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Politics : Ask Michael Burke
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To: TRINDY who wrote (68809)10/7/1999 6:27:00 PM
From: Knighty Tin  Read Replies (3) of 132070
 
Trindy, I certainly subscribe to some of the nuclear winter concept of Fleck and Fred Hickey, but don't think you have to believe in it to hate the boxmakers. Everyone has boxes now and the new ones simply aren't that much better. It is a low profit or no profit replacement market that is going to get tougher every year from now on.

I don't short stocks, except in hedges in my income portfolios. I buy puts in a 90/10 program instead, preferring to live to fight another day when I get a turkey like MU that doesn't go to $6 when it should. <g> The 90 is 90% money markets and 10% is the maximum annual allocation to long put options.

I think Gateway is much more vulnerable than Dell. Dell is way overpriced, but they make a halfway decent box and have not made the silly mistakes GTW has made. Both are expensing their balance sheet rather than recognizing costs as they are incurred. However, Gateway has the added burden of making low-grade boxes at high prices. That hasn't hurt them yet, but it has to, eventually.

Dell is more vulnerable to the nuclear winter scenario, with its business box approach. My problem with that scenario is that folks may simply say it is a one time event and ignore it in the stocks. They could wait for a couple of quarters to see Dell rise from the dead instead of dumping it with the smart money.

So, I want to own puts on these two bowwows and IBM. I am expecting to be fully loaded by about mid November.
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