Month End Summary – August 2007

In a strange way I liked August’s price action.  We got the correction we’ve been overdue for and got a good bit of panic to enter the market.  I took the opportunity to reload on some positions and plan to make another strong run for a couple of months.  There’s enough fear in the market now to think the downside risk isn’t too far from the upside potential.  That’s the kind of market I prefer for writing options. 

If it’s a raging bull market, you’re probably better off buying calls.  If it’s a bear market, the premiums don’t always beat out the losses.  With a market that will likely not fall another 5-7% in the near-term, put selling is a cool place to hang out for now. Volatility is up and risk is down.

I’m still kicking the major indexes butts although slightly off of the insane pace I was running before August.  Here’s my breakdown according to what Quicken tells me my returns are.  Quicken and Ameritrade tend to stay off by a few bucks always.  I haven’t taken the time in a while to figure out if I’ve mistyped something or it’s just the trade settling that is the difference.  Either way, I’m up 30% for the past year and that kicks ass! 

• Current Account Value: Ameritrade: 61,963.34, Quicken: 62,060.79
• Annualized return year to date: 27.57%
• 12 month trailing return: 30.70%
• My % YTD return (using quicken report Average Annual Return Current Year): 16.41%
• S&P % YTD return: 4.9%
• Dow Jones % YTD return: 7.52%