhile the Total Stock Market Index returned +10.6%.

A second Put Selling Portfolio has been tracked since 1996. As of 12-31-2009, this portfolio had an annualized return of +2.3%. Meanwhile the Total Stock Market returned +5.3%.

Save the subscription money, your time, and your investments.
"Simplicity is the master key to financial success." -- Jack Bogle
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Postby caaaad » Mon Jul 26, 2010 5:56 pm

Haha Thanks Taylor. They sure are good sales people. I thought it was interesting but I think I like your 4 fund simplicity.
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Re: Bernie Schaffer's Option Advisor

Postby Avo » Mon Jul 26, 2010 6:39 pm

Taylor Larimore wrote:Mark Hulbert has been tracking the investment performance of Mr. Shaffer's Aggressive Portfolio since 1982. As of 12-31-2009, this portfolio had an annualized return of (-20.0%).

That's hilarious. If you started with a million dollars at the beginning of 1982, at the end of 2009 you would have two thousand four hundred seventeen dollars and eighty-five cents.
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Postby fredflinstone » Mon Jul 26, 2010 7:19 pm

"As of 12-31-2009, this portfolio had an annualized return of (-20.0%)..." Sounds like Mr. Shaffer's newsletter has quite a bit of value--as a contrary indicator. Just do the opposite of whatever he recommends and you might do well.
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Postby Drain » Mon Jul 26, 2010 7:29 pm

fredflinstone wrote:"As of 12-31-2009, this portfolio had an annualized return of (-20.0%)..." Sounds like Mr. Shaffer's newsletter has quite a bit of value--as a contrary indicator. Just do the opposite of whatever he recommends and you might do well.

You know...that's actually kind of an interesting notion.
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Postby caaaad » Mon Jul 26, 2010 7:39 pm

Well so much for old Bernie. That article that's linked and Taylor referred to doesn't pull any punches either. I know I did try a couple services like Morpheus and Red onion or something. I lost money on both of them, granted a small amount but I was amazed at how easily they would lose my money. Schwab did something similiar with a managed account. Its lonely out there. Learning to keep it simple.
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Postby grok87 » Mon Jul 26, 2010 9:25 pm

caaaad wrote:This is the Option Advisor hotline update for Thursday, July 22, 2010 with the picks contained in the August edition of the Option Advisor newsletter. Our next hotline update is scheduled for Monday, July 26, 2010 at 7:30 p.m. Eastern Time.

AS OF TONIGHT'S CLOSE, IN THE AGGRESSIVE PORTFOLIO, 86% WAS ALLOCATED TO CASH AND 14% WAS ALLOCATED TO OPEN POSITIONS. IN THE PUT SELLING PORTFOLIO, 88% WAS ALLOCATED TO CASH AND 12% WAS ALLOCATED TO OPEN POSITIONS.

In the Aggressive portfolio, invest a total of 30 percent of your entire cash reserves allocated to the Aggressive portfolio into the six new recommendations as follows (equal dollars in each):

Buy the Currency Shares Euro Trust (FXE) September 18, 2010 120-strike call. The maximum entry price is $9.20, the target profit is 100% and the closeout date is August 17, 2010.

Buy the Fifth Third Bancorp (FITB) September 18, 2010 10-strike call. The maximum entry price is $2.90, the target profit is 100% and the closeout date is August 17, 2010.

Buy the Aruba Networks (ARUN) October 16, 2010 14-strike call. The maximum entry price is $3.50, the target profit is 100% and the closeout date is August 31, 2010.

Buy the Diamond Offshore (DO) September 18, 2010 75-strike put. The maximum entry price is $14.00, the target profit is 100% and the closeout date is August 17, 2010.

Buy the Ebay (EBAY) October 16, 2010 24-strike put. The maximum entry price is $3.60, the target profit is 100% and the closeout date is August 31, 2010.

Buy the Atheros Communications (ATHR) September 18, 2010 34-strike put. The maximum entry price is $5.90, the target profit is 100% and the closeout date is August 17, 2010.

Also, in the Put Selling portfolio, invest 30% of your cash reserves allocated to the Put Selling portfolio (equal dollars in each) into the four new recommendations as follows:

Sell the F5 Networks (FFIV) August 21, 2010 75-strike put. The minimum entry price is $1.00, the target profit is 10.8%, and the closeout date is August 20, 2010.

Sell the Lululemon Athletica (LULU) August 21, 2010 35-strike put. The minimum entry price is $0.40, the target profit is 10.3%, and the closeout date is August 20, 2010.

Sell the Life Time Fitness (LTM) August 21, 2010 30-strike put. The minimum entry price is $0.35, the target profit is 10.4%, and the closeout date is August 20, 2010.

Buy the Riverbed Technology (RVBD) September 18, 2010 25-strike call/Seagate Technology (STX) September 18, 2010 17-strike put pair trade. The maximum entry price to enter the Riverbed Technology (RVBD) call is $7.40. The maximum entry price to enter the Seagate Technology (STX) put is $4.10. The target profit is 50% and the closeout date is September 14, 2010.


Our next scheduled hotline update will be Monday, July 26, 2010 at 7:30 p.m. Eastern Time. Thank you for visiting the Option Advisor hotline and have a good evening.
RETURN TO PORTFOLIO

Last Updated on 7/22/2010 Print



*If you are buying to open a new position, "MEP" stands for "Maximum Entry Price." If you are selling to open a new position, “MEP” stands for “Minimum Entry Price." By heeding the MEP, you avoid establishing positions in options that have already made a significant move, which reduces the profit potential below an acceptable level.




Option Advisor Hotlines for July 2010
Click a date in BOLD below to access the corresponding Option Advisor Hotline.
S M T W T F S
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22

AM
PM
23

AM
PM
24
25 26 27 28 29 30 31

Thanks- that gave me a good laugh! What a pile of...
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Postby Adrian Nenu » Tue Jul 27, 2010 2:04 pm

So why does anyone in the media care about what Schaeffer has to say, let alone promote his money management firm or give him money to manage, given his pathetic record?! Proof that marketing wins over substance in the financial industry which is in bed with the business media.

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Postby caaaad » Tue Jul 27, 2010 3:27 pm

It has become painfully obvious to me that its wall street versus main street across the whole spectrum
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At last--a Boglehead!

Postby Taylor Larimore » Tue Jul 27, 2010 3:54 pm

Hi Caaaad:

caaaad wrote:It has become painfully obvious to me that its wall street versus main street across the whole spectrum


You are now a confirmed "Boglehead." 8)

Congratulations!
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Postby caaaad » Tue Jul 27, 2010 6:03 pm

haha Thanks Taylor, Its been a real journey for me, but I am proud to be even close to being a boglehead
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