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Technology Stocks : PMC-Sierra (PMCS) - moderated -- Ignore unavailable to you. Want to Upgrade?

To: Howard R. Hansen who wrote (159)	12/2/2000 11:22:14 AM
From: techanalyst1	Read Replies (2) \| Respond to of 469

I look at the stock valuation and chart. (more at the chart because valuation wasn't seeming to matter and it was easier to look at the chart). When the stock would get either overbought or break support I'd sell calls. If it broke support I'd buy puts. If the stock fell alot I'd "unhedge" the stock, not wishing to have my shares called from me. I'd sell OTM calls, so if the stock fell, there wasn't a danger in getting the stock called from me. If it instead continued to rise, it usually had to have significant gains since the calls were otm. Yes, there were times when I had some short term losses, but overall the gains were quite nice. There were a few times when I've "covered" my calls with new shares and let those be called away, saving my original basis. Hedging isn't perfect, but it's the only way I get enough cash to buy new shares. Although my long term shares are down a significant amount from their highs, I've still got significant long term gains on my shares, a good amount of cash and more shares in some of my holdings than I had in March. To say that we should have sold at the highs to buy back lower assumes that we know how low they are going and would have to take the tax consequences into account. I don't believe that anyone can consistently call the top and bottom. I know that in a few years all my holdings are going to be higher than they are today, although short term they do have some risk in going lower. If that should happen, I'll put the cash to work. TA