From p.233 of "Winning the loser's game: timeless strategies for successful investing / Charles D. Ellis, 2002"
My Aunt Saizie is in her late eighties. After years and years of careful saving and wise investing, she built up a portfolio of common stocks worth nearly $100,000. She asked me whether she should take the strong recommendation of a very nice-looking young man from the local broker's office. His proposition didn't sound quite right to her: sell all her stocks (incurring a large capital gain) and put most of the money in Treasury bills for safety of principal and then use the rest to buy stock options so that she could participate in any bull market that might come along. Fortunately, she is too wise and shrewd an investor to get drawn in by something that "interesting" (Imagine all the commissions that would have been generated for the broker)
Warrants usage - an example
There are many Warrants Providers actively participating at the Hong Kong stock market nowadays. Nearly all of them are coming from abroad, such as Societe Generale, BNP Paribas, Credit Lyonnis, Credit Arigole, Deutsche Bank, ABN Amro, Credit Swiss, UBS, HSBC, KBC of Belgium, Merrill Lynch, Morgan Stanley, JP Morgan Chase, Citigroup, Goldman Sachs, and Macquarie. (One reason is their superior intelligence as I believe maintaining warrants should not be a trivial task. It must be of high-tech and there may be hackers, . . . etc.)
Here is one thing that these Warrants Merchants TEACH us everyday via the media such as radio: "Use some of the profit obtained from stocks to buy warrants." Compare with the above example from "Winning the loser's game."
660ky612 Hong Kong
PS. Feel embarrass because of conflict of interest? Those who sell warrants here are mainly young girls. Very pretty and with sweet voice. Yet, could not touch, but I might actually do this as there are many many seminars that we may meet together face to face.