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Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: edamo who wrote (7339)	5/4/2000 2:22:00 PM
From: Jeffry K. Smith	Read Replies (1) \| Respond to of 8096

Ed, nas hitting higher lows on higher volume is a warning sign...institutional distribution, sucking the naive knights of uncle's round table in a bit deeper...look for a high volume breakout....until then exercise caution.... Could you explain this phrase a little more? If the Naz hits higher lows on higher volume I thought that meant that the base was firming up - but then you talked about "naive" people being sucked in...? A high volume breakout - because you did not specify, (or proably because I am not knowledgeable enough), could the breakout you refer to be either upward or downward? In a market like this I am hesitant to do anything - in your opinion is this a good course? Thank you, Jeff Smith

To: edamo who wrote (7339)	5/4/2000 2:49:00 PM
From: RocketMan	Read Replies (1) \| Respond to of 8096

Well, Ed, I'm the wrong guy to defend G&K, since I am not religious about any strategy. It presents a nice model for selecting tech stocks, and does very well in certain market conditions. I'm not sure how well it will do in an uncertain or down market, but so far it has done no better, and a bit worse, than other models. The post that you originally responded to, I believe, was the one in which I proposed that small or mid caps may be a better vehicle in this market, though with larger volatility. Regardless of one's strategy, the market has taught me one lesson: Be flexible and avoid dogma. You can lose a lot of money by sticking to the wrong side of any strategy. OTOH, there is a case to be made for ltb&h, and I respect those who have that type of time horizon and really can play the long term uptrend in the market. Problem is, that trend may play out over a much longer time period than most investors are willing to wait, particularly investors in volatile techs or on the internet. About exercising caution and the current market condition, well, you are preaching to the choir there. What options strategies do you think are best suitable for this market? It's nice to have a level-headed exchange with you. P.S. About this is serious, it's about individual life savings, about people who had everything in calls, and lost all as the market collapsed.... We are in violent agreement here. That is why I made reference to the $50 call that became a 50 cent call. This is risky business.

To: edamo who wrote (7339)	5/4/2000 3:02:00 PM
From: Poet	Read Replies (2) \| Respond to of 8096

I've just logged on to see yet more posts from you and Pal, even though you gave us the impression that there was nothing here for you. You have referred again, erroneously, to Jill's financial situation. She purchased NTAP 55 calls, not exactly an agressive move, and still holds them. As of today her portfolio is 75% of what is was prior to the April crash. I hope this clears up any misconceptions you have about her financial health. You have called me a mother hen, you have called me disengenuous, you have insinuated that I do not know enough about options to run a thread on SI. You have made all your points very very clear and everyone who reads our thread understands how you feel. It seems to me you have three alternatives: stay and post on options in an amicable way, as we'd prefer, leave, or stay and continue to deride us. I hope you choose one of the first two options.

To: edamo who wrote (7339)	5/4/2000 8:41:00 PM
From: Uncle Frank	Read Replies (2) \| Respond to of 8096

>> g+k is a game, it's not real...no more then dogs of the dow...a very dangerous game...do you think the trading floor is waiting for a tornado,bowling alley, whatever??? You seem to have as much difficulty with metaphors as you do with common courtesy, edamo. Do you believe your experiences with short term options qualifies you to judge a ltb&h strategy? >> refer to the great "uncle frank"....qcom 2000 in 2000...and people followed this logic This is the 2nd or 3rd time you've tried to put those words in my mouth, edamo. I contend you're either mistaken, confused, or simply a liar. Provide a link to a post of mine where I make any such prediction, and I will pleased to apologize. If you can't find one, I'll expect the same from you. uf

To: edamo who wrote (7339)	5/4/2000 11:27:00 PM
From: RocketMan	Read Replies (2) \| Respond to of 8096

refer to the great "uncle frank"....qcom 2000 in 2000...and people followed this logic....ask jill how she got into trouble....by keeping the ltb+h mindset and used a parabolic gain to leverage...the strategies used together can be fatal.... Ed, I'm sorry, but I neglected to comment on this statement, and feel compelled to do so. At the risk of sounding obsequious, perhaps you know a different UF than I do, but to me he has been one of the most level-headed individuals on SI. I have never heard him say qcom 2000 in 2000, nor have I seen him be dogmatic about any trading strategy, not even G&K. If anything, he gave me the opposite point of view when I became too enamoured of companies like cree, questioned whether any of us would ever have another year as good as 99 for G&Ks (to my disagreement), counseled me about the risks of too much trading, introduced me to leaps, explained to me the merits of ltb&h of quality stocks, and on and on. There may be some that post on G&K, or other threads, who might fit your description, but UF is the last one I would describe the way you did. And about G&K itself, I said I am not its best defender, and I am not. Frankly, I am not that knowledgeable about its many nuances. However, after reading the book years ago, before I ever heard of the G&K thread, I obtained new insights into the technology adoption cycle. The G&K thread gave me practical lessons in how that is applied to individual stocks, and out of the many ideas in that thread I picked qcom, jdsu, and cree, all of which were monster winners for me over the last 12 months. I can't argue with success. Will that repeat in 00? I doubt it, and I now agree with what UF said to me several months ago, that I should not expect that in the future. I don't think the problem is the G&K model itself, but that it has become a victim of its own success, as have many technology areas. The multiples got too rich, the caps too large, and no company can continue that phenomenal growth ad infinitum. So what was a great G&K investment at a p/e of 30, 40, or 50, may be a bad investment at over 100. In a sane market, these companies would have grown at more moderate paces, and may never have reached such multiples. I suspect that we are in violent agreement in much of this, though not all, particularly with respect to UF. I guess we will just have to agree to disagree on that point.