To All AMAT Bulls especially those who suffered greatly in this downturn:---
Last night a number of people E-Mailed me about LEAPs. Many of you already know how I managed to turn a 77% loss into a more than 2,000% gain when the underlying security or stock gained 400% from its lows last year. This is worth repeating. I do not have much money left to repeat and take advantage of this great opportunity but I'll tell you anyway;--- if I won't gain, others may--- and that's good enough for me...
Assuming the stock continue its slide (stock markets all over the world have huge losses last night) we buy LEAPs, a little bit at a time, averaging them down until we pour everything at the bottom;--- 20, a decline of 63% matches the decline we have seen a year ago, could turn out to be the bottom. But in case the stock just stay where it is now before heading back up, we buy leaps anyway. If you have no cash left, sell stocks to buy LEAPs---as I have done before. It could be a fast-paced market today so I've some pointers to tell you:---
1. Buy at market. The last time I used a limit order was when I set an option to buy at 7/8; the price headed from 1 to 27 in a short period of time leaving me in the dust.
2. Order 10 Calls or less at a time; a 20 Call order at market almost always take some time to get filled.
3. Remember not to spend all cash at once; spread it down.
4. Jan '99 LEAPs is cheaper and OK. You can always Roll them over to Jan '00 if you think the '99 LEAPs need more time to work for you. Get cheaper, a bit out of the money LEAPs like:---if the stock is below 30 but above 20, get 30; if the stock is at the teens, get 20.
My saying:---"When down, relax and think; rise up with a kick" says them all. This is NOT Death you are facing---it's money, but money you need to keep on living, though. I've stared at death many times in the past beginning at birth as you can see in the Link below. Happy Investing!...
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