some general thoughts

If I have a contribution to make here, it is to get people (including myself) to think clearly about what they are doing. When you have to commit to paper what you believe, it forces you to confront fuzzy thinking. There are times when a method of investing works, even when we don’t quite understand it. At those times everything seems fine until all of a sudden, it doesn’t work and the world comes crashing down. No doubt, if you are old enough, you have seen what I’m talking about. When you have an understanding of why what is working, is actually working, then you may realize earlier that those conditions no longer hold, and it is time for a change.

As of this moment, I believe that I can continue selling puts on stocks that I would like to own (at some time in the future) and selling calls once they are put to me. Were the economy really to regress and not just grow slowly, I would reconsider my scheme. I know that I wouldn’t want to own companies that were really shrinking, as opposed to growing slowly (in this type of environment.)  Were this a faster growing economy, I would be pickier about whether I would own a slower growing company.

Especially since this is an election season, there is a lot of extraneous noise. But it seems to me that most of the world is still in the slow to moderate growth stage. Yes, I’m aware that there are parts of Europe that are actually shrinking, but even there, for the most part, it is recession not depression.

papermaker67 said: Slow growth will stop as soon as they stop printing money-When that is?  Who knows.  

 I say slow growth/no growth continues as long as the current policy climate continues.  Printer Ben's shenanigans are just desperation, stupidity or both.  Like putting a beer in front of a guy who's already downed a dozen and is ready to puke.  He needs something else, not another beer.  Same thing with the U.S. economy, it doesn't need free money, it needs a reason to grow. 

spshapiro said:

If I have a contribution to make here, it is to get people (including myself) to think clearly about what they are doing. When you have to commit to paper what you believe, it forces you to confront fuzzy thinking. There are times when a method of investing works, even when we don’t quite understand it. At those times everything seems fine until all of a sudden, it doesn’t work and the world comes crashing down. No doubt, if you are old enough, you have seen what I’m talking about. When you have an understanding of why what is working, is actually working, then you may realize earlier that those conditions no longer hold, and it is time for a change.

As of this moment, I believe that I can continue selling puts on stocks that I would like to own (at some time in the future) and selling calls once they are put to me. Were the economy really to regress and not just grow slowly, I would reconsider my scheme. I know that I wouldn’t want to own companies that were really shrinking, as opposed to growing slowly (in this type of environment.)  Were this a faster growing economy, I would be pickier about whether I would own a slower growing company.

Especially since this is an election season, there is a lot of extraneous noise. But it seems to me that most of the world is still in the slow to moderate growth stage. Yes, I’m aware that there are parts of Europe that are actually shrinking, but even there, for the most part, it is recession not depression.

 You’re a voice of reason on this forum! I have no doubt that you have helped many coming here for advice to know the difference between a lottery ticket and using the market wisely. And when it comes to options or even stock for that matter the advice you gave should be imprinted at the top of every page of TK, “If you can’t explain to someone what you’re doing and why, don’t do it”. 

I recently sold August $26 strike for Valero Energy (VLO) for a nice premium. I was actually hoping to get the stock but its value shot up over $28.00 and now is selling for a little over $27.00. This stock should have a nice upside based on their revenue and earnings increases just reported.  

I think just using some analysis of companies that are trending up and finding one that should beat the street makes for a nice pace for earnings. Looks like I will need to roll this option upwards but I was wondering if I should wait a little and see if oil prices drop from the worldwide slow down which should cause a general reduction in oil equities. 

Any suggestions? 

cmont:
I think selling puts is generally a good strategy. However, I don't believe FARO to be a very good candidate.
First off, it's down big today because it missed earnings.
Second, it has a serious liquidity problem. The stock trades less than 150,000 shares daily, on average. On a huge day for the stock volume-wise (more than 10x normal), a total of 305 option contracts were traded, across all strikes and months. The bid/ask spreads are really wide. You might be able to get someone to bite with a limit order somewhere in the middle, otherwise you're just getting ripped off.

I am trying to realize why VLO won't get past the resistance at 30. It appears it won't be long before it is in the low 20's. It is interesting how their eps isn't more consistent month to month and the fact that they never really recovered from the 2008 debacle.

This kind of reminds me of when I worked for Martin Marietta and their stock would have a very consistent cycle. The 401K would allow us to get in and out of the company stock if you let 30 days pass between trades. I then found out that many employees were doing the same thing and they expected returns of about 30 - 50 % a year.