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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (6205)	9/12/1999 1:14:00 AM
From: Uncle Frank	Respond to of 54805

Very interesting, Greg, since those of us sheltered accounts can use your approach. Can you help us work through the potential for returns under various scenarios? It's a little tricky for us newbies. Franq btw, to what extent do you employ this strategy?

To: Wyätt Gwyön who wrote (6205)	9/12/1999 6:46:00 AM
From: Mike Buckley	Respond to of 54805

Greg, I buy 100 shares of underlying, sell 1 covered calls for essentially half the value of underlying, and then I buy 50 shares common. At first glance, I wondered about the strategy of purchasing the additional 50 common shares. Now that I've given it more thought, I think you're implying that there was an unstated decision to be fully invested. Having received cash for the sale of the covered call, that money has to be deployed somewhere. Because the strategy is based on the expectation that the stock will go dramatically higher in the long term, the best place to put that cash is in more of the underlying stock. Did I get that right? Or is there another implication I might have missed? --Mike Buckley