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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: jim black who wrote (3376)	5/2/2001 3:27:59 PM
From: Tommaso	Respond to of 74559

That's why I have bought all those farthest-out, farthest out of the money Dow LEAP puts (actually they are in the money because as European-style LEAPS they can't be exercised until expiration and so sell at a discount).

To: jim black who wrote (3376)	5/2/2001 3:42:46 PM
From: smolejv@gmx.net	Read Replies (1) \| Respond to of 74559

showing part of my hand: leap puts on cpq 25.6 csco 50 mu 58.6 yhoo 61.00 orcl 30.4 The numbers of course are the PE multiples. Which also means I do track the earnings - much closer than the prices. What am I trying to say... CSCO is up 10% on the day, means sort of a jump of 50 to 55 in PE. And my position on it is still in the green range. Will I keep it? Greed and fear, fear and greed.... dj

To: jim black who wrote (3376)	5/3/2001 12:36:01 AM
From: pezz	Respond to of 74559

Okey Dokey this newcomer will try an make his point.As per DOW. Several years ago when the Dow was considerably less than today and the dividend dipped below 2% an IBD story ran about how every time prior that the dividends got below 2% the DOW crashed. Not this time....Why ? One arguement was that these companies were using dividend money to buy back shares rather than have it taxed twice thus increasing shareholder value. Why buy the DOW or S&P at these PE's.....In conjunction with the DOW's rise over the last few years we saw a huge explosion in Index funds and money put in them.They have no choice but to buy these stocks. I dunno if these theories are true nor do I care. The "why" isn't as important as the history of the tape IMO Since WW 2 there have been multiple recessions and bear markets. The general scenario has been thus ..... 1.Economy too hot. 2 Fed raises rates. 3.Stock market goes down 20% -35%. 4. Economy slows down. 5. Fed cuts rates. 6.Stock market goes up climbing a wall of worry . 7. Economy recovers . Now although we have come to #6 I'm not so silly to try an tell ya that this scenario is cast in stone and must repeat as stated. But it seems to me that if you believe that "it's different this time" you will need more than Pe's amd yields to make your case. Especially with regards to the present rate of inflation,[ theories that it will balloon not withstanding ]growth in productivity and the current low unemployment rate....... Although the bears may think one is looming there is at this time no real economic crisis . The banks are sound. The dollar is strong.And what economic problems we do have have been around for years with no real repercussions. So until someone can convince me that this time it is different I will continue long.