If he had done that , then his book would have been about gambling, not investing. In any case, it is avery flawed book, because he did not reveal the whole story of how he was able to retire very early, which was what the book was supposed to be about.

Additionally, he has a credibility problem because he refuses to admit his original strategy was flawed, even as he abandons it. It’s one thing to sell books telling people to invest 100% in divident paying stocks and hold them forever regardless of the market, it’s quite another to claim that’s still a good strategy after having done a complete 180.

Not to mention that I can’t see ever taking advice from a guy who comes up with his strategy for dealing with a falling market after the market has fallen 40%. The guy who made billions by short-selling mortgage CDOs before the crash is worth listening to. Not so much the guy saying “I just lost hundreds of thousands of dollars in the stock market, read my book to find out how!”

What Foster is currently doing I consider to be very risky – even more so than how he presented his strategy to new investors in his first book. Investors need to realize that with naked puts you’re taking on 100% downside risk with 0% upside and only collecting the equivalent of a 1% premium (based on what his current option portfolio consists of).

I can’t fault him for selling out of the market to protect his capital, but what he’s currently doing, IMO, is much riskier than his earlier strategy.

Fred