Yeah, the biggest joke in Wall Street is the 'Money Manager'. It's actually nothing more than who's the best at attracting the most money.
Basically it works like this -- if you understand the market, you most likely can come close to matching the S&P's returns, if not even beating it by a tad. But the key is to do it with less risk, or less 'beta'. If you can show high 'alpha' with less 'beta', then you get the biggest peice of the pie.
But like I said, just match or so what the market does. Then you go out, collect tons of money to manage and just make 2% a year on all that money. Most of these guys just watch CNBC all day and do what the crowd is doing.
You make $1 mill a year if you can grab $50mill to manage. And today that's not that much if you can build up a couple thousand accounts.
It's probably harder to do that than actually manage the accounts!
Back to HAL -- looks like today is a reversal day which 'should' see it start to retrace back to the low $40s. Our $45s I think for sure expire worthless but I think the play here is to cover them as soon as we get under $1. Book the $2 profit ($1.85) and then see where the stock is going. If it trades all the way down to the breakout point at $39 to $40, then that would be a great place to sell the puts also for profit for an expected bounce that could get us back into them for $2 to $3 less.
The goal for me is to always grab at least $3 a month out of these trades. These are income trades.
I'm going to put this out in the email today sometime because I'm getting a lot of requests to get back into options.
