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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (43238)	3/6/2001 5:46:11 PM
From: Sam Citron	Read Replies (2) \| Respond to of 70976

Cary, You call me an optimist. If I were an optimist I would be buying calls rather than selling naked puts. Nor would I be expecting AMAT to go back down to 40 again. Most everyone takes it for granted that AMAT will double or triple within the next 2 years (from current levels). Some of these people are buying the stock and protecting themselves by buying puts. I sell them this insurance for what I consider to be a reasonable premium. If AMAT tanks, then I take their stock at $31 (net). If instead it does fine, then all I get is the premium I have collected. This is an extremely conservative strategy with a limited upside of only $9 per share, but it is win-win and I get the cash up front. Ian thinks it is foolish that I would not simply buy AMAT at $50 and hold it until it hits $150. I think he is the optimist. You, OTOH, display the jaundiced eye of an industry participant and the patience of a historian. For that I salute you. But I believe you are a pessimist if you expect to receive your AMAT at these convenient capitulation levels of 35 to 25. I think there is an excellent chance instead that you may miss the bottom. History never repeats. It merely rhymes. I would be willing to make a gentleman's bet that you do not get beyond your first tranche at 35. I am curious what probability you would assign to AMAT troughing below 32.5? Sam