konrad, Ibexx, jmac and some others,
So you seem to be in the camp of do nothing about the short term, but
be confident that in the long term Intel, CSCO, and technology will prevail. I do agree with the belief that in the long term technology will prevail, and that these two companies will be leaders, but as to the first premise "do nothing", I'm not so sure.
Remember, there is a chance, you all know, that we may be tested on our convictions to that which we are stating here now. It may not be so easy to remain committed to this non action approach if a 1987 type of correction were to occur. However, it certainly is better to think about "what if?", now, during relative calm, rather then later when conditions may not be so ideal for rational thought.
Others here, sometimes jmac, have advocated a strategy of selling Intel Calls. I would therefore like to repost the following, which was written exactly a year ago.
Ray, this one's for you. Thanks.
To: Duncan Campbell (649 ) Feb 15 1996 11:34AM EST
From: Jules B. Garfunkel Reply #652 of 9834
Duncan and All,
I have held Intel since 1987. In earlier years, I would try to pick high and low swings. I remember at the end of 1992, in preparation of being out of the country, (to Eastern Europe, which had poor communications), for a month, I sold covered Intel calls for $5. They were deep out of the money at the time. By the time I got back, Intel had gone up 22 points. After watching for it to pull back, which never
happened, I finally covered at 29. It was a very expensive lesson for me, although, having bought back the Calls then, I am way ahead now.
As I wrote the other day, this stock, a year from now, will be much higher then it is today. The trouble with investors today are that they have become very short term myopic. Having been a sell side analyst myself, years ago, I can tell you that the analysts today have become too concerned with churning accounts. Seldom do I read of analysts reporting on the very healthy long term prospects for Intel. Consequently, you get investors like Sal who play the game of trying squeeze out every penny in the short term. That is not to say that Sal is wrong, but as a long term investor it is just not my style.
Nor am I good at picking swings. The major problem with this type of investing is that it becomes a game of predicting WHEN Sell Side Analysts will report on what you all ready realize, and how the buy side is going to react to those reports. I much prefer to analyze a company and it's industry fundamentals, then to try to figure out the irrationality and unpredictability of analysts.
But, as with any of my posts, I may be all wrong about this.
Jules |
