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Technology Stocks : Intel Warrants? Buy, Sell or Hold?
INTC 41.35-0.4%3:59 PM EDT
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To: Richard Forsythe who wrote (17)6/4/1996 10:13:00 AM
From: Andrew Chow   of 36
 
Not knowing your risk tolerance or the composition of the rest of your portfolio, it would be irresponsible for me to recommend a course of action. Remember that stocks are risky, tech stocks are riskier and leveraging tech stocks is downright wild. Sure I like Intel, I've owned it for years. And if you hold it for a long enough time it has consistently outperformed the broad market. But this is also a stock that historically has gone through long stretches of time just treading water. From 1/91 to 12/91, price return was 0%. Need a closer time frame? From 12/93 to 12/94, proce return was 0%. How about something even closer? From 5/95 to 3/96, price return was 0%. Of course there were also one yr time periods where the stock doubled. But you have to look at yourself honestly in the mirror and ask are you prepared to absorb a year with no (or negative) price appreciation on the underlying stock and your borrowing costs accruing? If you're SURE you won't panic and sell at the most inopportune moment, then feel free to load up the truck. Just make sure you're being consistent. In other words it makes no sense at all to buy a stock on margin and still have $5000 in your checking account. It makes no sense to buy options and still own CD's. Leveraging one part of your portfolio while holding cash elsewhere is illogical (unless there is some tax motivation) and implies the portfolio manager (YOU!) has not fully thought out his/her position. Good luck!
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