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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (5085)	11/16/2001 10:59:00 AM
From: Logain Ablar	Read Replies (2) \| Respond to of 33421

Hi John: DVN is giving a pretty strong sell signal. I'd guess mid to low 20's if oil is going to $12 - $15 range. Maybe lower since they have a higher debt burden than the last downturn. stockcharts.com I've never purchased converts before but one would think they are a safer way to invest in a company during a downturn. Many of the semi cap equipment stocks recently issued converts. Problem is most when issued are private placements. This market has been strong. The Afgan situation has helped recently but still some underlying strength. Notice how corporations (T & F recent examples) have been ponying up to the bond window. This does bode well for the companies by reducing the debt burden (other fundamentals come into play of course), assuming they are replacing more expensive debt vs. just increasing it.

To: John Pitera who wrote (5085)	11/16/2001 12:11:31 PM
From: OX	Read Replies (1) \| Respond to of 33421

why is it that the buy-convertible/short-stock approach won't work in a rising stock price environment? you're protected as well but will only make the yield. I think the problem is that, as Tim posted, that a lot of convertible offerings aren't for tiny retail investors. the naked calls idea could really backfire. the convertibles aren't converted until a specific date right? if the stock rallies significantly, you may be at risk of early assignment. of course being short stock, you might lose your "borrow" too.