Reviewed by Ed Dobson, President, Traders Press, Inc.
Intriguing title. Intriguing concept. Excellent information. Well written and eminently practical information. These are some of the attributes that I would ascribe to this new book from Dr. Terry Allen, author of Making 36%.
If there were no subtitle added to the cover, one might wonder what such an unusual title (The Mighty Mesa) might refer to. The main theme of the book, however, is revealed in the subtitle: A Tested Options Strategy Designed to Never* Lose Money (and Just Might Make 36%).
Readers of Allen’s earlier title (Making 36%) will find that there is about a 50% overlap in the ideas and information presented. In this new book, Allen adds a number of new twists and refinements to the option strategy previously discussed in Making 36%. In my opinion, this book is indispensible, not only to new readers interested in conservative option strategies, but to readers of his first book.
A cogent argument is made that traditional investments in stocks, bonds and mutual funds are foolhardy and that the prospective returns over coming years won’t come anywhere close to what they have formerly been. Investment advisors, mutual fund and money managers and brokers don’t have a clue, Allen asserts.
Instead, he advises that one follow the options strategy he has developed and has fully revealed in this book. He compares it to other forms of investment and argues that it is actually more conservative while, at the same time, offering far superior returns with less risk and higher probability of success.
I won’t reveal the specifics of his strategy here…you’ll have to read the book to find out. However, I can attest from personal experience that I think his strategy is viable and that learning it is a very worthwhile endeavor. I have a good personal friend who manages my own retirement account using an options strategy that very closely resembles Allen’s…and I will share with readers of this column that my account experienced a very gratifying 38% gain during the last four months of 2008, a period during which the general market, as we all know, suffered a devastating decline, and many found their retirement accounts cut in half. (As the joke goes, “My 401K became a 201K”.)
The “Mesa” in the title of this book refers to the shape of the profit curve of a typical position constructed using the strategy described in the book…a wide area over which an approximately equal profit will be realized if a position is held until expiration of the options involved, with a sudden dropoff to lower profits and eventual losses if prices exceed this area on either the upside or the downside.
Allen goes into great detail showing how to implement his strategy and when and how to adjust or exit positions that are not performing well. He does start “from scratch” to explain options to the uninitiated but progresses rapidly to concepts best understood by those with prior knowledge or experience. His strategy is not simple to implement or understand. However, in my opinion, he explains it so clearly that anyone with the dedication and desire could carry it out.
Allen has an advisory service that he freely promotes in the book, which gives subscribers the specific trades he recommends using the book’s strategy, as well as the option of a program whereby they may elect to have their account “auto-traded” at a leading and well known options firm, which he recommends wholeheartedly.
This book contains valuable and eminently practical information for those willing to completely change their ideas about what constitutes a “prudent” investment. It explains the core strategy clearly enough for them to carry it out on their own and offers viable alternatives for those without the time or the inclination to do so. I personally believe wholeheartedly in the approach presented...but do warn that nothing is a sure thing.
This book and additional information on it are available on www.traderspress.com Review by
Edward Dobson, President
Traders Press, Inc.
Greenville, SC
