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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (2123)	8/19/2001 5:54:36 PM
From: Dan Duchardt	Read Replies (2) \| Respond to of 5205

Mucho, i will be the first to admit that my own experiences color my worldview I, for one, would never hold that against you, or anyone else who makes that admission. Experience should teach all of us. "Investment policy (the allocation of assets) dominates investment strategy (market timing and security selection), explaining on average 93.6 percent of the variation in total [pension] plan returns...Although investment strategy can result in significant returns, these are dwarfed by the return contribution from investment policy--the selection of asset classes and their normal weights." Loosely translated, "if you put your money in the right assets, and avoid the wrong ones, you come out way ahead." No question about it. But I, or anyone else can look backwards in time and identify the best and worst asset allocation. There should be no surprise that there is a large disparity between people who were in the right places and people who were in the wrong places, but right and wrong in this context might mean guessed right or wrong, not that they had a superior or inferior way of approaching the market. i sold out of QCOM through the spring 00 months for an average of 126, switching into SDLI in april/may. i sold out of SDLI starting in the summer of 00 and was totally out by the end of the year, getting about a double on average. both of these bets ended up being quite effective, in the financial sense. yet both of these stocks have fallen precipitously from their peaks, and even from where i sold them which was already well below their peaks on average. SDLI, in particular, would only be worth 29.45 today (3.8X the JDSU price of 7.75), which is less than 1/10th my average sell price. thinking about this in retrospect [emphasis added], i think my SDLI bet was intellectually wrong (stupid) even though it worked financially--it was only a matter of luck in the markets that it went up before falling precipitously. i could say the same thing about QCOM, though its swings in the past year have not been as extreme. I don't know where you got into QCOM, but if you had it for a year you enjoyed maybe 1000% gain.. or leveraged with calls maybe a whole lot more. How would you have done if you were "smarter" then and followed the asset allocation you are using now? Some of us were smarter then and let the whole bubble grow in front of our eyes knowing it couldn't last, and not letting ourselves get caught up in the wave. Who is better off? As they say, sometimes it's better to be lucky than smart. And isn't it largely a matter of luck that some funds in the study that came out way ahead of the ones that did not do so well? i decided momo tech investing is basically a sucker's game at this point in the market. i cannot understand a mentality of complacency in the face of precipitous losses No question that the market now is very different from what it was then. Momo is indeed a fickle friend here. But a lot of people now are not chasing momo, and many are not as complacent as you might think. Five years from now we are going to look back at this time, and we will identify with complete certainty who had the best asset allocation over the coming period. I may have my own ideas about which sectors and allocations will be best in the coming era. One thing I'm pretty sure of is there are going to be some companies and sectors that emerge from this some day, and then were going to be hearing everyone talk about how smart the people were who "buy when there's blood in the streets." Dan