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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Apollo who wrote (35387)11/27/2000 2:43:57 PM
From: Thomas Tam  Read Replies (1) of 54805
 
Port. Summary

QCOM 78%
GMST 10%
GX 2% (don't know why its here)
Cash 10%

Single biggest mistake would have to be not selling some QCOM to buy other gorillas when the portfolio was so skewed with QCOM >99%. In retrospect, difficult to know a top as UF has stated. But when everybody is buying, its very difficult to sell on the perception of potential lost gains. Still not very diversified as everything is so expensive in all metrics that we value a company.

I would like to say something about margin which I continue to use in varying degrees, namely covered calls and short puts. I did manage to increase my returns slightly by selling covered calls on QCOM as the momentum went away and with a more rationale mind I thought $200 per share was a reasonable price that I would sell some stock in the future. Its a margin type of transaction but not using margin per se. Also I continue to look for entry points in other gorillas that have been hit to short puts. Some income if the stocks runs, but if it doesn't I get assigned some stock that I wanted to own at that price. Its a bit of a hedge, that seems reasonable today, then again it seemed reasonable in March as well and got burned with it on JDSU as the valuation component/momentum buying and selling skewed how the company should be valued. So in the end is margin good or bad? I guess it really depends on how its used and where you get in or out at.

Later
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