Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Paul Senior who wrote (14343)	4/19/2002 5:48:07 PM
From: Allen Furlan	Read Replies (2) of 78519

Paul,thanks for your comments per bpp. I took a small position. Guess this satisfies my arbitrage appetite. Here is an interesting aside. Today I sold 10 more naked calls on brcd, the 04/90 If the speculators should push this stock to 90 in next 21 months I will be in deep kimshi. but my assessment is that there is a very small chance of that happening. The cost of doing this transaction is 10% of stock price or $260 plus the value of the short option or $165. This $425 "investment" is essentially margin availability. If the stock gets down to its fair value($10 in my opinion) the requirement will probably be about what I have already brought in($165). As time passes a "portofolio" of short option positions accumulates very nicely. This is an inverse of value investing, ie picking stocks that are hopelessly overvalued. To those who say too risky I would say that the strategy can work very well with a hedge that significantly minimizes risk. In the case of brcd I do have small positions in emc and ntap which I use as a hedge. If anybody on this thread knows of a site which would help identify good candidates I would appreciate knowing. Good luck to all.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next