A Review by Don Sloan
Buckle up and settle in. It’s payback time for small investors — who want big returns.
In her outstanding new book A Wall Street Bailouts for Main Street, Dr. Iris Marie Mack uses her Harvard University and London Business School savvy to simplify what she calls a “bulletproof trading strategy” that even the most inexperienced investor can use to become wealthy over time.
It’s a breakthrough primer that explains in easy-to-understand language the intricacies and importance of:
- Stock Options, and
- Covered Call Options (also known as “renting” your stocks)
These are the building block strategies used by sophisticated Wall Street players — and, once you understand the basic principles governing each one, you can use them to achieve personal financial success yourself — no matter how young or old you may be.
Dr. Mack fills the first three chapters of her exhaustively researched book with, among other things, startling background information on how the U.S. government has routinely bailed out financially insolvent companies and even banks in the recent past.
“While many people may be aware of the billions of dollars in bank bailouts from the U.S. Treasury Department, they are perhaps unaware of the trillions of dollars in bank bailouts from the Federal Reserve,” Dr. Mack says.
These bailouts have gotten out of hand, she asserts, adding that the Federal Reserve is, essentially, a for-profit entity governed by high-stakes influencers in foreign countries who are setting the banks up to fail yet again. Indeed, she asks the burning question that should be on every taxpayer’s mind:
“So, what will the government do next time around? How will the banks be bailed out? Also, who will bail the rest of us out? Investors? Small businesses? The average taxpayers on Main Street?”
Dr. Mack goes on to provide excellent insights, examples, and case studies explaining in sufficient — but not overwhelming — detail the relative importance and functions of stock market mainstay strategies like stock options, calls and puts, and “naked” calls vs “covered” calls.
Along the way, she provides excellent illustrations of just how some of these strategies might be analogous to other scenarios, like horse racing:
“(Let’s say) you bet that a horse Chestnut will win the next race. Therefore, you spend $10 to bet on Chestnut. The four-lap race will begin and you need to wait to see the result at the end. Now suppose you can buy or sell your bet during the race.
“After the first lap, your horse is in the lead! If Chestnut keeps leading, your lovely horse will bring you a big fortune! Should you sell your bet or keep it? You decide to wait. However, Chestnut seems to be tired during the second lap and falls behind now. If you sell your bet you can still get some money back, or you can wait and see. Now Chestnut begins speeding in the third lap and keeps leading until the final lap. Unfortunately, your horse finishes in fourth place and you get nothing.”
The horse bet, she explains, is similar to an options trade.
“Here, you chose not to buy the horse; you simply placed a bet on its outcome in the race. Similarly, you can choose not to buy a stock; you can, instead, decide to buy an option on the stock. What you bet on your horse is similar to what you paid for your option.”
It is this very gift for simplifying heretofore complex stock trading notions that sets this financial how-to book far above others in its genre. Dr. Mack’s impressive academic credentials don’t keep her from relating easily to everyday investors. In fact, she seems to revel in imparting her knowledge.
Her populist cry of “Don’t get mad; get even!” will resonate soundly with retirees, students and everyone in between who are looking for a simplified methodology for extending their resources — in a safe and sane manner.
Five-plus stars to Wall Street Bailouts for Main Street. Dr. Mack has authored a comprehensive, yet down-to-earth guide to making money that anyone can follow easily.