You Cannot Hide from Your Debt

Of the many lessons my parents tried to teach me growing up, perhaps the one that stuck the most had to do with personal debt.  Unfortunately, through the wrong example, I learned what a slave to debt a person can become.  I also learned that the only true, lasting fix to debt, is to be disciplined in your spending habits.  I further learned in the midst of this, that interest never sleeps.  It works 24/7/365 and you literally are a slave to it until it it gone.

I've been telling my family, friends, co-workers, subscribers, and pretty much anyone who would listen, that the primary reason I do not believe the economy has recovered in the past few years, in spite of all the hype to the contrary, is because of our deficit spending and our debt as a country.  Some nod their heads and seem to agree.  Others argue and regurgitate the talking points from the media about it not being that big a deal.  Others seem to not really care and treat it like many other political lightning rods: they hide from it.  They bury their heads in the sand.

Well, some are finally figuring it out, and that is why I wanted to share this article I read today.  I found it on Foxnews.com and it credits the AP for the article.  I wish I knew who specifically to give credit to, but let me just say "bravo for someone starting to get it".

http://www.foxnews.com/politics/2013/09/17/new-study-warns-us-long-term-debt-problems/

NFLX Adjustment

At Safe Option Strategies we teach trade adjustments.  We believe that any trade you open should be one you could adjust in case the stock moves contrary to what your expectation is.  But, it is a common misconception that any trade can be adjusted to profitability when it goes against you.  While that is an ideal scenario, sometimes what an adjustment will do is simply lessen the loss on a trade.

A great example of this is a trade we opened on NFLX about three weeks ago.  The trade moved as badly against us as possible, and did so in just one day.  By the time we could react and make an adjustment (our secondary exit plan) we were already looking at our max loss in the trade.  By adjusting, we have now created a situation where we will still take a loss, but rather than 100% of our max loss, we are looking at between 35 and 50 % of our max loss.

To see this trade and the adjustment we made to it click here.