Hey Frank & Rocketman--it's not either/or, black and white.
Jill, I agree. My posts were not refering to the use of options to either hedge or to increase your leverage, as you know I have done both. I was refering to those who link the iherent value of a company to its day to day price swings. That is a sure fire way to buy at the top and sell at the bottom. I know you are not one of those :-)
When one has good companies, time is of the essence to reach our goals. Whether that is done through accumulating common, or using leaps, or using option strategies to build leverage, those are only tactics. The goal is the same, to build a long-term portfolio. The only time I see where selling is appropriate for these companies is (1) if one is a good trader, and those are few and far between, or (2) if the fundamentals change for the negative. Case in point, AOL. I take no issue with those who have sold their AOL because they don't like the direction the company is taking. Myself, I think it is a great direction, and I have accumulated. If I thought otherwise, I would have sold. That is a decision based on fundamentals. But to leave a stock because it goes up 5, 10, or 20 percent in a day or a week is nonsense. |
