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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Timetobuy who wrote (4722)	11/11/2001 1:40:04 PM
From: FR1	Read Replies (1) \| Respond to of 99280

timetobuy, I think we are saying the same thing. Short term option buys are just gambling. If the fundamentals of the underlying are good and the market direction seems to be up in the longer term, then itm or atm calls are a good way to establish a position - especially if you were going to buy the common anyway. I use DEEP itm options because there is usually little premium even with time left on them. (I don't typically buy leaps). Of course, if I'm wrong, the option is going to move one for one with the stock. Well...if you are wrong it would not move one for one because as you approach the atm call price the option premium rises sharply giving you a greater loss if you have to cover and exit the position (peaking around current price). You are right, though, about how deep itm calls have little premium and offer the greatest reward provided you have the bankroll to buy them. Nice move on brcm..... What leaps are they? I bought the '03 leap with a strike price of 30. Somewhere between now and then I will take possession. As the stock price gets higher there comes a point where waiting longer makes no sense since the premiums are tracking 1:1 to the underlying. I buy leaps because it is a wacky world and you need space to absorb a 911 event if it should occur. IMHO, I like to look out 1-2 years and ask: "where is all the growth and what is the trend?" Personally, I feel the FED will have to be encouraging growth over the next year or two. So the question then becomes what areas of the economy are under served and have the greatest demand? The first obvious answer is the broadband deployment. We have hardly scratched the surface and it will not end until we have FTTH (Fiber To The Home). Trillions of dollars when you consider that the entire backbone has to be converted to optical. So along those lines I go for the suppliers like AMCC, JDSU, PMCS, BRCM. The earnings stink but that is because orders stopped due to the FED tight money policy. The demand is still there, cheaper money is now there and the y/y comparisons will be very favorable. So now is a good time to build positions long and in a year you have a strong double digit gain. Waiting on the sidelines and trying to beat the market to the news is a losing game. Other than that I like some banks like C, JPM, BAC, NCC because they will do ok and have nice dividends. For safety's sake I throw in some retailers like WMT & HD.

To: Timetobuy who wrote (4722)	11/11/2001 2:09:50 PM
From: FR1	Read Replies (2) \| Respond to of 99280

I sold my brcm shares at 30. Sigh I don't particularly like the CEOs - too much like the "Larry Ellison showboat". However, they are aggressive and BRCM does have a very strong position in some of their product lines (little competition). It is all a momo question of whether or not you feel the economy will come back. Most people feel it will so they are pricing it into the stock. If you wait to see the numbers and the economy does come back it will already be priced into the stock. MSFT is classic along these lines. I bought at 45 because a company break-up seemed technically impossible and now I will just sit on it. By the time the good news came, it was already priced into the stock.