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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Stock Farmer who wrote (43689)	6/20/2001 2:38:21 PM
From: Uncle Frank	Read Replies (3) \| Respond to of 54805

>> Add up the earnings (GAAP, not "pro-forma", because chickens can't fly forever) both plus and minus for all NASD companies. Divide into total market capitalization of those companies. That is the P/E ratio of NASD for example. I've seen those statistics in the past, but since the nasd includes a number of companies that have negative earnings, the p/e derived from the exercise is meaningless. I don't invest in companies that aren't profitable, and the p/e for the companies that I follow has been dramatically reduced over the last 15 months. >> I have nothing against writing covered calls in a neutral or bullish market. There's nothing against writing them in a bearish environment either, John, provided they are long term holdings. If one's holding period for a stock is 10 years, one will surely encounter a variety of market conditions, but they will be of relatively short duration. >> Except to point out that puts are a better utilization of capital, and don't come with the burden of having to own the stock As I see it, there are 2 problems with shorting puts: 1. It is a marginable activity. 2. It is dependent on timing. 3. It is a short term tactic, and there is no possibility of capital appreciation for those using it. I lean towards covered calls, since I don't find owning a portion of a company that has a long term competitive advantage to be a burden. It can be awkward during bearish periods, but I've evaluated my chances of timing the moods and swings of the market and decided my best chance for capital growth is to remain ltb&h in great franchises. >> My point was there are a lot of folks whose only hope of reaching break-even in the next lifetime is through covered calls. That's certainly not true in my case, and I don't think that's the situation with most of the core contributors to the cc4d forum. >> I am not yet convinced of increased productivity (macro, not micro). Mr. Greenspan seems to be :-). Imagine the competitive disadvantage you would be at if you tried running any business today without utilizing computers. >> Here's you and I debating with each other while we might otherwise be doing something to increase actual food, shelter, clothing... But that's what I'm doing... on a micro basis. Because of what I have learned from exchanges with intelligent folks like you, my family is very well fed, sheltered, and clothed <gg>. Thanks for sharing your opinions, John. Though our outlook and approach differ, I appreciate the logic you've used to form your conclusions. uf