Lynn Carpenter Will Introduce Herself, Thank You

On most websites, someone will write a third-person biography of all the characters as if they were out of the room.

Let's just skip that sham. I'm in the room with you. When you subscribe to The Optionist, it's you and I in this together.  So I'll tell you about me in my own words.

Background? Probably like yours. Business.

Investment Background

I learned the trade with a lot of hard study and practice. It's not in the chromosomes.

I didn't buy my first stock when I was 12. I was in my late 20s before I made my first investments.

And I didn't study finance in college. I majored in English with a minor in Linguistics. Then I went on to Linguistics again as a grad student.

Go ahead: ask me about the phonology of Arabic loan words in Swahili. That's the dissertation I never finished although I completed the rest of my doctoral requirements.

But it turned out that I had an affinity for investing. I owe that discovery to Julia Guth for hiring me in the early 1990s at Oxford Club. And most particularly to Chris Weber, a hugely talented private investor, for adopting and mentoring me.

In 1999, Chris asked me to join him as co-editor of The Fleet Street Letter. Chris went on, but I stayed.

In those 5 Ohm years, Fleet Street has consistently beat the market by large margins. It remained very profitable through the bear market and out again, with a 22% average return per year even when the S&P was losing 40%.

In 1999, I took over a foundering tech stock trading service. I quickly revamped and renamed itoprobably surprising the heck out of the 30 subscribers who were still sticking around.

I dumped the tech speculation and began trading options on stocks with good valuations. Just in time to avoid the great tech meltdown as it turns out.

The service became the Contrarian Speculator, which I ran from 1999 to early 2004. Contrarian has a long-term success rate of 67%, hitting 70% for some stretches.

If you're gulping, let me tell you that in options that's outstanding.

Many professionals survive year after year with a consistent 40% success rate. In options, you can be right about the stock and still get ambushed as time value evaporates. The wins overpower the losses if handled right.

But anything above 55% is a sign that the results are not random. The system is working and will make you money if used correctly. The key to making money is to manage the trading, position sizing and exits to cut losses and enhance what's working. That is part of The Optionist.

By the way, my accuracy in predicting the short-term direction of the underlying stocks exceeds 80%. Many Contrarian Speculator subscribers chose to use the service to trade the stocks instead of the options.

You could do the same with The Optionist. That's a choice I purposely built into Contrarian to accommodate different levels of risk. And after watching that work, I decided to incorporate many more risk control choices into The Optionist.

So why did I leave Contrarian and start my own options trading service? The most basic reason is that trading requires concentration. And if you are going to be trading and advising others you owe them intense concentration.

In a large corporation, there are unavoidable meetings, calls, visits, marketing copy to review (and rewrite), endorsements to write, guest essays to deliver, new employees to trainOe it's endless. And it all goes on between 9 and 5, which covers the time you should be focusing on the market.

That works fine with some services, especially a newsletter like Fleet, but not for the level I wanted to step up to in options trading.

Now I don't have to do that stuff while the market's open, or not oftenOe or a lot of meetings, thank you. So I can add the additional services I've been wanting to and increase the trading choices for you.

Deep BackgroundoBefore Becoming and Investment Writer, IOe

Some people say I have a natural talent for this stuff. That embarrasses me. I hated to even write that sentence, but it's an issue we should talk aboutOe

I don't believe in natural talent when it comes to investing, or to intuition. That's why I believe you or anyone can do it well with enough study and work. Intelligence, steadiness and work are all you need. And if you can pay someone else to do the workOe

Use what you know. And learn the rest. Everything I had done before I began writing an investment letter is part of the success I had at Fleet Street Letter and Contrarian Speculator. It will be the same for you.

You have the basicsOe my experience as an investor and trader.

But like you, I didn't start there. I fully believe that bringing the same habits that make you a success in business or managing your life will serve you as an investor.

Confession: Before getting into investing. I was a Washington, DC-based consultant for 10 years for a boutique company called JT&A. I did some additional stints on similar work for an engineering firm in Pennsylvania and another in North Carolina. Another four years.

JT was the phenomenal Judith Taggart, my former journalism professor and dear friend. As our first hire joked, Judy was iJT,i and I was i&A.i

But we sure did growOe our clients eventually ran to the Federation of Republican Women, the Republican National Party (did I mention that Judy was connected?), the U.S. EPA, the President's Council on Outdoor Recreation (that would be President Bush the first), the President's Council on Environmental Quality (that was under Presidents Carter, Reagan and Bush), the U.S. EPA, the Department of Agriculture, the U.S. Army Materiel Command (yes, it is spelled materieloit means supplies), the National Council on Secondary Education, U.S. AID, the Tennessee Valley Authority, Northeastern Illinois Planning District, some I've forgottenOeand a host of nonprofit associations including National Rural Electric Cooperatives, the North American Lake Management Society, the Society of Value Engineers and Women in Development (international development, that is).

We did public relations, lobbying (called education), ran conferences, recruited and managed membership. We also wrote books, pamphlets and newsletters, educational seriesOe you name it. Turnkey management.

With such a disparate group of clients, you quickly become adept in figuring out a lot of technical information and different businesses. Plus, I was involved in marketing JT&A as a proposal writer as well as inventing and incorporating a new business called Career Connections.

For that one, I developed a series of seminars eventually presented on 130 college campuses and a workbook that was bought by Peterson's Guides, the folks who publish college directories and such.

I also helped develop a computer based job matching service that Peterson's also acquired and has continued to develop to this day. Only there was no Internet when I began the service. It was a daring new concept. We got a handful of Fortune 500 companies to test the first version for us. The Peterson's picked it up. Man did I miss out on that one. Just think, I could have been monster.com if I'd been smarter.

Figuring out investments wasn't that hard after working with guys who talked fluid dynamics or value engineering or how to work with African governments. 

And evaluating a company on its fundamentals was just an extension of doing five-year budgets, cost analyses, pricing services, hiring subcontractorsowhat they call outsourcing in industry. I can do a valuation.

There you have the outline. My whole career, except for some brief early periods in a Fortune 500 insurance company, an interesting year as a purchasing manager for an industrial tool supplier and some time as office manager for a jewelry wholesaler.

On the personal level I am very lucky in my marriageoto my best friend and partner in work as well, Andy Carpenter, editor of The China Club and Journal of American Finance. Andy and I were good friends for 12 years before our first date. Big surprise to both of us.

As president of Integrity Publishing, which officially owns The Optionist, Andy also is my boss these days Oe a comeuppance he only dreamed about for many years. See what happens if you plan and wait?

We have two outstanding daughtersoDawn and Faithoand three grandsons so far. Of course, I'm only 36Oe I was married when I was 12. You don't believe me? Well, you just might make a good options trader.

Andy and I sail a bit, but I don't play golf with him and he refuses to go to a fabric store or yarn shop with me. We do Home Depot together.

We cook, we gardenowe had to if we ever wanted to taste a real tomato again. And we both play guitar. He does it pretty well. I do it badly. He plays rock and blues, I murder some jazz.

Neither one of us can sing, but he's better at that, too. I like to hike and campoin a tent, with no electricity or RVs in my sightline.

Andy has indulged me, but usually I take Faith. We play he-woman, hike, cook outdoors, don't wash much. So far, nobody I know has seen me in this state. Dawn's tied down with young ones at the moment, but we'd love to get back to it. She's a little cooler than Faith and I and would probably insist on a daily wash.

Andy hotels. I always leave the travel arrangements to him. Otherwise we'd stay in Motel 6.

Mostly we work. Andy asks me to help him out with the research and I lean on him for marketing. If I'm not working, there's a 70% chance I'm reading something. AnythingOe mysteries, classics, history, plays, psychology, philosophy, natural science are favorites.

Andy gets involved in politics from time to time as a consultant. I stay on the periphery. Got a good dose in my Washington years, and while it's exciting, I find the constant hum of a campaign draining. As you might guess, Andy is the extrovert in the family.

And why is the service called The Optionist? I asked Andy to help me come up with a name that didn't make what it did a mystery.

The trouble is, so many names are already taken, as well as the good web addresses. Andy invented the word Optionist, and I loved it. Just like The Shootist. I am big fan of the Duke, love those old John Wayne westerns. But only after market hours.