Value Investor Writing Put Options? A Heretic!
When I first thought through the Put Writing strategy, what struck me was that Put Option writing gave me an opportunity to buy stocks below market, which gives me an even greater margin of safety. Furthermore I will be paid to wait, with time decay working in my favor. Since 95% of options eventually expire worthless, it was no surprise to me that when I eventually converted this strategy into actual trades; they turned out to be high probability trades.
On reflection, this strategy leans more on Benjamin Graham and away from Buffet's thinking. It is more cigar butt investing, more on valuation and less on moats and buying great companies. This strategy requires more diversification, less emphasis on circle of competence. Important thing is that it works.
Not A. Lemming