Option LEAPS Economic Timing By Jason Schwarz. Buy and Hold.

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Presentation transcript:

Option LEAPS Economic Timing By Jason Schwarz

Buy and Hold

Economic Timing Warren Buffett, "I would consider a year in which we decline 15% and the Dow declines 30% to be much superior to a year when both we and the average advanced 20%." Steve Jobs, "You have to intercept a moving train."

Since 2000

Economic Weather Fear GDP Retail/consumer Employment Housing Leading indicators Corporate revenue growth Earnings estimates

Investment Vehicle LEAPS Strike price (out/in the money) Premium (intrinsic value + time value + volatility value) Expiration date

Option LEAPS Stock replacement Diversification Tool for hedging Great way to make money, not keep money

Rules for Improving Economy Fully invested Proper allocations Seek leadership Buy index on a selloff Double down by increasing risk Take profits Buy in anticipation of catalyst events Watch the economic weather!

Rules for Worsening Economy Cash is home Buy dips sell rips/defense. Beware of falling knife Identify downward leadership Be leery of high premium-investors take liquidity profits Cautious puts Slippery One year expiration Watch the weather!

Current Conditions om om