If you want spectacular gains, like Buffett used to make back in the day, you may be out of luck using Buffett methods. I believe that back in the day, markets were less efficient and more stocks were incorrectly valued. Finding stocks that catapult 100′s of percent in value in a year or two is very hard to do. It is hard to find stocks that will grow 50% in 3 yrs. And that isn’t even crazy growth. That was normal 20 yrs ago. Maybe it is just the last decade which has me pessimistic? (It’s the only one I’ve invested in though.)
Anyways, if you think you know which way the market is going to move there are ways to boost your returns besides options (and probably less expensive than options). My friend who trades options (his closest friends know him as “The Horse”) told me that “right now options are selling at a very high premium because we are in a market of never before seen levels of volatility.” Continue Reading
