Message #34343 from Jim B at Feb 18 2000 12:38PM
anyone have any thoughts on today's action?? we're giving back some gains today.. not sure whether to buy some more or whether this stock always
pulls back after big day runs or on option fridays
jim
IMO, volatile stocks, including AMAT, often have their volatility amplified by having large short positions. The run-ups get amplified by the shorts having their nuts in a vise. After the dust settles, the fundamentals once again take over.
Several times, when AMAT seemed to get way ahead of itself, I have sold covered calls and either watched them expire, bought them back at a lower price, and gotten called away when the runnup continued. I regard this as a very low risk way of lowering my effective basis. One can't lose, BUT gains can be limited. Currently, my effective basis for AMAT is about zero, and I don't have to worry about the stock going down and losses zooming.
IMO, this is a consolidation period. I did sell and buy back calls after the big run-up, but did it quickly and could have made more if I didn't love the company long term.
However, if I were to give a seminar on how to be miserable, I would spend a great deal of it telling people to obsess on saying, "If only..."
Most of us are very happy with this stock.
fred |
