Covered Call Philosophy
by Graham J OConnor
http://www.marketmilker.com?hcr=newsletter-article
Most people are aware that the stock market can either be a "Bear" or a "Bull" market, but few are aware that there is another scenario, that of the "COW" market.
The objective of our manual is to teach the reader how to "milk" that COW market for consistent monthly returns. While the Bears and the Bulls are guessing whether the market is heading up or down, we KNOW it is going to GO UP AND DOWN and we make money in either direction, compounding the earnings as we go.
We are concerned with the underlying equity, i.e. it has to be a sound stock that is not going to go out of business. However we are not duly concerned with the underlying price of that equity. We will just keep "milking" it to produce consistent monthly returns.
The old mindset of, "buy high sell low" is fundamentally flawed. If a $20.00 stock has dropped to $17.00 have you made a loss? The answer has to be NO, not until you realise that loss by selling it. If you don't sell it and continue to let it generate monthly cash income, how have you lost? Look at it this way, if you bought a rental property for $200,000 and rented it out for $2000 per month in 100 months (8 years, 4months) you would have recouped your investment and still own the property.
Now at some point during those 8 years, the property may have gone down in value to say $180,000, would you have sold it? Of course not, you would have continued to rent it out and said to yourself "No problem, it'll come back" and you would be correct in your thinking.
In the above scenario your investment may have gone through a period of negative equity, but who cares, keep taking the rental income and wait for the market to pick up. This is how we can "milk" the COW market. It just happens a lot quicker with stocks and The Market Milker System~ manual will show you how.
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