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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: Farfel who wrote (5684)	6/18/1999 6:40:00 PM
From: Katherine Derbyshire	Read Replies (2) \| Respond to of 7342

Joe, get a life. What I don't understand is why you're taking all of this so personally. If I make a blunder and sell TLAB too soon, then you buy it from me and make a ton of money. Life goes on. The way you're talking, you would think I was questioning your manhood or something. But then, if you're so insecure about it, maybe TLAB isn't such a great stock after all? By the way, following my gut got me out of the Internets in early May, with an absolutely obscene amount of money. Next question? Katherine

To: Farfel who wrote (5684)	6/18/1999 8:53:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 7342

joej, I must rise in defense of Katherine. I think that the point that she was making is that there is a price at which she believes it is more prudent to sell than to hold, and that price is determined by the expected performance of the company on a per share basis. I think it is important to distinguish between the performance of a company and the performance of the stock market. On that basis I sold CSCO because the price seemed totally out of line with the expected performance of the company. Consider the fact that CSCO and TLAB are expected to have approximately the same growth rate over the next five years or so. Yet the forward P/E of CSCO is considerably higher than that of TLAB. So the question, to my mind, is how does one deal with prices that seem to be out of line with expected performance of the company. The way I generally deal with this issue is to prudently hedge my investment with options. Let me give you a specific example. I hold a considerable position in Dell, but when the stock started to trade over $45 several months back (on its way up to $55) I sold in the money calls against my position. Those calls expired worthless, and I still own the stock. I see nothing wrong with that strategy, because if my estimate were wrong, I could have repaired the position by repurchasing the calls and selling in the money calls at a higher level. Since I am bullish on TLAB I sell out of the money calls which allows for capital appreciation while providing me with some cushion. I have been doing this for several years, and in so doing have reduced my effective cost basis to under $10. And when you say: But then, maybe that's a man's way---logic; whereas a woman "follows her guts"----if you try following your guts in this market Katherine, you will have them "shot to bits" more assuredly than if you did a tour in Nam. Discipline is the name of the game, and not thinking you know more than you do. I find those remarks offensive and uncalled for. Whether Katherine is correct or not, I think that gratuitous sexist remarks like this are totally out of place. I made the point to Katherine in an earlier post that the biggest problem with selling securities that one suspects are overvalued and repurchasing them at a later date is that market timing is both difficult and fraught with negative tax consequences that can substantially reduce one's return and may be inferior to a buy and hold strategy even if the timing of the trades is good. But suppose that TLAB would fall to $50 during the coming summer. Would you apologize to her and claim admit that she was correct? Suppose she had sold TLAB when it was $45 last summer, and repurchased it at $16 this fall? In order to deal with the valuation issue I have come up with a metric I call CNPEG2, which is the ratio of the YPEG of the stock times its beta divided by the YPEG for the S&P500. Stocks with a CNPEG2 of significantly less than 1.00 are buys, and stocks with CNPEG2 of around 1.00 are holds. So far, this approach has stood me in good stead. TTFN, CTC