Chapter 2. Options Apostle
Investor: Bob Krebs
Date of Birth: July 24, 1952
Hometown: Orange County, CA
Personal Web Site: None
Employment: Engineer, computer storage business
Passions/Pursuits: Bible study, jazz lover, coaching his daughters' speech and debating team, budding novelist
Investment Strategy: Income investing for total return using put and call options
Brokerage Accounts: Charles Schwab, Fidelity, E*Trade
Key Strategy Metric: Yield
Best Pick: Cisco, Up 800 percent
Worst Pick: Deep Sea Supply Plc., Down 80 percent
Performance Since September 2005: Cumulative return of 287 percent versus 11 percent for the S&P 500
For many of us investing in stocks is fairly one-dimensional. Buy stocks of companies you think will appreciate and, ideally, sell them after they've gone up in price. Some people trade frequently, but most are buy-and-hold investors. Few are good at either of these strategies. Only a small number of investors ever venture into such exotic tactics as shorting stocks or trading options. Most are either too afraid of the risks involved or bewildered by the additional math skills required to execute these strategies well.
Proficiency in mathematics was never an issue for Bob Krebs, an electrical engineer and next-generation microchip designer for Western Digital. Still, investment success did not come overnight for Krebs. He describes himself as a 34-year student of investing and markets. His experience includes investing in California's ...