<Glenn, my broker is a VP with Merrill and talks to the research guys
often. I am not saying he got any info from the research department but
he is well wired at Merrill.>
Joan,
My account is not with Merrill Lynch. However, my Mother's is and I called her broker because I was looking for all the information I could find. She indicated she called the research department and repeated their comments about outdated technology, etc. They were recommending to not buy CSCC. That agrees with your indicated rating of CSCC by Merrill Lynch. Sales weak etc. It is possible that your broker might have a better contact at research and possibly give a different opinion. I sure hope so.
I have positions in quite a few of the stocks in the group. USRX, CSCC, XYLN and FORE. IOMG if you call that in the group (not networking). I also sold puts on the NWX index which was a disaster this month. The index consists of the following securities:
COMS, ADCT, ASND, BAY, CS, CSCC, CSCO, DIGI, FORE, MADGF, MFST, NN, NT, TLAB, USRX
My diversification was not good. Virtually all the positions were in companies in the same type of industry and the market hated networking this month. My lesson is not just to diversify companies but also industries. It was an expensive lesson and one I am still trying to find a way to handle damage control. There are still puts for months further out on CSCC that are way in the money. I never had to face such an across the board sell of in the past and had been doing reasonably well until last expiration. I would really like to see a decent bounce in CSCC and or a continual slow climb will work. The percentage change in other positions is not nearly as drastic and I expect the networking sector to come back in favor hopefully soon.
My final analysis is my style is too agressive. I am not emotionally prepared to take such a beating. The rewards are large but so are the losses when they come to pass.
Also, you mentioned your only position in the group is CSCO. It would seem to me that they are the best positioned for a comeback and of course, are the market leader. I can't tell you why I do not have that security. I missed the boat apparently. It is my approach to diversify industries after this group rebounds. It seems oversold but the market will determine that. It would take forever to re-coop the losses in a group that has much less volitility. The group should be near a bottom after the recent pounding. These are my hopes. Yesterday's depression has changed to optimism for Monday:)
Thank you again.
Glenn |
