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Pastimes : G&K Investing for Curmudgeons -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (89)	11/29/1999 6:18:00 PM
From: unclewest	Read Replies (2) \| Respond to of 22706

What? Don't you want to talk about feelings NO! OTF cree...ok...i'll not speculate about them. if i see something large, i'll let the thread know. i will continue to follow them very closely (large positions create that kind of desire). any questions come up, i'll try to be a good contact. the market for SiC is growing exponentially..cree is the only publicly traded company i can find with a large vested interest in SiC. john stichnoth has made some great calls this year. guess i may have to study a little chinese. hi john. uw

To: Uncle Frank who wrote (89)	11/29/1999 6:51:00 PM
From: RoseCampion	Respond to of 22706

The more I play this game the less I like calls and the more I love leaps. UF, while I agree with the philosophy 100%, and concurring that LEAPS are a great way to play G&K stocks, I would hasten to say there's a spectrum here, not a black-and-white distinction. Very, very roughly: decays rapidly <-------------------> holds value over time lower price <-------------------> higher price high leverage <-------------------> less leverage risky <-------------------> conservative (relatively speaking) +---------+---------+---------+---------+---------+ ^OTM near expiration calls ^ATM near expiration calls ^OTM mid expiration calls ^ATM mid-expiration calls ^OTM LEAPS calls ^DIM near-expiration calls ^ATM LEAPS calls ^DIM mid-expiration calls ^DIM LEAPS calls ^DDIM calls (all) ^DDIM LEAPS ^common stock OTM=out of the money ATM=at (near) the money DIM=deep in the money DDIM=deep, deep in the money The point is that you have a wide variety of, ahem, options to choose from here - each with its own risk/reward profiles based on the time decay vs. leverage ratio. It's not simply a choice between a LEAP or non-LEAP, it's the interplay of the time value vs. the intrinsic value vs. the time until expiration. For example, assuming a stable stock price, a Jan 2001 QCOM 400 LEAPS call (OTM LEAP) will lose much more in time value over the next two months than will a Jan 2000 QCOM 150 call (DDIM call), because the latter has almost no time value to lose. So the option with only two months of life left is in that sense less risky than the one with fourteen months to go (and a darn sight cheaper to roll forward in time, to boot). If Q keeps climbing, the LEAP will of course have a much better return; if it stays the same or falls, the nearer-term option will decline in value more slowly and therefore lose less money for you. My personal bias is to mid-term DIM calls, since I don't like paying someone else for the privilege of having time value but I do like to get the 2x-4x leverage available using them. This would mean something right now (going from memory here, as I'm not buying right now) in the Jan00 260-270 or Apr 280-290 range. (Though I do like DIM LEAPS in the taxable account for long-term CG treatment...) -Rose-

To: Uncle Frank who wrote (89)	11/29/1999 7:31:00 PM
From: lurqer	Read Replies (1) \| Respond to of 22706

exhibit pongid traits. How was that, Lurqer? Yep, knew there wouldn't be a problem. "And now for something completely different" In the spirit of Personal insights are welcomed, as they will allow us to know each other better. I will offer a market perspective (although no great insight should be inferred). As a believer in KISS the following is simple to the point of being simplistic - but it works for me. The perspective is looking at the market from the view of timescales - i.e. when a "play" is initiated how long do you anticipate it lasting. Now most people that "play" in the market use terms like short, intermediate and long term. It's just that no two people mean the same thing by these terms. In order to clarify my own thoughts on this subject, I devised the following hierarchal schema: Grand Scale Short term - less than one year (a.k.a. trading) Intermediate term - One to ten years (a.k.a. LTB&H) Long term - One to several decades (usually played institutions for obvious reasons). Within each "Grand" division, one can divide further - e.g. within Grand Scale Intermediate Short term - two years or less Intermediate - three to five years Long term - five to ten years. The definitions are a "framework" and hence "slightly" flexible - e.g. I would consider a 14 mo. option play to be Grand Scale Short term. The purpose of this exercise for me, was to divide the market into different arenas (sandboxes, playpens) where similar strategies would be efficacious. The "set of habits" that proves remunerative in the trading arena are death in the LTB&H arena and vice versa. This schema has proved valuable to me in knowing which "set of habits" to use for which kind of play. If one further divides "the market" into a domestic and foreign bifurcation - then I have "chosen" to play in three arenas. I have a very expensive "hobby" - Long Term (multi-decade) Foreign - which I play "for the fun of it" (1998 presented "once in a lifetime" Asia opportunities). In looking at the market most of the "fortunes" seemed to be made in the LTB&H arena. Since my "natural" proclivities were in this area as well, I placed most of my capital in this arena. When my "real" job "ceased to exist", I decided to try my hand at trading to "put food on the table". I had no illusions that it would be easy; I had serious doubts that I could "pull it off". I defined a monetary unit - a Sally. One Sally consisted of my last full years salary, including bennies. My criterion for success (and not getting a "real" job) was making at least one Sally per year. I'm still trading but have no illusions about whether it's "brains or a bull market" that is keeping me in the "pink". I mention this here because I believe there is a tendency on the G & K for "group think" to exclude other arenas (or other LTB&H strategies) as less worthy. This can best be exhibited by phrases such as a pejorative "smacks of speculation" comment. Simply because a particular "play" is a trade and not a LTB&H in no way means it is less worthy. JMO Living ... lurqer

To: Uncle Frank who wrote (89)	11/30/1999 3:44:00 AM
From: Sommers	Read Replies (2) \| Respond to of 22706

... There you are. Just finished moving two toddlers and my household from Ft. Myers to Boston. Whew. Haven't logged on in well over a week. Glad to know everyone is all here. BTW, I'm a 38 year old single-mom who just quit work and will be going to MIT full-time starting next year for my business degree. My profile is a joke, but I think many of you know my true holdings and investment style. I especially enjoy the company of curmudgeons. I trust I'm welcomed here. Conversation is light and easy, but try not to move around so much. I intentionally lose enough friends as it is whenever I move (how curmudgeon of me);)