Hi Bobby : I'v done the same thing, try to focas on to many,
as for longs hind sight is 20/20.., no more longs unless they
have options..if I really like a company and it has value, I say
what would I be willing to pay..if she is about there..I can
( as with good Company I belive in averaging down if she falls )
I averaged down 3 times with AMD..more than I planed on but it
worked out..better than most.
Any way, say I like her at 12, but she is 12.5...but I still think
she will go up..and If I get in now and she has a tumble I will
wamnt to double up at 10, to reduce my average..( planing ahead )
for the what if..so any way I buy at most half and save some cash
to double up with...I call the broker and say sell 500 puts of
AMD10, for sept. and take what ever I get for the puts and apply
to a buy of 500 amd, this reduces my in cost..up front..and I don't
buy any more untill thoes puts expire..if she does tumble I more
or less already have my buy in at 10..if she goes up..after sept
and I like her I can simply sell puts at 12.5 , and use that as
a dividend..as long as I'm willing to buy more, at that price..
like if I sell puts below my price..I'm getting an option to
buy providing she falls, but if she don't I'm making a dividend,
or at the same time I could sell thoes puts, and use that money
to buy some puts for insurance..like she is 14.5 now,,I buy 15
puts using the money I got from selling the 12.5 maybe having to add
a little, but my profit is locked in, if she floats down to 13
I can still put it to someone at 15..and buy at 13, there by buying
cheaper than I sold...on one hand it can take some profit out,
insurance don't come free, on the other you have the benifit of
having gotten in below market..and making your self a box to work
in..all that said it's for sure the way I'l go on any longs in
the future..( planing )..now for the momentum plays the pure
sport of gambling..just buying puts, or calls is the way
I bought calls on Phillip Morris Today, short term at 90 cost me
4 bucks, as I think she got oversold..by friday at 3pm I got to
sell them or take the stock, if she bounces up to 94.5 I'm even
commisions and all, if she goes below 90 I loss it all, but as long
as she is above 90 my calls have value..and I can buy in at 94
come friday if I want to..well really 94.5 with comish..or
sell them for what ever they are worth..any way I would not likly
play a 90 stock except for the options..gives one a few days to
think about it to..so at most I can lose $4, thats not as bad
as them who had it fri at $115..some of them jumped out to soon
MO does a lot more than make cigs. got to check out her dividends
heck at most she might spin off the cig stuff, which I think she
should..
o well I'l see
jim |
