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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: Mark A. Forte who wrote (3708)9/17/1996 9:50:00 PM
From: E_K_S   of 42771
 
Hi MarK: That's the risk you take with covered calls. I said if you want to generate income. What I have done is sold covered calls at different strike prices and time periods but on only 1/2 of my holdings. I own too much of this stock but am able to generate income while I wait for the turn around. Look at it as if you are "renting" your asset. Nothing is free in life but I can generate some income while I wait. If there is a buy out, I will be happy and my portfolio will also reflect the gain. No buy out, Novell is not a dead stock in my portfolio as I can generate some income.

Your approach is good by buying (or renting) the asset through February. As a value investor, I buy the asset and rent part of it out. But in any case Novell stock can generate income but you do indeed give away your upside gain over the period you "rent" the stock out.

EKS
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