The Half Baked Lunatic

All the data we have at this point says that the universe that is just under 13 billion years old.  The universe exploded from a big bang and after a brief period of inflation, it has been expanding steadily at the speed of light. Although there are still some unanswered details, most cosmologists agree on these basic points. From here, however, there are numerous opinions and conflicting theories on the basic nature of the universe.

There are a few different mathematical models that show it’s possible that we can be living in an “open” universe which will continue to exponentially expand forever, a “flat” universe where the expansion will slow down and eventually stop at a certain size, or a “closed” universe that will reverse direction and eventually contract into a “big crunch” – presumably to explode again in another big bang (and with multiple series of “big bang/big crunch” cycles, we have an “oscillating universe”).  While all of these are mathematically feasible (and yes, I’m leaving out a few other good theories), the current data strongly suggests that we are in the “open” model, where the universe will continue to expand forever, until all the stars burn through their remaining fuel and all that’s left is ashes and space dust.

Of course, there are many unanswered questions – such as, More...

It sure is interesting living in Washington D.C.

I’m not talking about the inauguration yesterday, which was spectacular by the way – but in general, you just can’t get away from politics here.

The latest issue that’s getting my goat is this idiotic push to make Washington DC the 51st state.  The DC license plates proudly proclaim “Taxation without Representation” and there are posters all over the city pushing for DC statehood.

The underlying issue is the fact that DC has no representation in congress.  Some residents feel that More...

When people think about trading options, their first response is usually "too much risk". While it's true that options can be misused, they are often used to REDUCE risk by hedging other investments.  For example, buying a stock and selling a "covered call" is a substantially more conservative investment than just investing in the stock itself (less risk, but also potentially lower return).

And yes, I have learned the hard way what can happen if you lose your head.  After about ten years of successfully and profitably trading options, I entered into an overly aggressive position in 2006 that went south - and pretty much wiped out my entire gains of the previous ten years.  Lesson learned: stick to your strategy and stay within your limits!

But in general, even with that painful experience, I am still a firm believer that trading options is more prudent than buying stocks.

Admittedly, options are far more complicated.  More...