>>Herb: This is a strategy for someone who trades CPQ,
not for an investor, especially not an investor
who has held his/her shares for more than one year:
<<
You express a valid point, but I'm afraid your premiss is base on misconception. If you'll review the chart, CPQ dropped below 25 briefly only thrice during 1998; once in late March, again in early April, and again during the broader market sell off in October. In fact, one must go back to before July 1997 to find CPQ below 25 on a continuous basis, split adjusted.
As to the tax issue, capital gains are as much a part of investing for profit as income tax is a part of working for profit. The prudent investor would prefer the capital gains pay both the taxes and a substantial appreciation in net worth. The road to that end is marked by avoiding substantial losses as well as dead money.
Therefore I stand by my assertion that, using reason as ones guide, a CPQ investor wishing to minimize losses and avoid dead time for their limited capital resources, would do well to take advantage of the market dynamics of the collateral sell off and move their capital to a stock that will not stay down with CPQ.
Again I restate my opinion that AAPL, due to the proximity of it's ER and relative certainty of beating expectations, is in an excellent position to be of service to the prudent CPQ investor (or trader) caught in this sudden abysmal turn of events. AAPL, as another boxmaker, will most certainly take collateral damage with CPQ on Monday thereby producing an extraordinary opportunity for short term gains. It's already low P/E minimizes downside risk. It does not have the same problems CPQ has. Currently Apple's inventory is in order backlog position. A speed bump product refresh is imminent. Looking longer term for events that positively affect the stock price: There is an iMac like portable to debut; There is the developer's conference coming up; There's MacWorld New York; There's OS X; There's Quicktime 4.0; There's the AltiVec Enhanced Power PC G4; And there's the comfort of a strongly executing management team.
As always, due diligence is sagacious.
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