Customer Reviews

Covered Calls and LEAPS--A Wealth Option + DVD: A Guide for Generating Extraordinary Monthly Income (Wiley Trading)

5 star:		(29)
4 star:		(4)
3 star:		(9)
2 star:		(3)
1 star:		(19)

 

 

For about a year, I actively traded two accounts using the methods taught in this book. These are the same techniques taught during the authors' two-day intensive seminar. Over the last two years, I have spoken with well over 100 graduates of the authors' two-day intensive seminar. Interestingly, all of us have a similar experience to share. If you purchase the book and try the technique, odds are that you will have the same experience as well. Here's how it will go:

1) The method appeals to your logic: Buy a stock and collect instant income by selling a covered call. If your stock goes down in value, don't sell the stock at a loss like the rest of the world, instead, continue to collect monthly income on the stock whether the stock goes down, up or sideways. One day, when the stock is back to break-even, then we sell the stock. In the meantime, we collected 3%-5% income per month by renting out the stock! Sounds so good that you plunk down $3,750 for the two-day intensive seminar just to make sure you learn the method properly. You also invest in the $1,200 per year toolbox and covered call selection service.

2) The first few months of trading are great! Sure enough, you buy a stock, sell a covered call and instantly have 3%-5% cash income from the selling the call. Secondary calls on stocks that fall a bit are easy too: "Look at me - just made another 4%!" Anyone who asks (and even if they don't) - "Yep, I'm making 3%-5% income per month, how about you?"

3) After the first few months, several of your positions are in "management." Things are getting a bit more difficult now. Fewer and fewer dollars are available to start new positions that generate the easy money. Further, the TSS - used to generate "rent" on fallen positions - just isn't as easy as it looked. The stocks for several TSS's have been going up instead of down like they were supposed to do. This leaves you upside down with a loss on these TSS's. Now, because you're a bit gun-shy about selling more TSS calls, you have a couple more positions for which you haven't done anything for the month. Total income for the month has dropped a bit - "but hey, I still made almost 2% for the month, that's as much as many people make in a year!"

4) Realizing you probably need some help with TSS'ing, you e-mail Joe with a question. In response, Joe berates you by calling you a moron for thinking too much, for missing an obvious "inverted V" where you should have sold a TSS, and missing another obvious "V" where you should have bought it back. Joe then publishes your whipping in the "Cow Report" for all to read. The seminar is in town next weekend, so you attend again to brush up on the TSS and to talk with other investors. As they go around the room, every alum states they are making 3%-5% per month - wait a minute - that person just admitted he's only making 1%-2% per month. Joe humiliates him, which convinces you to state you're making 3%-5% per month should they call on you.

5) After another couple of months, a substantial majority of your positions are now in management. Many TSS's are upside down. Several of your stocks have fallen substantially in value, but you haven't TSS'd them as often as you should have. You tried an SSR to rescue one of your TSS's, but it did not get called out. Now you have a LEAPS that just lost 60% of it's value during the last month when the stock fell just 10%. How did that happen? Why did this SSR "rescue" technique leave us in more trouble than when we started? You know we don't speculate on stock price movement (like the stupid people on Wall Street), but you've noticed that success with new positions, TSS, SSR, SSSR, CPR, etc., all require that you properly guess the future movement of the stock.

6) It's all about cash flow, not account value, but after nine months, you can't help but notice your account values are down over 25%. Astonishingly, even though your taxable account is down 28% in value, you're having to pay short term capital gain taxes on the $25,000 in cash flow "income" you generated! Frustrated with your lack of success, you decide to pay Joe and Aaron another $3,000 to attend the Master's seminar.

7) The Master's seminar was exciting and fun! Some good points were made and obviously the method works for some people. Look at all the people who claimed they were making 3%-5% per month on the survey forms. Actually, you claimed that as well - "Yes, my account dropped $28,000 in value, but I reported $25,000 in cash flow to the IRS. That's close enough to 3% per month."

8) It's been almost a year. At 3%-5% per month - with all income reinvested - your accounts should be up at least 40% in value. Instead, your accounts are still down over 25% in value. It's just really hard picking the right time to enter new positions and deciding when to sell and buy back those TSS's. This new advanced charting seminar should help. Let's give Joe and Aaron another $2,000.

9) Advanced charting helps, but you're still certainly not growing your account at 3%-5% per month. Many acquaintances who started at the same time as you have given up on the method. Frankly, several of them have really good points as to why this technique isn't working. Maybe they're right. It's been over a year, you've given Joe and Aaron over $10,000 of your hard earned money, you're accounts are down in value by 30%, and to add insult to injury you've had to pay the IRS income tax anyway. Oh my God! What have I done??...

Original review December 30, 2006

I have taken the CSE 2-day Intensive Seminar based on this book and have been investing with covered calls for the past year. I like the empowerment of the trading system for me to take investment control of my own retirement funds. I value learning the price channel principles in the book that help me find patterns to "buy low and sell high".

Something that makes me feel uneasy about covered call returns is how the book authors have administered an educational "CSE Fund" account. The data shows how it is possible to earn high returns from call sales while the account value rises slowly or can actually decline.

The following four slides appeared in the recorded 2-hour Introductory Seminar that I archived on September 13 2005 from the CSE website.

Slide #1:
Practicing what we preach
* The CSE Covered Call Fund is a covered call investment
fund managed by Compound Stock Earnings
* It began with a deposit of $40,000 of our own money into a
brokerage account
* Our objective is to generate 5% cash return per month
from the fund
* 8 year time horizon (we are long term investors)
- 5% per month end value will be $4,327,456
- 6% per month end value will be $10,750,361
* We are achieving 4.9% cash return per month

Slide #2:
Leading by example
* Clients are given access to the Fund
through an email service
* We email EVERY single transaction to
subscribers as it happens in our own
account
* This is an educational service, WE DO
NOT manage client's own money
- Client's learn by example
* Many clients do, however, choose to
mirror the fund's activities in their own
account
- They can do this as we email each
transaction to them as it happens
* We also send the brokerage statement to
clients -- it is totally transparent

Slide #3:
Putting our reputation on the line
* Why do we put our reputation on the line like this?
* We do this because we KNOW our techniques work
* We KNOW our techniques allow cash generation regardless of
market direction
* You will not find anyone else in the marketplace who does this
* Why? They are not confident enough in their ability or technique
to WALK THE TALK
* We put our ability and techniques against the market and allow
the world to see our results

Slide #4:
CSE Fund Brokerage Statement
* $5959.87 realized cash return in 4 months
* $5959.87 in 4 months = $17,879.61 in 12 months
* $17,879.61 represents annual cash return of 45%
- At the current return rate the fund will make 45% this year
* 45% cash return IGNORES the effect of compounding
* We are on target to reach our 60% return objective for the year
* The numbers are there in black and white

The "CSE Fund" was a great idea to demonstrate to clients how the CSE masters can apply the rules of the CSE Covered Call technique to dramatically grow an investment account value over several years.

The daily brokerage statement was emailed from April 2005 until June 13 2006 to clients who subscribed at $100 per month. The account value had decreased from $40K to $35K where it remains today. An email to clients explained that the "CSE Fund" returns have been impaired by large commissions. "In fact, had the commissions been equivalent to a deep discount broker, the original return objectives of the Fund would have been achieved." I estimated commissions less than $2K for the "CSE Fund" transactions. For example, 50 positions x $33 = $1650. If these commissions were reduced to zero, the account value would still be only $37K. Slides #1 and #4 state that the "CSE Fund" was meeting its objectives (even with the larger commissions). CSE stated a plan to move the "CSE Fund" to a deep discount broker before continuing with new trades, and to stay tuned for the new brokerage statement. Six months later, no further announcements have appeared. The "CSE Fund" has been quietly discontinued. There is no reference to the "CSE Fund" that is supposed to run for 8 years in the current version of the recorded 2-hour Introductory Seminar on the CSE website.

The "CSE Fund" with an actual brokerage statement evolved to a new "CSE Managed Covered Call Selections" service, beginning November 2005, that similarly teaches clients to enter and manage covered call positions. It is similar to the "CSE Fund". However no funds are actually invested by CSE for clients to view a brokerage statement. CSE publishes a summary of open and closed positions with percentage return data. However, the "CSE Fund" profitably-closed positions from April through November 2005 are included in the list, while the remaining "CSE Fund" open positions with large unrealized losses are excluded. This has the effect of exaggerating the returns of the "CSE Managed Covered Call Selections".

I have attempted to model the "CSE Managed Covered Call Selections" returns of a diversified account over one year with the results: account value growth = closed position realized gain + open position call sales - unrealized loss = 22% + 8% - 20% = 10%. The stock market has also gained about 10% during the same period.

In order for a covered call investment account to grow by 3-5% per month, the covered call returns would need to increase significantly faster than the unrealized losses. So far, I have not observed this to happen with either the "CSE Fund" or the "CSE Managed Covered Call Selections".

Update January 19, 2007

The "comments" at the end of this review provide additional info.

1. Authors respond to the book review to clarify inaccuracies, and I reply. The authors state that the "CSE Fund" is closed and has been inactive for almost a year so it technically has no current account value, instead of acknowledging the $35K closing account value. I replied with contradictory evidence showing dates and statements to several client emails in CSE Weekly Cow Reports that the "CSE Fund" was open as recently as October 7, 2006. To the best of my knowledge, CSE has not officially notified clients of the true status of this 8-year project that has lost money despite earning 5% per month cash returns. You read it here first.

2. Posted the audio transcript for the four slides of the recorded 2-hour Introductory Seminar archived on September 13 2005 from the CSE website. You can also view the video excerpt and the final "CSE Fund" brokerage statement via the YouTube website; search for "CSE Fund". The authors enthusiastically promote the 8-year "CSE Fund". Why would they want to discontinue this compelling demonstration of the CSE covered call techniques?

Update January 16, 2009

Posted the monthly results of a model of a "CSE Managed Covered Call Selections" Statement that computes the "Account Value Growth" in order to measure the rate that we can expect our Covered Call accounts to increase in value over time. CSE discontinued creating new positions in November 2006 and claimed to be managing the remaining open positions to a profitable close. CSE has abandoned these positions, just like it did the "CSE Fund".

At -7% total account value loss over three years, the result contrasts with CSE's claim for these positions to generate cash flow of 3% per month and double the asset base through compounding every three years. The data demonstrates that CSE income has failed to keep pace with open position losses. The stock market has declined by 29% during this period.

CSE has reacted. The latest "CSE Fund" YouTube video shows that CSE has removed posted videos promoting the defunct "CSE Fund" with the message, "This video is no longer available due to a copyright claim by Compound Stock Earnings Seminars, Inc." Why does CSE not want you to view the videos? You have another chance to view them.

CSE started another managed program August 27 2007 which shows the same pattern of losing money and abandonment. See separate Amazon Customer Review titled "What Are Returns of CSE Covered Call / LEAPS Selections?"

Summary of CSE trading services process:
1) CSE promotes new service and sells to clients.
2) Trading performance gradually degrades to mediocre.
3) Service is eventually abandoned or morphed without a final report to clients in such a way that new clients are unaware of the previous service and trading performance.

There is a Yahoo Finance "compoundstockearnings" discussion forum with over 900 members, many of whom are current or former CSE clients. You can locate and join the forum by googling "compoundstockearnings". It's free. You can view the daily "CSE Fund Statements" folder in the Files area. You can view the actual trade data of the "CSE Managed Covered Call" positions in "CSE Managed CC Trades.xls". You can also read messages from current and former CSE clients about their experiences, and you can ask questions.

This book is basically the same material that Joe used to sell on his website a few years ago. Not much has been added. As already stated in previous reviews, most of the techniques have been around forever. The CSE fund was one of the big selling points on his website at one time and many people mirrored that account, as did I. It was his "show piece" to prove that his technique worked. Then one day the fund was mysteriously removed from the website, never to return. In my opinion, it was discontinued because it had lost so much value. You can sell calls, but if the value of the underlying stock decreases by 90%, then you still have nothing. I spoke with Joe's broker at OptionsXpress (for the CSE fund) and was told basically the same thing - that the account had just lost too much money. He told me that Joe was "just a good salesman". I traded with Joe for over 2 years. Most of his trades generated income, but the percentage that did not do well really lost huge amounts, more than enough to wipe out the gains. However, those losses were never documented on his site because he never closed them out. He just quietly forgot about them. I personally talked to both Joe and Aaron on the telephone about several of their positions that had "gotten in trouble" and neither one could offer any technique to correct the situation. For those of you who read the book and are thinking about the seminar - been there, done that, feel like a sucker. In short, the book does explain covered call techniques adequately - however, fails to point out the potential pitfalls and risks involved. Earning 5%+ in your investment account every month sounds too good to be true and it is.

This is a well written book that has several creative techniques for selling and managing options. It also gives valuable advice and tips for how to time new stock purchases so that the odds are in your favor for the price of the stock to go up. For that alone it is worth the price since I realized after reading the book that I had previously been buying stocks at the WORST possible time. A mistake I will not make again thanks to this book. However, I have just a couple of caveats I feel compelled to pass on. First, buyers should be aware that a solid understanding of these techniques will only come after studying and reading the book several times. This is not a quick 5 minute tutorial and then you're on your way to instant millions. It will require some time and dedication on your part to really absorb and comprehend the method. Second, the technique is not as safe or conservative as the authors make it sound. People considering trying this as a way to grow their assets or generate steady income need to keep in mind that in order to achieve the compounded earnings they state are possible, nearly all of your principal money needs to be tied up in the stock market, in individual stocks. As any investor knows, the stock market is a fickle beast and no matter how solid and logical the rules in this book may be, you will still be at the mercy of it's unpredictable ways. One of the first stocks I bought and sold a call on dropped in price by 75% three days later on unexpected bad news. The panicked selling was a complete over-reaction by investors and the stock has since recovered slightly, but it demonstrates the sometimes random and unpredictable nature of the stck market. It also highlighted the fact that their management techniques for fallen positions do not always work in every situation. If the decrease in price is too great and/or a stock becomes out of favor with investors, then the demand and price for calls on that stock will be greatly reduced and it will not be possible to earn any significant money off that position until it turns around (if it ever does). Finally, if there should be a major market correction any time soon, we will all be in a world of hurt, covered calls or no covered calls. These are perhaps obvious points, but ones that I think get glossed over and forgotten as people begin imagining future riches.

Bottom line: If you are invested in the stock market already and have the stomach for potential major losses (not because of using this technique but due to general stock market declines) then I think this could be a useful tool to have in your arsenal.

As an alum of the seminar , I can tell you most of the claims in the book are possible, but very un-probable. Markets are random and all of the technics Joe Hooper touts require you to pick a direction of the market. I have been to the covered call seminar and also the leap seminar(only because it was free with the first one).Joe Hooper is very arogant and self serving. If someone asked a question he didn't like ,he talked down to them so they would not ask again.
I have invested with covered calls for years.They are fantastic way to invest. But in my opinion, Hoopers way is just to make Hooper money with all of the subscription add-ons.My account balance does not lie. There is a much better way. Listen to someone singing Hooper's praises and you will find out they have not been using CSE methods for long, or somebody is getting paid.

I spent a full year actively investing a large account with the techniques taught in this book and in the authors' two-day intensive seminar. During this time, I lived and breathed this investing technique (much to the chagrin of my neglected wife and non-investing friends). I was sure I had found the holy grail of investing. However, after a full year, my account balance was about the same as when I started. Several acquaintances that started the technique at about the same time as me actually had losses of 5% to 25% in account value over the year.

Where was the 3%-5% monthly income promised? Interestingly, when income was calculated per the authors' method, I supposedly made about 40% during the year (about 3% per month). In the beginning, I was proud to claim I was making 3%-5% per month income per month. In fact, I responded in one of the authors' surveys that I was making 3% per month (a survey which they now proudly publish on their website). Why the discrepancy between actual account gain and the authors' measure of income? The authors record all transactions which generate cash as "income." Losses in stock value are not accounted for since "it's not really a loss until you sell the stock." Further, transactions which actually do generate a cash loss (e.g., "adjustment buybacks", etc.) are not subtracted from income, instead, these losses are added to the position's basis. Therefore, actual cash losses become a "paper loss" and magically disappear just like losses in stock value.

To be honest, the authors don't try to hide the fact that they don't consider paper losses when computing income. Instead, they maintain that stocks go up and stocks go down. Why sell the stock at a loss when it will probably regain its value in the future, and in the mean time, we can collect "rent" on the stock while we own it? We'll sell the stock one day at break-even when it regains its original value. Sounds like a great idea on paper, but unfortunately, it doesn't work that well in the real world.

Why doesn't the authors' theory work? The basic problem is that some stocks in your portfolio will lose a very significant amount of their original value and overwhelm the winners in your portfolio. In addition, to offset paper losses, it is critical that fallen stocks continue to generate income. In fact, the authors claim they don't worry about fallen stocks because after two years, while generating 4%-5% per month, you'll have paid for the fallen stock. However, when a stock loses 50% and more of its value, it's virtually impossible to generate 4%-5% of the stock's original value per month - it's going to take much longer than two years to break even. On top of that, even when a stock hasn't lost much of it's value yet, it's much harder to generate 4%-5% per month from fallen stocks than advertised. For example, the authors averaged just 0.6% per month on managed positions during the six month period for which I have data (Oct-06 to Mar-07).

On the authors' website they state, "Want Proof?", so here's some proof: The three stocks shown below were purchased by the authors as part of the "CSE Covered Call Fund" in 2005. These three stocks tie up 77% of the portfolio's basis and would still be owned today - well over two years later. With 77% of the portfolio now worth pennies on the dollar, the remaining 23% just cannot make this portfolio a winner:

DRL entered at $470.60. Currently trading at $17.76 (down 96%) (purchased at $23.53 originally, 20-1 reverse split in August 07).

SGTL entered at $24.89. Currently trading at $2.10 (down 92%)

FBP entered at $20.37. Currently trading at $7.37 (down 64%)

Want more proof? Look at the review by Carol L. Shoaff "sjcarol." She lists a large collection of stocks that Joe picked for her in one-on-one trading sessions that have fallen substantially in value - many over 50%. Again, because of the fallen stocks, her account value did not grow.

Want more proof? Look at my portfolio, look at the portfolios of my CSE investing acquaintances - despite computed monthly incomes of 3%-5%, our accounts didn't grow in value even after a full year of investing in a favorable market. During the same period, my S&P 500 index fund grew 13% in value. Which technique really made me money?

Additional note: I stopped trading with the techniques taught in this book in the summer of 2007. I went to cash and regrouped. At that point, I had numerous positions in "management." Here is the status of some of those positions - which would still be in management today - as of January 5, 2008. Look at the age and the loss percentage on these positions. This investing method is like trying to swim with a ball and chain clamped to your ankle.

Stock Basis Value Loss Age

CBK $22.65 $10.36 54% 386

HOV $35.27 $5.86 83% 296

IVAC $24.44 $12.53 49% 235

PMTI $39.75 $15.15 62% 265

INT $45.54 $25.61 44% 296

ACLI $30.26 $14.66 52% 235

SEPR $47.74 $26.90 44% 204

-----------------------------------------
Update 10 months later (October 10, 2008)

Stock Basis Value Loss Age

CBK $22.65 $5.63 75% 666 days

HOV $35.27 $5.20 85% 576 days

IVAC $24.44 $7.76 68% 515 days

PMTI $39.75 $10.74 73% 545 days

INT $45.54 $17.39 62% 576 days

ACLI $30.26 $6.55 78% 515 days

SEPR $47.74 $12.48 74% 484 days

I was sucked in by Hoopers hype and claims of 3% to 5% profits per month and initially the strategy looked good but after 8 months my account was down $20,000. It is impossible to manage a stock after it falls 50% although he claims he can make 5% per month. I have about other friends who had the same experience. What finally convinced me that this strategy is a loser is a review I found on You Tube about CSE Covered calls. Hooper bragged in 2005 that he could turn a $40,000 investment into $5 million in 8 years. He started in 2005 in April and in June 2006 he closed the fund with a value of $35,000. So much for his 3% to 5% per month profit claim. If he can't make any money on covered calls how can his clients expect to do so. He makes his money on selling seminars and monthly fees. Of course he didn't mention any of this in his book or in his seminars.

Update January 16, 2009

I have observed CSE for over three years, have taken the 2-day Intensive Seminar, and have subscribed to the Covered Call / LEAPS Selections service. During this time, I have observed the "CSE Fund" that lost 12% and was mysteriously closed, "Managed Covered Call Selections" that has declined by 7% in three years and has also been abandoned, and most recently the managed "Covered Call / LEAPS Selections".

CSE describes the "Covered Call / LEAPS Selections" service in the Saturday Cow Report, "The transactions below are ones executed by us. We also send these transactions out real time, as they happen, to our Covered Call / LEAPS Selections subscribers. Watching what we're doing in our accounts is a great way for clients to learn the practical application of the technique!"

The subscription service at $100 per month has previously been managed by Joseph Hooper. Hooper sent out emails to open and close positions. But he failed to perform any intermediate trades using the management techniques that he professed in his book and seminars, for clients to observe.

CSE hired Mark Sormberger, CSE's top trader who claimed to double his retirement account in 2006 trading using the CSE techniques, to assume responsibility for the "CSE Covered Call / LEAPS Selections" service beginning August 27 2007.

CSE emailed a "Special Announcement!!" to clients ...
"Mark will be dedicated and focused on these selections. Combine this with his track record of making 100% returns per year in his retirement account and this will have the effect of dramatically increasing the returns of the Covered Calls and LEAPS Selection Service!"

Mark has fully managed all trades of Covered Call & LEAPS positions and has emailed the management trades to subscribing clients.

After 17 months, what are the returns of the Mark Sormberger CSE positions?

CSE reports 3%-6% per month by defining "cash income" returns with "CSE Accounting". The realized gains are partitioned from the losses, and the gains are reported by CSE while "adjustment buyback" losses are ignored by adding to the cost basis. "CSE Income" will increase independent of whether we realize gains or losses. The more trading we do, the higher the "Income" gains are reported. If CSE were to deduct income losses from gains, then we could more accurately measure the effectiveness of CSE management techniques.

I have compiled the trades of all CSE Covered Call and LEAPS positions created on or after August 27 2007. A model measures cash flow to compute returns, and refrains from using "CSE Accounting" to adjust the cost basis with realized losses. Following are the CSE returns as of January 16 2009.

Covered Call positions.

Question #1:
What is the account value growth of a portfolio that invested in all CSE Covered Call Selections?
How does this compare with the overall growth of the stock market?
Answer:
The Covered Call account value has declined by 28%.
The stock market has declined by 40%, computed by averaging changes in $DJI, $COMPX, and $SPX.

Question #2:
What is the Income from selling Covered Calls on Stock?
Answer:
Income is the sum of open position income to date and closed position realized gain = 17% in 17 months = 1.0% per month.

LEAPS positions.

Question #1:
What is the account value growth of a portfolio that invested in all CSE LEAPS Selections?
How does this compare with the overall growth of the stock market?
Answer:
The LEAPS account value has declined by 76%.
The stock market has declined by 40%.

Question #2:
What is the Income from selling Covered Calls on LEAPS?
Answer:
Income = -10% in 17 months = -0.6% per month.

I have observed that "CSE Covered Call / LEAPS Selections" trade emails usually do not result in real money trades, so I conclude that they are virtual trades. CSE claims to put its money where its mouth is and walk the talk, but I am not seeing it.

Coincident with the October 2008 stock market decline, CSE is showing signs of abandoning these positions, just like it has done with the earlier programs.

Summary of CSE trading services process:
1) CSE promotes new service and sells to clients.
2) Trading performance gradually degrades to mediocre.
3) Service is eventually abandoned or morphed without a final report to clients in such a way that new clients are unaware of the previous service and trading performance.

There is a Yahoo Finance "compoundstockearnings" discussion forum with over 900 members, many of whom are current or former CSE clients. You can locate and join the forum by googling "compoundstockearnings". It's free. You can download Excel files that contain the actual trade data of the "CSE Covered Call / LEAPS Selections" positions created on or after August 27 2007. The Files area contains "CSE CC Trades.xls" and "CSE LEAPS Trades.xls". You can also read messages from current and former CSE clients about their experiences, and you can ask questions.

NOTE. I wrote this review on Dec. 20, 2007 and have no idea why it has this date on it) I am one of Joe's former students. I used his service for about two years and did one-on-one coaching with him for about one. Many turned out fine but way too many have lost a major part of their value. Yes, there have been premiums made on these but they represent a small fraction of the downside of these. Joe doesn't believe in stops. In my conversations with several of his more successful traders, in secret most use stops but can't really say that in Joe's presence. Also, yes, I did have a certain percentage return each month on premiums but my balance never ever once raised above my starting balance. Shame on me for not ditching this outfit long ago and let Joe get away with asking me and others leading questions for his endorsements that didn't clearly show the whole picture.

Just so you know, many of the posts are here because Joe sees a bad review and then he calls his clients up and keeps hounding them until they do it. Besides myself, I personally know of at least three others who have encountered this....Lord knows how many there actually are. Granted there are a certain number of faithful clients who swear by his method but Joe claims to have over 3,000 clients and odds are with any method, there are bound to be some successful traders.

Stock picks by Joe Hooper over the last two years.
SGTL purchase $17.05 now $2.01
AMD $24.15 now $7.20
BECN $22.77 now $8.48
ELOS $30.83 now $14.51
MOVI $17.25 now .06
IIG $25.61 now $11.77
INSP $34.58 now $17.43
MTH $66.62 now $14.75
RACK $54.19 now $9.96
SCSS $26.47 now $6.86
SNDK 60.58 now $34.81
TRID $30.28 now $6.09
VPHM $20.75 now $8.15
WIRE $35.73 now $15.99
XRTX $30.96 now $14.31

There are others but these are the ones that I have gotten badly burned on. It's going to take a long time to recover from this mess that I let go too long. Many people experience early success using his methods until the other shoe drops. Buyer beware!

I became interested in this book's dramatic claims because the forward was written by Kiyosaki, who has a pretty big reputation, and the book is published by Wiley, which seemed a decent recommendation.

I soon found out that the book was about $70 online. A bit later I visited Hooper's website, emailed a question and received a reply from him. I found out that his site supplies an $80/month stock screening service so one can know which stocks are best and safest to apply the covered calls and LEAPS method to. Ok, $80/month is not necessarily a deal breaker, if the method can generate 4% returns per month on one's capital. If the method worked, the breakeven point would be reached if one invested only a couple of thousand dollars in stock using the method -- the 4%/month on that single investment of $2000 would ongoingly pay for the $80/month subscription service. Any further capital invested would generate pure gravy. $50,000 in stock would generate about $2000 a month. So the $80/month subscription service seemed reasonable. Still, the discovery of the $80/month fee raised my suspicions.

So I emailed the site again to find out about their offer to use the first month of the subscription service for free. I wanted to know if one could cancel at any time during that first free month and never be billed any money. I thought I would get the free service for a month, and during that month test a virtual, fake portfolio of stocks with no real money invested, so I could see if the method worked. I also wanted to check whether there would be still other fees, or if the book and subscription would be all I needed. I had seen expensive seminars advertised at the website, and I wanted to be sure I wasn't going to wake up after paying for the subscription and book only to find out that one must also pay for seminars if one wanted to succeed with the method.

I didn't receive any reply to my email asking whether the first free month requires a commitment to pay for additional months, and whether anything other than the book and subscription would be needed. So I emailed again, making the email even briefer than the already quite short one I had sent before. So far, I still have not received any reply.

Does this failure to reply mean that Hooper or his staff decided it would be better not to reply to this sort of email, since they figured people asking the sorts of questions I was asking wouldn't get the book once we realized a subscription was also necessary, and wouldn't get the subscription once we realized a commitment beyond the free month was necessary, and wouldn't pony up for that commitment once we realized a seminar was also essential? Did they think I would only serve as a conduit for the negative information that each purchase of their product turns out to be only a fishing line to reel the customer in to the purchase of yet another product? Did they decide people asking the questions I was asking could only pass on the word that one cannot really test drive Hooper's method before putting up big bucks? I don't know. Maybe Hooper and his people are overwhelmed with email, though I rather doubt that's the reason for no reply. And I'm not at this point prepared to spend $70 bucks (or a whole lot more than $70, if the required commitment to the subscription is several months or a year, and seminars are necessary) on a method I can't test first.

Update: According to a comment made on this review (see the "comment" link just below), so long as one gets the book one can use the subscription service for one month free, without any further commitment. But is the expensive seminar necessary to succeed? As yet no answer from Mr. Hooper or his staff -- but maybe they are too busy to reply.

Second update: For the most devastating response to this book, see the reader review titled "Covered Call Returns via CSE Fund", by Investor 222, who attended one of Hooper's seminars. Read ALSO the comments on that review. It seems that Hooper used to have a showcase fund intended to demonstrate the effectiveness of his covered calls technique. But according to the review by Investor 222, and as is demonstrated by the dialogue in the comments following Investor 222's review, HOOPER'S SHOWCASE CSE FUND UNDERPERFORMED THE STOCK MARKET! Hooper has since closed it down -- with the utterly lame excuse that the problem was high commissions being charged per trade. So Hooper is supposedly going to get around eventually to transferring the showcase CSE Fund to a low commission account. As if that would solve the problem. I wouldn't hold your breath waiting for that showcase account to reappear. One can only conclude that even the ultimate authority on the technique can't make it work! So much for 4% returns/month! So much for 3% or 2% even! Hoooper himself comments on Investor 222's review, but the most Hooper can say is that Investor 222, by using the technique, "made money." Whoopie-doo. That doesn't matter much, since Investor 222 made FAR less than what Hooper's technique promises, and even made less than the broad market! For that we need to lay down $70 and buy Hooper's book, get his screening service, and attend an expensive seminar? Might as well just invest in a broad-based index fund and apparently we'd do better. (Easiest way to get to Investor 222's review and the comments on it and read them for yourself is to use the "search customer reviews" box, which will appear if you scroll up and look at the right side of the screen. Just paste the review title -- Covered Call Returns via CSE Fund -- into the "search customer reviews" box and click on "go". At the next screen, click "read more.")