How to Win in AMAT LEAPs:
Here are 2 Posts written 2 years ago when AMAT was Bottoming just as it is doing now. The first I wrote and the second Post was Jacob's (Snyder). Jacob, when I first introduced LEAP Investing in this Thread was against it but thru countless Posts between him and me I was able to convince him to invest in AMAT LEAPs. The first 100 Calls Jacob bought at about 60K was sold at about a mere 100K profit (due to nervousness in his part); the second 100 calls bought at less than 40K was sold for 900K when AMAT went to 127 (pre-split) I guess, If he waited till AMAT went up to 115 (post-split) the highest price could have been 1.9 M to 2M!
AMAT and the rest of the Market Bottomed Oct. 8, 1998.
(Hey, Jacob, when are you going to buy those LEAPs again? AMAT, at 51 1/2 is now 55% below the High of 115. are you going to wait for -60% or lower?)
o: Jacob Snyder who wrote (24875)
From: Tito L. Nisperos Jr.
Tuesday, Oct 6, 1998 11:48 AM ET
Reply # of 37776
Hi Jacob,
Since you have already found the answers on how they price Options from some helpful people in this thread, I 'll just come to say you got the Right Move in buying those
LEAPs.
We as human beings are trapped in this planet experiencing night and day because of the way the earth rotate on its axis facing the sun. We can not do anything about it but
expect that after the night is over comes the day; and when the day is done comes the night...
Thru experience as investor, you get the feeling that sometime later the Market bottoms and go on to hit new highs and new highs until it turns around to seek the bottom
again... When you bought your first 100 LEAPs for 6/sh you based your decision on your experience that night will later turn to day. You bought another 100 at 4/sh
knowing that the LEAPs could easily go back to 6/sh in a day or two of Market turnaround and make a quick profit on your latest investment...
We know from experience that the Market after a decline that last a year retraces its step Up for about a year also. AMAT, like most Silicon Valley stocks goes back Up
to hit new highs (is it a coincidence that AMAT's trading range in this Sep and Oct is at 23 to 28 --- almost the same as in Sep and Oct at the bottom in 1996?)... With
more than 2 years life in your LEAPs I'm almost 100 percently sure that you will make a lot of money with your LEAPs more or less a year from now... When at the bottom
in summer 1996 I bought those 4/sh LEAPs that became 80/sh LEAPs 9 months later, my decision was based on the knowledge that night will always turn to day later; and
I was right. PEs and bad market conditions were put aside in favor of life experiences...
I'm wishing you Good Luck in your LEAPs even if I'm sure you will surely attain your goal. (isn't more than 2 years too cautious? But then I know you are a man who wants
all risk reduced to a little or none at all!...)...
To: Tito L. Nisperos Jr. who wrote (24952)
From: Jacob Snyder
Wednesday, Oct 7, 1998 7:27 PM ET
Reply # of 37776
tito, nice to hear from you:
re: "after the night is over comes the day", and "isn't more than 2 years too cautious?" If 2002 LEAPs were available, I'd buy them instead. And, when the 2002s become
available, if the stock is still below 40, I'll roll them over. I am 100% confident day will follow night, but not at all sure about the timing. Maybe that comes from living above
the Arctic Circle, where the sun sets in mid-November, and doesn't come up again till late-January.
If the 1996 pattern repeats, then a year of decline should signal the bottom. If. Let me repeat that: if.
re: "I know you are a man who wants all risk reduced to a little or none at all" I'm using all of this year's savings, to buy far-out-of-the-money options, in one very volatile
tech stock, in an industry with zero visibility, as the market tumbles and recession looms. Only the man who introduced me to AMAT LEAPs could call me risk-averse.
Reference Posts:
Message 5925593
Message 5946661 |
