All, RE: Today's trad'in:
I thought that I would include my reasoning and assumptions along with my trades. Please feel free to pick them apart.
TSM (ADR, Taiwan based) Semiconductor foundry
Sell 300 TSM @ 24 5/16 (B@ 24 7/16) (77.5)
Buy to close 4 TSM Oct 30 puts @ 8 7/8 (376)
Net on TSM +396 (by selling march 25 puts @1 1/8 and selling Apr 25 covered calls for 1 1/8)
My outlook for semiconductor foundry business was changed by news of slowdown for rest 98. I am bullish on company, best in niche; slightly bearish on stock for near term. Will watch over next few months and look for an entry point.
TSM was a great learning experience in call/put writing, and slightly profitable with a six week return of 5.38% (46%annualized)
Buy 4 DIS july 115 @ 15 3/8
News: Good earnings, 3-1 stock split, significant share buyback announced
Assumptions:
DIS has out standing brand recognition and a captive market (any parent with children and a VCR). I decided to play the short term with the intention of buying the 2001 leaps when available. May also consider 2000 leaps. They are releasing another promising movie this summer, and with there partner Pixar (PIXR) they will release BUGS (all computer animated) this fall. They just opened their Animal Kingdom park and now operate a cruise ship. The new release of `Little Mermaid' has slick piece of marketing geared to kids.
I am concerned about their price to growth rate, but the synergy of good earnings, outlook, stock split and share buyback said buy now to me. I don't know if my timing was the best, but that is part the experiment.
All comments welcome,
Chris
PS. Assumptions from yesterday
buy 5 MSFT Jan99 140 @ 2.
Anticipated strong earnings with potential for MS to hold 98 and possible move to 100 today. (now wrong on my part) With the DOJ unlikely to cloud the release of Win98 in June, I think MSFT could be 120 in July. This play is a pure `stock' speculation on my part. I also think Win98 is being downplayed now, and will show very strong sales when released. I've used beta 3 and it is solid, so I know that I will buy it in June/July.
PPS I vote for 50/50 INTC/MSFT. That's way I've voted with my money so far at least.
This amount was determined by the "use the force" method of investing. "Trust your feelings" said Obi-wan to Luke. I would only add 'then look at the numbers.' |
