Clarkster, I just tuned into this thread. It's been a while. I guess that steve is sort of on a sabbatical these days. Anyway, I wanted to give you another opinion, since it sounds like you need it. I just posted my long term opinion on cpq on the cpq thread so I won't repeat that. However, I just wanted to say two things. One, you are most definitely doing exactly the right thing by selling covered calls on your position. Do this every month, trying to lower your cost by 2 points or so each month, if possible. Right now cpq options are extremely overvalued so selling calls is a great strategy with virtually no downside. So right on there.
But you bought cpq on margin at 37????? (In chess those question marks denote a very bad move). Have you ever heard of a chart? If you had bothered to look at a chart you would have seen that 37 is very close to cpq's all time highest price ever. Are you crazy? Probably not, but I assume you have never invested on your own before. In general it is a very bad move (doubly stupid in hi-tech) to buy stocks (or anything else for that matter) just when they are at all-time high prices. What possibly could you of been thinking? I think it will take a long time, at least a year and possibly 3 years, for cpq to get back to where you bought it. However, if you rigorously sell calls every month, in just a few months your average cost should have fallen under 30 and the wait will not be nearly as long.
Good luck. |
