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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Mike Buckley who wrote (44002)6/30/2001 10:53:06 AM
From: tekboy  Read Replies (1) of 54805
 
the point you're making is that the Jan 04s are less than half the cost per month than the Jan 02s and that is to be expected. Not having run the numbers, I didn't realize there would be such a difference in cost. I'm impressed.

I'm the last one to be talking on this subject, natch, but might your surprise be due to overlooking a key part of the equation, which is the greater upside potential of the 02s over the shorter term? I mean, there's rarely such a thing as a free lunch, so the difference in price must necessarily be largely correlated to a difference in either risk or reward. Since the risk is actually lower for the 04s, the missing factor here must be that the 02s would provide a significantly greater reward should the stock go up a lot between now and January, and that potential reward is what some, uh, reckless gambler types might be willing to pay through the nose for...

tekboy/Ares@can'timaginewhowouldeverdosuchathing.com
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