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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: chojiro who wrote (11420)	8/11/2001 2:24:01 PM
From: MIKE REDDERT	Read Replies (1) \| Respond to of 12623

OK... lets see if this is a reasonable gamble. First, let me tell you that I am a trader, so I won't discuss fundamentals too much except to note that: 1) PE valuation arguments have little meaning in the short to intermediate term and whether or not Cien can fit into those big shoes is a matter of speculation at this point. 2) Cien is a sector leader/favorite, and has yet to fumble the ball... a certain premium is always assigned to stalwarts like this. 3) ... and most importantly... as soon as you allowed Cien to occupy an "over-sized" position in your portfolio, you became a trader, dependent on short term price fluctuations which have little correlation with long term fundamentals. You are forced into "trader status" because, if you are incorrect, this position can harm you in a disproportion manner, forcing you to trade the stock... to capitulate. 4)Thus, in your situation, fundamentals are meaningless. So... now that you are a trader, let's explore that route... traders take big short term positions... and we know: 1) That traders will play Straddles and Strangles in an uncertain situation, but they will seldom commit to the underlying prior to a potentially explosive news driven "event". They act that way because they know that they can go broke... or create severe damage to their accounts. 2) "Stops" have no meaning once the news is out. Thousands of traders will immediately cancel bids or offers. Even professional traders will be unable to execute trades between the 2 points of revaluation. Part time traders don't have a chance. Example MSFT 1/18/2000- MSFT 10/19/2000. 3) Traders will "punish" the unwise... bet on that one. Cien has two "events"... the earnings and the guidance. By your own judgement, Cien will "torture" you on the former and leave you dependent on the latter. You are tossing the dice, so to speak... maybe you win, maybe you don't. The one certainty is that if you consistently apply this policy the market will eventually take back anything that you have gained and more. JMHO Good Luck Mike