John,
I have, for the last six months, been selling INTC Puts and using the proceeds to buy IBM Puts. Yesterday, I repurchased most of my INTC puts, buying them back at a much lower price than what I had sold them for. This has left me very long on IBM Puts which I now own for next to nothing. Unfortunately though, to date IBM has not cooperated and has actually out performed Intel in the last 3 months. This fact has left me questioning what am I missing that others may see? or how can Wall Street be so blind as not to see the poor quality of earnings that IBM reported in April, that I see? I should say though, as an investor for over 25 years, this self introspection process has occurred many times over the years. (gg) Therefore John, given the above, I would not recommend buying IBM, especially at these levels.
As for buying Intel at these levels---- If you had been following this thread, you would know that I was buying Intel when it had been going down in the 130s. I suggest that you review my posted recommendations over the last six months on this, and the Intel, threads. As a quick review....
In December, 96 I sold INTC Calls against 10 % of my Intel core position. I believed at the time that "Irrational exuberance" was controlling Intel's price, which was then 165. When INTC hit 147, and then 142 , I bought back my short Intel Calls to close. As Intel continued downward, I began repurchasing Intel Calls at 137, 132, and 128.
Yesterday, I completed the cycle by selling those Intel Calls when Intel was at the now split price of 88, (or 176 pre split).
Therefore, my advice to you John is that at these levels you have missed the dip. Since I am now once again, very defensive, I suggest that you might want to wait for the next correction before buying any large cap tech stocks. However, long term that is a gamble. As I have stated here before, I have always believed that Intel is one company you always want to own.
John, the good news though is that you may not have to wait too long. If I am right about IBM quality of earnings, we may see a market correction begin early next week precipitated by an IBM disappointment, as I expect they will.
As always, I reserve the right to change my mind, or to be completely wrong.
I hope this helps.
Jules |
