Perhaps we are really in agreement about the fundamentals, just in disagreement about execution. Per your post, with options you basically require some poor sap out there that is giving you money... My point is that with stocks you require no such poor sap. You can make money on your own without taking it from other investors. For every dollar you make on options, somebody else provides you with that dollar (they lose it). Some may see investing in stocks as this way also, but I do not. There may be a sucker born every minute willing to give you their money, but eventually they go broke and all you have left are the people who know what they are doing.
What it is sounding like to me is that you believe the current option valuation models do not fairly value the options. You believe you know in which way the model is in error and play that to your advantage. Do you really think the models are off, and those who believe in the "losing side" of the model willingly continue to throw money your way?
My reason for asking is that as I have stated before, the variation in the system is absolutely huge compared to the "average" return. It is quite easy given five or even ten data points to believe you have a system, when in reality it is just the huge variation in the system that has been working your way. I have also noticed that people tend to remember the good things that happen much more than the bad things... Yeah, I once made a ton of money on options. They however forgot about the other ton of money they lost.
--Alan
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