Kemble: Re No AOL
As one who deals in a lot of options (proportionally) I have to
have some concept as to what is going on in the market. Does not have to make sense to others, but it gives me a chance to learn in retrospect any errors made.
So the picture I have is that the great runup in the Internuts and Dell in January represented a vast hoard of dollars waiting to be tapped by powerful investors/market forces if they could bring the sector down. With the Dow so high, it was easy to frighten investors
over the 'bubble' and the high P/E's. Plus CPQ's problems and the
advent of the cheapy computers could be used strongly in arguments against Dell.
There are always many ways to tap the money even if an institution wants to hold the stock long term. One way is to sell covered calls (or buy puts) and then 'take her on down'(the stock)
at options expiration. Can even repeat the process each month.
That's the one most obvious thing which has (probably) been happening consistently with many of these stocks since February, with a recovery between the options dates.
Without some similar thinking, I would have been destroyed
by those Feb, mar, apr, may calls (which I mostly avoided)
instead of just taking the standard(haha) 40% hit.
If there is any truth to what I say, then a company's actual
performance or future prospects , even as good as Dell, are being disregarded in the overall operation. (I don't include Hwp or Ibm).
Summary.
1. I am going to wait for the tide to change, until whatever operation or manipulation appears finished before getting back into the internuts.
2. And it looks like one more time on the Dell June options-
flatter than &^%% right thru next Friday at around todays price.
Recovery should start the monday after that which rather agrees with WBM's 'late June' comment.
3. Will count on Michael to put up a strong fight and pull some rabbits out of the hat as we approach the shareholders meeting
Regards Sig (am just talking here and can be wrong (or wronger) HEHE, as any poster who tries to time the market)
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