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Technology Stocks : Dell Technologies Inc.

DELL 133.35

+0.1%

Nov 28 9:30 AM EST

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To: Meathead who wrote (132526)	6/12/1999 9:47:00 PM
From: Chuzzlewit	Read Replies (4) of 176387

Meathead, thanks for an incisive post. I think you should repost it on some other threads. I stopped posting on the AOL thread because of the flaming I received back in February/March when I was trying to warn people away from momentum investing in AOL. I have a long position, but when the price began to become stratospheric I started writing calls. And when the price hit $175 I wrote October $130s. I am not posting this to gloat. Simply, I am trying to point out how foolish and dangerous it is to play the momentum game. What will happen to those people who are leveraged to the hilt if we ever see a bear market? Even a mild one, like 1994, will wipe a lot of folks out. And the sad part is that there is no need for that to happen. If people paid at least some attention to the price of the stocks they are buying in relation to the growth prospects they might avoid some very costly mistakes. That was what prompted me to get out of CSCO at $118. That was what prompted me to warn people on this thread when started moving over $40 in anticipation of Q4 earnings. So, at the risk of offending some of my friends on this thread, let me reiterate some basics: 1. Maintain a well-diversified portfolio of at least 12 - 15 equities; 2. Don't try to time the market -- hold good quality companies for the long run; 3. Avoid margin -- it is a killer in down markets; 4. If valuations get insane consider exiting or hedging by writing deep in the money calls; 5. Exit a position when the long-term fundamentals become negative. I am sure that people can add more items for prudent portfolio management, but I think these 5 rules will keep most people out of trouble. TTFN, CTC

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