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Technology Stocks : All About Sun Microsystems

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To: Charles Tutt who wrote (48239)	4/12/2002 1:44:28 PM
From: E_K_S	Read Replies (1) of 64865

Hi Charles: I was looking at my SUNW investment and total returns to date. I bought my initial 500 shares in October 1998 and then added 500 shares early this year at $17 1/2. I sold some covered calls a few times during this period that generated a few thousand $ (this is equivalent to a dividend to me). My total investment of $28K is worth $40K at today's price. With the call premium that's an annual yield of about 13% per year. It has been quite a ride and looking forward I am still quite positive about the company. My initial 500 share investment is now 5000 shares (with splits) and every four points now represent 100% return on my initial investment. I only have to wait one more year to take advantage of the 5-year maximum capital gains tax rate of 18% and believe SUNW at that time will be riding a new growth phase. As a long term investor my goal is to find companies that can grow 10% per year, provide for huge possible upside returns, and are the leaders or innovators in their industry. Sunw seems to fit the ticket for me and that is why I continue to hold. I was looking at a gold mining company I recently sold. Bought in 1980 for $11 and sold this year for $25 but it paid a 5% annual dividend. The upside potential for this company was limited and I figured the money would be better in treasury bills once rates move up a few % points. In summary, your portfolio must have exposure to technology and as long as you (1) buy at a reasonable price point, (2)have good management,(3) plenty of cash and (4)are an innovator in your industry, it is possible to make your 10% annual return. Sometimes you get lucky and may see a 3 or 4 bagger during your five year holding period. The hard part is to know exactly when to take your profits especially if your management continues to perform. EKS

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