Hi Mike..
Basically I'd buy the component stocks of the BBH if I thought they were interesting (http://www.nasdaq.com/structuredeq/holdrs_bbh.stm).. I'd personally have something morally wrong with the 'fund' since they're long on CRA. :)
But since BBH isn't on the S&P Midcap 400, I can't dabble with it. I restrict this purely hypothetical portfolio to S&P 400 stocks only.
MLNM and SEPR look interesting, but I'm waiting for just one more catalyst out there.. (one major one, which is high implied volatility, is already there). MLNM's a bit more shakier than SEPR since MLNM needs to get something real into Phase III. (OK, OK, Integrilin technically counts, but this wonder drug isn't going to do much for the company except give them perhaps some sales know-how which probably wasn't worth the money they paid for it). SEPR is at least halfway there. Check out ELN? Hold your nose, since even if those LYONS are paid out in common stock at the end of 2003, even with the dilution the common (at least to my pen and paper calculations) is worth more than the $600M capitalization+1.58/share the company currently is trading for. The fact that 40-50 posts a day don't occur there anymore is also positive.
LOW RISK WAY OF PLAYING ELN: Buy the common, and sell August 2.5 covered calls for 30 cents a piece (on the bid). Implied volatility according to my models exceeds 250%.
But volatility is high enough out there that we are quite, quite close to some violent transactions.. just recall that 80% of the price movement comes in 20% of the time in both bear and bull markets.
So, probably the easiest way to make money right now in the markets is to SELL VOLATILITY.
Oh, I wouldn't touch CEGE until after November 2002 at the minimum. Toxic preferred convertibles can really damage you, eh? |
