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Technology Stocks : The New QUALCOMM - Coming Into Buy Range -- Ignore unavailable to you. Want to Upgrade?

To: thinkclear who wrote (1024)	8/21/2007 1:40:09 AM
From: manalagi	Respond to of 9129

Well, from where the stock is now, it should be considered where is the best place to have the money now. This is exactly my dilemma. The only stock that is attractive to me is Garmin (GRMN) which make portable navigation. Thomas Brothers maps are going out of fashion like my collection of laser disc. You go out of town and you take this portable unit with you, and you will find the direction where you are going. They sell software updates just like Gilette selling razor blades. QCOM might have a good future under the right management.

To: thinkclear who wrote (1024)	8/21/2007 8:11:54 AM
From: carranza2	Read Replies (3) \| Respond to of 9129

Think of it this way: Since Paul's savvy use of options has given him a negative cost basis, the return on the dividend is much, much higher. My math skills are insufficient to calculate a rate of return on something which has a negative cost basis so I'll assume a cost basis of .01 for the sake of discussion. The rate of return assuming a nominal cost basis of .01 and a dividend of .56 is a phenomenal 5600% per year. In essence, he has 'bought' an income stream of .56 per year per share for less than .01 a share! I know it would be impossible to find anything safe which provides that kind of yield. If I were in Paul's shoes, there is no way I'd get rid of the shares so long as the dividend is safe. Getting rid of his shares now in order to get a better rate of return is simply not a viable alternative because he would have to find an investment which provides him with a better than 5600% rate of return, something which is only theoretically possible. Since he has a nominal cost basis of .01, the appreciation assuming a 37 share price is an even more phenomenal 370,000%. Hope the IRS isn't waching.

To: thinkclear who wrote (1024)	8/21/2007 8:33:16 AM
From: manalagi	Read Replies (1) \| Respond to of 9129

Hope the IRS isn't waching. I have been paying taxes on those QCOM options since they were either expired OTM or I covered before expiration. (I sleep well at night). Here are the ways to deal with IRS: - If the stock on which you write a call is not sold (the call buyer does not exercise the call), then the option is considered a separate transaction, to be reported as a gain. - If the stock is called away, i.e. the option is exercised, then the option proceeds must be added to the sale price of the stock. Therefore, under IRS rule, my cost basis is still $ 8/share, but some times I like to think that the option proceed reduces the cost basis to make it negative. No wonder Steve Forbes keeps promoting flat tax!