Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (149329)	2/6/2002 12:16:39 PM
From: reaper	Read Replies (1) \| Respond to of 436258

(almost) never use options. can't stand to lose time premium, and frankly i don't much care for leverage. i go after companies where ROIC<WACC, that are levered and/or have bad accounting. if ROIC<WACC, over some long period of time the stock will trade at book or below. but you have to wait for the liquidity crisis to hit. since i am shorting companies that are levered and will at some point have liquidity issues, i myself have to stay un-levered and highly liquid in order to wait them out. thus i don't use options. now, as Tip & Sun know I've bent that rule a little bit recently as my balance-sheet work has revealed a handful of companies where I thought earnings would miss and/or conference calls would go badly (SMTF and VRSN in particular, recently) where I have felt sufficiently confident to use a tiny bit of levered capital. but mostly i just sit quitely on my hands and wait. Cheers