Should You Invest In Derivatives
Does the word derivative bother you at all? I know it bothers some people. Understand that derivative is a word that sends chills up the spines of most people. I want you to get used to that word. Don’t react to it as a robot or as a member of the herd. The word derivative just refers to something that’s actually made up of something else.
For example, orange juice is a derivative. So are the structured notes I just described. So are convertible bonds, so are warrants that are simply ‘equity kickers’ that we use in the best private deals. So are mortgage bonds that have made me richer than I ever thought I might be. How? They helped to keep me out of the stock market when almost everybody else on Wall Street was on an eight-year campaign to basically put themselves in the poor house.
The plain truth is, I have tools available to me that allow me to make decent - not exciting - but decent money, so I’m able to be very choosy about the stocks I invest in, and I can afford to wait until the moment is just right.
*Excerpts from "A World without Borders" by Dan Frishberg
