Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (12409)	3/11/2000 10:49:00 AM
From: rsie	Read Replies (1) \| Respond to of 15132

What is everyone's current view on UTEK? Here is one investor that pretty much tells it like it is.... messages.yahoo.com I am curious at what the board thinks of it so far? thanks, Rich

To: MrGreenJeans who wrote (12409)	3/11/2000 9:44:00 PM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 15132

MGJ: Re: "Why not have hedged some of the positions? Taking gains invokes a 20% or 28% capital gains tax along with city / state taxes, in some cases, upwards of 10.5% an automatic decrease of approximately 30% on profits because your Uncle wants a cut." 1. With a portfolio of individual stocks like mine, it became too complicated. The semi-equips must be sold anyway IMO -- the downside risk is too much to tolerate if the cycle turns. These things can lose 50 - 80% when the cycle turns. Moreover, some of my portfolio was short term gains when I made the decision and I was not going to hedge short term gains to try to take them to make long term gains because for all I know those gains could evaporate in the future and it would have cost me out-of-pocket or in the way of opportunity costs to hedge. 2. It would not necessarily have worked. For example, if I shorted the QQQs to hedge a Microsoft position I would have been creamed. Microsoft has taken a hit since the beginning of the year and the QQQs have soared. But let's assume this did work and Microsoft declined along with the Naz. When I cover the QQQs, that gain could well be a short term gain and if I wanted to sell Microsoft because it was not the kind of company I was interested in then my capital gain would have been reduced by the success of my hedge. 3. It was not necessarily an efficient use of capital. If I shorted against the box, I would have to put up an equal amount of capital to my cover my long position. That is a lost opportunity cost to do something else with the money. And if I am on margin to do it, then there is an out-of-pocket cost too -- and a growing and indefinite one. The same with buying puts. And there is nothing now to give any indication of how long this kind of market will last. So am I going to hedge a long position for, say, three years if this is a secular bear? If those funds were in MM accounts, I could earn over 17.25% compounded (5.75% per year) over that period of time in a MM. 4. I have more buying power to go net-short if I choose instead of tying capital up in hedges. 5. If this is the beginning of a bear market, I had to ask myself what am I doing in stocks anyway especially if I could get an attractive bond yield and return potential. There is something to be said for starting with a clean slate. The stocks I have now may not be the stocks I am interested in down the road. The landscape is changing so quickly. Heck, for all I know I could become a Wilshire 5000 man on the equity side. 6. I decided to reallocate at least a part of my holdings to bonds. I have not determined a final percentage allocation. The last time there was a possible opportunity to do this was in 1994. Time to step up to the plate.