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<p>Preface xiii</p> <p>Acknowledgments xvii</p> <p><b>Chapter 1 Fear and Ignorance 1</b></p> <p>The Stock Market Crash of 1929 2</p> <p>Investment Knowledge + Stock Market = Profits 6</p> <p>Understanding Investor Behavior 6</p> <p>The Crash of 2008 7</p> <p>What to Do First 8</p> <p>My Investment History 10</p> <p>Summary 13</p> <p><b>Chapter 2 Invest with Confidence 15</b></p> <p>What is Investing? 18</p> <p>Asset Allocation 18</p> <p>Risk versus Reward: Finding Your Balance 19</p> <p>The Three Strategic Factors 22</p> <p>Stocks: The Long-Term Core 23</p> <p>Defining <i>Investing </i>and <i>Fear </i>29</p> <p>Market Madness: Black Monday, October 19, 1987 31</p> <p>Market Anxiety is Caused by Many Factors 32</p> <p>Year 2008: The Collapse of the Stock Market 32</p> <p>Investing and Gambling 34</p> <p>Investment Policy Statement 35</p> <p>Discipline Can Be Really Good for You 35</p> <p><b>Chapter 3 An Overview of How to Invest 37</b></p> <p>Inflation 38</p> <p>Investing in Stocks 39</p> <p>Contrarian Investing 48</p> <p>Growth Stock Investing 48</p> <p>Common-Sense Stock Selection 49</p> <p>Dividend Income Stock Investing 50</p> <p>Keep in Mind 50</p> <p><b>Chapter 4 Stock Picking, Research, and Annual Reports 53</b></p> <p>Questions for Investment Decisions 54</p> <p>Sources of Investment Information 55</p> <p>Trade Press 57</p> <p>Investment Clubs 58</p> <p>Reading the Annual Report 59</p> <p>The Quarterly Report 66</p> <p>Changing the Rules 66</p> <p>Annual Meetings 67</p> <p>Stock Selection Summary 68</p> <p><b>Chapter 5 How to Read the Financial News 71</b></p> <p>Guide to the Economy and the Stock Market 74</p> <p>Your Wallet Can Be a Leading Economic Indicator 76</p> <p><b>Chapter 6 The Art of Investing, Risk, and Reward 79</b></p> <p>Stocks or Bonds? 80</p> <p>Market Timing 81</p> <p>Avoid Common Investment Risks 82</p> <p>Risk Breeds Fear 83</p> <p>General Investment Strategies 85</p> <p>The Tools of Contrarian Investing 89</p> <p>Classic Stock Market Statements 89</p> <p>Madness of Crowds 90</p> <p>Take Advantage of the Pros 92</p> <p>Insider Information 95</p> <p>Insider Trading is Not Always Illegal 96</p> <p>Buy, Sell, or Hold? 97</p> <p>Performance Records 100</p> <p>Investing Considerations 100</p> <p>Transaction Costs Compared 101</p> <p>To Make Money in the Stock Market, Don’t Lose Any 102</p> <p><b>Chapter 7 Dividend Reinvestment Plans 105</b></p> <p>Dividend Reinvesting Plans and Dollar Cost Averaging 107</p> <p>The Compounding Effect 108</p> <p>DRPs: Advantages for the Investor 108</p> <p>DRPs: Advantages for the Companies 109</p> <p>Using DRPs to Select Stocks 109</p> <p>Safety with a Small Investment 110</p> <p>Dividend Reinvestment Plans and the Compounding Effect 110</p> <p>The Dividend Debate 110</p> <p><b>Chapter 8 Picking and Dealing with a Stockbroker 113</b></p> <p>We Invest to Make Money 114</p> <p>The Buck Starts Here 115</p> <p>Shocking Facts: Is Research from Wall Street Useless, or Worse? 116</p> <p>The Stocks in the Dow Jones Averages 118</p> <p>Today’s Bargains Can Be Tomorrow’s Winners, and Today’s Winners Can Be Tomorrow’s Losers 120</p> <p>Why Use a Discount Broker? 121</p> <p>Understanding Procedures 122</p> <p><b>Chapter 9 Advanced Investing and Goal Setting 131</b></p> <p>Financial Failure 132</p> <p>Money × Return × Time = Your Goal 134</p> <p>Your Money 135</p> <p>Your Return 136</p> <p>Your Time 136</p> <p>Investment Risks 138</p> <p>Risk-Reward Relationship 139</p> <p><b>Chapter 10 Building Your Portfolio 141</b></p> <p>How the Pros Choose Stocks 142</p> <p>Benjamin Graham, the Value Investor 143</p> <p>How Other Professionals Invest 145</p> <p>Value versus Stock Price 146</p> <p>Buying and Selling Stocks 147</p> <p>Portfolio Management Guidelines 150</p> <p>A Reliable Way to Invest 155</p> <p><b>Chapter 11 Basic Investment Guidelines 159</b></p> <p>The Realities of Investing: Mind over Matter 159</p> <p>Don’t Panic 160</p> <p>Do Not Try to Predict the Market 160</p> <p>Capitalize on Stock Market Anxiety and Euphoria 162</p> <p>Remember, No One Becomes Poor Taking a Profit 163</p> <p>Understanding Bankruptcy 164</p> <p>Key Considerations 166</p> <p>Always Remember 168</p> <p><b>Chapter 12 Options and the Stock Market 171</b></p> <p>What is an Option? 171</p> <p>The Business of Options 172</p> <p>Options Share Many Similarities with Common Stocks 173</p> <p>History of Options 174</p> <p>Function of Options 175</p> <p>Factors Affecting Option Valuation 176</p> <p>The Option Premium 179</p> <p>The Option Strategy 180</p> <p>Some Questions and Answers 181</p> <p>Getting Started 182</p> <p>Why Sellers Sell Calls: Some Strategies 183</p> <p>Option Exercise 186</p> <p>Option Fundamentals 187</p> <p>Using Options and Margin 191</p> <p>What is Margin? 192</p> <p>Avoid the Premium Trap 192</p> <p>Put-Call Ratios 193</p> <p>Option Quotes 194</p> <p>Selling Options: Prudent Investing Method 194</p> <p><b>Chapter 13 Options and Potential Returns 197</b></p> <p>Naked Option Writing 198</p> <p>Starting a Covered Call Program 198</p> <p>The Pricing of Options 199</p> <p>Determining the Best Time Value 202</p> <p>Determining the Best Strike Price 203</p> <p>Determining the Best Underlying Stock 205</p> <p>When to Take Action 206</p> <p>Understanding Published Option Premiums 207</p> <p>Option Symbols 209</p> <p>The Standard Method of Using Options 211</p> <p>My Method of Using Options 211</p> <p><b>Chapter 14 Margin: The Credit You Can Use 215</b></p> <p>Advantages of Margin 217</p> <p>The Margin Account and Buying Power 218</p> <p>Margin Account Maintenance 219</p> <p>Margin Interest 220</p> <p>Important Margin Principles 222</p> <p>Opening a Margin Account 222</p> <p>Basic Ideas and Terminology 222</p> <p>Portfolio Valuation 223</p> <p>Portfolio Financials 223</p> <p>Margin or Maintenance Call 224</p> <p>Converting Dividends into Capital Gains 224</p> <p>Using Margin for Personal Purchases 224</p> <p><b>Chapter 15 Managing an Option Income Portfolio 227</b></p> <p>The Writing Possibilities 231</p> <p>Option Selection for Option Writing 233</p> <p>Selling Time Value 234</p> <p>Selling a Covered Call Option 235</p> <p>Stockbrokerage Commissions 237</p> <p>Buy and Write Strategy (Buy-Write) 237</p> <p>Formula for Stock and Option Selection 239</p> <p>The Option Buyer 240</p> <p>Proof That an Option Income Portfolio is a Winner 240</p> <p>Follow-Up Action 241</p> <p>Periodical Review of Portfolio Equity Holdings 242</p> <p>Option Income Portfolio Review 245</p> <p><b>Chapter 16 Option Income Portfolio as a Tax Shelter 247</b></p> <p>Investment Definitions 247</p> <p>The Option Income Portfolio and Taxes 249</p> <p>Option Contract Closing Transaction 250</p> <p>Tax Deferral 250</p> <p>Tax Gains or Losses 251</p> <p>Capital Loss or Gain Bank 252</p> <p><b>Chapter 17 Options: Standard Operating Procedures 255</b></p> <p>Rule of Thumb 256</p> <p>No Time = No Time Value 256</p> <p>Stock Price Goes Down 258</p> <p>Stock Price Stays the Same 258</p> <p>Stock Price Goes Up 259</p> <p>Selling and Buying Back Calls: One Stock for One Year 262</p> <p>Option Income Portfolio Procedure 263</p> <p>So Why Aren’t You Selling Options? 267</p> <p><b>Chapter 18 LEAPS 269</b></p> <p>LEAPS Options for a Longer Term 270</p> <p>LEAPS Pricing 271</p> <p>LEAPS Symbols 273</p> <p><b>Chapter 19 Conclusions 279</b></p> <p>Fear, Greed, Hope, and One’s Self 280</p> <p>Traits of the Winner 281</p> <p>Traits of the Loser 281</p> <p>The Surprising New Shape of the Economy 282</p> <p>Madness of Crowds Returns 284</p> <p>The Good News 286</p> <p>Remember Time Plus Money for Successful Investing 287</p> <p><b>Appendix Investing in Citigroup through the Years 289</b></p> <p>Citicorp: A Financial History 289</p> <p>Contrarian Investment Club History 291</p> <p><b>Resources 295</b></p> <p>Investing Books 295</p> <p>Option Books 297</p> <p>Information Links 298</p> <p>About the Author 301</p> <p>Index 303</p>

<p><b>HARVEY C. FRIEDENTAG</b> is an investment adviser and money manager. He is certified as a Federal Court expert witness on stock trading, options, and other derivatives. Specializing in covered call writing, Friedentag has been managing money since 1986 and has consistently generated annual returns of more than 15%. He is also the author of the book <i>Investing without Fear</i>, which has been called, "a gem of a book for serious option writers." Friedentag serves as President of the Contrarian Investment Club in Denver, Colorado.

<p>The proliferation of brokers, salespeople, and other investment "professionals" has given some people a false sense of security and distracted them from developing an adequate understanding of the investment discipline. And while a growing number of investors are beginning to take back control of their portfolios, without the proper approach, they're leaving the opportunity for profit purely up to luck and chance. <p>Nobody understands this better than author Harvey Friedentag, a registered investment adviser who has been successfully using one of the most rewarding forms of investing in existence—the covered call option—for more than thirty-six years. Now, with <i>The Stock Option Income Generator</i>, he outlines this low-risk approach to making predictable profits regardless of the state of the overall market. <p>Written in a straightforward and accessible style, this reliable resource will open your eyes to one of today's most effective investment methods—showing you how the process of picking stocks and then selling call options against them can help generate a constant stream of income. Along the way, you'll learn how to: <ul> <li>Make consistent profits in the stock market and increase your gains</li> <li>Protect stock holdings from price declines, cutting your losses</li> <li>Profit from big market moves as well as sideways moves</li> <li>Receive a controllable tax shelter from an option income portfolio</li> <li>Buy more stocks for less money</li> </ul> <p>While the book opens with coverage of some fundamental issues—including the basics of investing—it quickly moves on to address the essential aspects of Friedentag's proven strategy and touches upon the forces that could affect its performance. <p>The stock market has been full of bear markets—not to mention recessions—before, and despite these events, a portfolio of stocks with covered option calls has turned out to be a lot more valuable over the long term than a portfolio of bonds, CDs, or money market funds. If you're determined to make the leap from a serious investor to a successful one, you don't have to learn the tricks of the trade; you have to learn the trade. <i>The Stock Option Income Generator</i> can help you achieve this goal and put you in a better position to generate better overall market returns, without excessive risk.

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