I have a couple of sincere questions for any who lurk or post here who might care to respond. These are not intended to be confrontative but a search for views and how people perceive the stocks they invest and/or speculate in. All comments are welcome.
Take any gorilla of your choice, CSCO, MSFT, QCOM, or even a hypothetical one if you wish. Imagine that there are no negatives lurking about the company, that growth, profit margins, reputation, markets, etc. are all superb.
1. Is there ANY market price at which you would feel that this company no longer warranted a sell-put/buy-call-or-leap strategy, a price at which you would become seriously concerned about the future of your holdings in such a company?
2. If the answer is yes, how would you arrive at such a price or valuation level? What parameters would you consider in such a decision? Would they include both fundamental value measures such as PE, P/S ratio, or others, as well as technical analysis? Do you feel that you would, honestly, be able to sell a major part of your holdings, as a contrary opinion in the face of overwhelming bullishness, if such a price level were ever reached?
3. If the answer is no, are you relying on technical analysis of some kind to provide adequate warning of risk and/or a major change in investor psychology? If so, how would you differentiate this from a 10-20% correction that in the recent past has been hailed as an opportunity to sell even more puts?
I am sure it is no secret to any of you that there are money managers and investors of certain stripes (e.g. Abelson et al) who believe that such levels have already been reached for many stocks.
I am wondering what the gorilla and king optioneers think.
BP |
