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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF
COMS 0.00130-67.5%Nov 7 11:47 AM EST
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To: freeus who wrote (6103)10/5/1997 8:45:00 AM
From: Glenn D. Rudolph   of 22053
 
. I had intended to keep it for a few months, until the auto industry (they do auto loans) goes into its usual slump BUT I dont want to give away my other gans by allowing a small loss to become a big loss. But I dont want to be "impatient" either. I'm not asking you to tell me specifically about this company. Instead, I'd like a philosophical viewpoint on how much one should allow a "loss" in a company which is not actually core holdings. Freeus, There is no sure answer due to the fact I do not know the fundamentals nor know what you feel is the future of the company in question. A rule of thumb is not to stay with a security that is not a core holding beyond a 10% loss. On the other hand, if the underlying security is optionable, why not buy protective puts but with a expiration way out and at a strike price of 2.5 points below where the security is now? A strike of 15 might be a decent put and inexpensive. It has been my experience that most well run companies do come back and even go up further so holding is usually the best approach. I personally will hold a stock with a loss without buying the protective put. I hate to waste the money on insurance. If the stock is optionable and I fell it will come back, I will sell the shares at a loss and sell naked puts with a strike price that is profitable to me. The puts would expire about six months out and the time premium will make up the current loss. Did that help at all? Glenn
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