The Weekly Trader

This is my latest article for Marketwatch, about Warren Buffett, and his optimistic outlook on the U.S. stock market and economy, versus three doomsayers: http://bit.ly/xAWTKX

Note: This paragraph was not included in the final version of the article (via the CNBC interview):

Buffett also believes that it’s a great time to buy a home right now, as long as you live in it. “I’d finance it with a 30-year mortgage, and it’s a terrific deal.” If he was the handy type, and Buffett isn’t, he’d buy a couple of houses at distressed prices and find renters. “It’s a leveraged way of owning a very cheap asset now, and I think that’s probably as attractive an investment as you can make now. But I think equities are very attractive compared to everything else.”

I wrote an article about the pros and cons of penny stocks for Marketwatch, which you can find here: http://bit.ly/wl7S1r

My article is one of the most popular today. In my article, I didn’t include the following information: The penny stock that is being touted by newsletters and on email is NSRS (North Springs Resource Company). Although this dollar stock is on a roll right now, the good times will eventually end. After being up as much as 25% a day on some days, if you made any profits on this penny stock, take the money and run.

In my latest Marketwatch article, I went a little outside my usual subject area to address the 2012 doom-and-gloom predictions. These type of articles always create controversy, but they also help people to think, which is my goal. I hope everyone had a great holiday and a happy new year 🙂

Here is a link to my article: http://bit.ly/v9urLr

Every week, I receive a lot of letters from readers about my books and articles. I answer all the letters, and usually don’t post them. However, in my latest article for Marketwatch, “5 Trading Strategies If You Have Less Than $3,000,” (http://bit.ly/tzoP3J) people left over 150 comments. Many wrote that college students had no business learning about the stock or options market.

Then I received a letter from Daniel Dombroski from the University of Connecticut. As you’ll see below, Daniel has been successfully trading options while going to school. Although it’s not easy, it is possible to make money with a little money. I’m sure that more than a few financial firms will be interested in speaking with him about a job or internship.

Here’s his complete letter to me:

My name is Daniel Dombroski, an undergraduate student at the University of Connecticut. I read your article, “5 trading strategies if you have less than $3,000”, and laughed a little when I read your suggestion on implementing option strategies. I started trading options about three years ago, right out of high school. The markets have been less than friendly over the past few years to many investors and traders but this increased volatility has provided many profitable strategies utilizing options.

My experiences over the past few years have provided me with many unique opportunities, the most important of which is my understanding of the markets. Comprehending and capitalizing on movements has differentiated me from other students who are simply being lectured in the class room. This is a huge competitive edge in the minds of other traders and potential employers. I have also been given the opportunity to educate other students about options trading and how creating a well planned strategy can protect investments in ways simply buying and selling equities cannot accomplish.

I fully support students learning about options and how they can protect and leverage themselves when using a well thought out, discipline trading strategy.  What is important to point out is that results will reflect how the trader views options . If you treat this vehicle like gambling then your account will reproduce similar results. You may win in the short run but the house always gets its money.

As a disclaimer, my primary trades are credit and debit spreads to generate steady income. Correct sizing allows me to adjust my positions accordingly. I plan on continuing to grow and adapt my strategy and rules over time to reproduce results I am comfortable with.

In short, thank you for recognizing this investment vehicle for people with small accounts (particularly college students.) I look forward to reading more articles that encourages eager young prospective traders my age to take active steps in creating their own financial independence and securing a profitable future.

Warm Regards,

Daniel Dombroski