<Got rid of all 8,400 shares of JDSU>
Dear everyone, since I don't have a whole lot of time, I will try to briefly answer your questions collectively.
1) SDLI - mkt cap of 33B vs JDSU cap of 120B. Not likely the tail will wag the dog. The deal is not "done" yet - it won't consummate for another six months or so! BTW, the conversion discount since the announcent has fluctuated between 14% and 11%, closing yesterday at 12%. Doesn't say a whole lot, except that the market, at this point, thinks that the odds of it being completed are pretty good. But count on this discount to swing wildly. BTW - SDLI's stock price has also "gone to the moon" in the short run - I'm not a buyer at these levels.
2) Hey folks - I am not condemning JDSU! Ever heard of "lightening up" before summer vacation? I didn't say "I've liquidated my entire portfolio into 100% cash".
3) For my put option purchase, short term means ONE DAY. I paid $3-7/8 for the July 130 puts. No dough unless the underlying is at $126-1/8 or lower at expiration 4:00 PM. If a downdraft materialized, I'll be out in a flash.
4) Don't ask me whether the market will be up or down (and by how much) tomorrow, next week, in three weeks, etc. Ask the almighty one upstairs.
5) Candlesticks on JDSU looks bullish? Which book on Japanese candlesticks are you reading? Go to the glossary and look up "Hanging Man" and tell me if it's bullish...
Let's talk about probabilities.
Something to think about (albeit a very simplstic example):
Suppose you were given a six-faced dice and were told that you would double your net worth if you rolled any number except 6, with which you'd lose ALL your money. Would you take the bet?
Even with probabilities heavily weighed in our favor, 99% would not choose to take this bet. Our aversion to downside risk is highly skewed, and rightly so. Should it be much different with the stock market? |
