The Writers Coin

First we had Blackberries and then we had iPods and iPhones. Now it’s the Kindle—is this the next gadget that will steal our hearts (and our money)? I certainly think so, and I’m going to tell you why.

Who am I to say what’s going to be the next big thing? First of all, I’m a gadget hound—I love reading and talking about the latest tech toys around. And second, this device just happens to fall in the domain of two of my passions: reading and writing.

This story isn’t about paper book vs. e-book. It isn’t about the inevitable fate of paper books. It’s about why I believe the Kindle is the next “it” gadget.

The Bus Effect

I’ve experienced the bus effect two times in my life: the first was with the Blackberry and the second was with the iPhone. So if I’m right about the Kindle, it’s in some very elite company.

I knew a few people that owned Blackberries, but I didn’t understand why: they were ugly and the screens were lame. But those few people that owned them felt pretty strongly about them, and that stuck in my head.

Then I saw someone on the bus using one. As most Blackberry users, they were in their own world thumbing away at their ugly phone.

Then I saw another person using one on the bus. And another. It happened very gradually until one day it hit me: Wow, look at how many people own these things!

Along Came the iPhone

Same story: only I followed this one from way before it launched. I read everything I could about it because it sounded like a device unlike any other. When it came out, the tech world was in a frenzy.

Here was this cool, expensive, hip phone that had one button. You controlled it by swiping your finger across its screen. It was like magic.

I remember the first time I saw one on the bus—it was like spotting a rare bird in the wild. I almost snuck up on the person to get a good look—I didn’t want to scare it away. It looked awesome. It looked sexy. It made me want one right away (I resisted the urge and got a G1 instead).

Then I saw another person a week later using one. And another. Nowadays, 90% of the phones you see on the bus are iPhones. They’ve become as ubiquitous as the old Motorola RAZRs.

Kindle’s Time is Now

I remember the first time I saw a Kindle too: the white finish and the sleek design. I always thought that e-readers would be a niche product that only nerds like myself found interesting—and even I wouldn’t but one. The general population, I assumed, would stick to regular books.

But Amazon has pumped some major marketing muscle into the Kindle, and by taking a page out of Apple’s book they’ve managed to create demand out of thin air for the Kindle.

Does this mean the Kindle is on its way to outdo the iPhone and Blackberry? I don’t know, but the sales numbers are looking pretty damn good.

The one reservation I have has to do with people: do they really care this much about reading books? I think the answer to that one is “no,” but there are enough people out there that do care to make a huge difference for Amazon.

Do you think the Amazon Kindle belongs in the same conversation as the Blackberry and the iPhone?

What’s your pick for gadget of the year?

(by the way Amazon has free 2-day shipping on the Kindle from now until Christmas!)

A few months ago I decided to try different things to make some extra money. Since I love books, I figured I’d give selling used books a shot. My first try ended with some people calling me a thief. But after that I went to a used book store hunting for valuable books that were being sold on the cheap.

The idea was to buy them and then sell them online for a profit.

It hasn’t worked out so well: I spend around $40 and sold one of the books. I did make a profit off it, but the other books haven’t sold, so I’m in the hole.

But one of the books I found was a first edition copy of Michael Lewis’ The Blind Side. The book is also autographed by the man himself, who just happens to be an idol of mine.

The Dilemma

Now that the book is being turned into a big Hollywood movie (comes out on Friday) and there is a lot of chatter about Lewis’ book, I figured it would be a perfect time to do my very first giveaway on The Writer’s Coin. I could create some buzz on the site by getting people to comment or subscribe to my RSS feed, or something.

But then I opened the book up and flipped through it a little—it’s in fantastic shape. It’s autographed by the man himself. It’s about Michael Oher, whose story is unbelievable and who may turn out to be a force in the NFL (he’s a rookie this year).

Hell, he may turn out to be a monster in the NFL, one of the greatest ever. And that means a signed, first-edition book about that player’s life written by one of the greatest writers of our generation would be worth quite a bit of money down the line.

You see where I’m going with this?

Give Away or Invest?

For now I’m keeping the book, but I’m curious to hear what other people out there think about treating this book as a potential investment. It feels like I have a penny stock that I think might shoot up in 10 years, but that’s quite a long shot.

If that were to happen, I would look back at the time I gave the book away for a few extra RSS subscribers and think to myself, “What the hell did you do that for?”

A few months ago I casually mentioned I was reading Understanding Options, a great introduction to the world of options trading. A few weeks later, Michael Sincere—the author, left a comment on that post thanking me for the kind words (it’s a great book).

So I got in touch with him and he graciously agreed to let me interview him via email. Before we get to that, I want to say one thing to people that are scared/skeptical of learning more about options: they are not as complicated as you think.

You still have to have an idea of what you think a stock is going to do, but options give you the flexibility of playing that idea in a variety of different ways.

On to the interview:

How useful do you think technical analysis can be for the beginning options investor?

The beginning options investors, after reading my book, will realize the importance of the underlying stock when deciding when or if to buy or sell options. Therefore, technical analysis is extremely important, but not mandatory. That is how the options trader will determine the timing and direction of the underling stock. Learning technical analysis and how to read charts is essential whether investing or trading stocks or options. It is another piece of the puzzle called the stock market.

If there’s one thing you would like readers to take away from your book, what would it be?

How about two things? First, the advice given to me by some of the top traders, and I agree, is to start small. Begin by only trading one or two contracts when first starting. And you should do this for as long as it takes until you gain experience and confidence. I’ve talked to professional options trainers who don’t let their students make a trade for the first year! The second piece of advice readers should take away from my book is to quickly take money off the table. With stocks, you have the luxury of time. With options, you don’t. When the call or put price spikes up, take the money and run.

What was the toughest part of writing the book?

The toughest part of writing the book was making sure that all of the information was correct. Options have their own particular language and there are many exceptions to the rules. So after the book was written, I gave it to a couple of true options experts who went over the book in painstaking detail. I quickly learned why options have a reputation for being “rocket science.” I had to take what the experts told me and decipher it so the novice options trader could understand it. Believe me, that wasn’t easy!

How do options fit into the current market climate?

Options fit in every market environment. But right now, if we can get through September and October, it’s possible the market will go much higher, especially as the stimulus works its way through the economy. Others, however, might disagree. Therefore, you can buy calls or puts depending on your view. The beauty of options is you can make this play without risking a lot of capital. On the other hand, because it’s not easy to get the timing and direction right, many people end up with a handful of worthless options. So although risk is limited, you can lose your entire investment. This is why it’s essential you read as much as you can about options before trading
them.

What type of person do you think should consider learning about options?

Personally, I believe everyone should learn about options, assuming they have the time to devote to learning how to use them properly. After reading a book like mine, or others, you can determine if options are for you. Anyone who is actively involved in the stock market, whether conservative or aggressive, can find a way to use options, especially to reduce risk. But if you are not an active investor or trader, then you don’t need to trade options, but you can learn about them.

I just read Understanding Options, which book would you recommend to continue my options education?

The book that I would recommend is Mark Wolfinger’s book, The Rookie’s Guide to Options (WA Publishing, 2008). My book is ideal for someone who has little or no knowledge of options. His book should be next. He also has an excellent blog aimed at options traders, . In addition, be sure to check out the website for the OIC (Options Industry Council). This site if filled with useful information.

Anything else you’d like to add?

I am sometimes amazed that people all over the world write me with questions about options. Many people think that options are confusing and risky, but the more you read about them, the more you realize they are not dangerous — as long as you use them properly. Options got a bad name because gamblers bet their entire portfolios on a single trade — not a smart move! But when options are used to enhance a stock portfolio or for insurance, they really are brilliant. The best part about trading options is you know the maximum loss before you make the trade. Many people don’t know that. Finally, thanks for the interview and I’m really glad you enjoyed my book.

One Last Thing

Just want to add one thing that I took away from this book to anyone that’s interested in options: make sure you have a plan. This book drills it into you time and time again, and it makes complete sense. Don’t just make a trade and cross your fingers, have a detailed plan of what you’ll do if you’re right and what you’ll do if you’re wrong.

Hope is not a plan—not in the world of stock and options, anyway.

I love to read and when I find myself in a creative rut, I usually reach for one of these books to help get me out of it.

A Moveable Feast

You get to enjoy Hemingway’s legendary sparse writing as he looks back to his days as a young, happy man in Paris. He goes to cafés, he writes, he talks about writing and about the city. It’s part biography, part writing clinic, part ode to Paris. And I was lucky enough to first read it as a young man in Paris myself. So every time I go back and read it I feel like I’m back walking the banks of the Seine thinking about everything that’s possible.

A Supposedly Fun Thing I’ll Never Do Again

I’ve said it before and I’ll say it again: this was the book that got me turned on to writing. After I read it I felt like any topic of any kind could be made to sound interesting and exciting—that’s how good David Foster Wallace was. He writes about the most disconnected subjects you can imagine (tennis, TV, going on a cruise) and manages to make them all funny, interesting, and entertaining. No small feat.

The People of Paper

Talk about an experiment in storytelling. This novel is about a writer writing about a town that is trying to rebel against the writer. If the story itself sucked, than the experiment would be just that: an experiment. But the story is entertaining, the writing is solid, and the way he puts it all on paper is pretty awesome. Especially when one of his characters breaks through the page and into the writer’s room. Talk about a meta moment! Oh and the hardcover book is the most beautiful book I own (courtesy of the folks over at McSweeny’s).

On Writing

Whenever I feel like giving up the whole writing bit, I go back to this book. I remember reading it for the first time (also in Paris) and being shocked at how motivated it got me. I was never a huge Stephen King fan but this book is a must for anyone interested in writing. You absolutely have to own this book. It’s part biography and part writing advice, but it’s all good stuff. Even if you hate sci-fi and think his books are odd, this one isn’t. This one is worth several reads.

Brief Interviews with Hideous Men

My favorite book from my favorite writer (DFW again). You’d think it would be hard to pick a favorite from DFW, but this book of short stories is actually a pretty easy call for me. He does a lot of experimental stuff in this, and it all just absolutely kills. The one problem is that, after you finish, you’ll wonder what else there is to innovate on and if anyone will ever come along to match him. Makes his death even more depressing. He has the ability to find that bit of dialogue or voice that everyone can recognize and identify with.

Brief Wondrous Life of Oscar Wao

One of my favorite novels of all time. Diaz has managed to tell an epic story and to weave a whole bunch of background on his country, his people, and his culture. I’d love to do the same one day. Middlesex used to be at the top of my list, but this book came storming along and kicked its ass. Diaz takes no prisoners, makes no apologies, and tells his story the way he wants to tell it. I salute him.

What books have inspired you?