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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Lee Penick who wrote (11190)	11/15/1997 11:20:00 PM
From: akidron	Read Replies (1) \| Respond to of 70976

i'm kinda worn out posting... have said most everything I wanna say before friday.... however the subject of sort term options and premium is not overdone so I'll give you my thoughts... I'm a gambler... I like the thrill... I like stocks better than football.... beter than horses.... I don't buy many stocks... I find it confusing... I hate the phrases risk averse and portfolio, as for me risk is everything... My prefered stratergy in almost any investment is buy the stock, learn how it trades.. play the events along the way with short term options... I really don't care about the premium because the premium only reflects to quality of the opportunity. the biggest mistake people make with short term options is to play events without looking at the momentum of the stock leading into the event... For example, if a stock moves stronglty to the upside before earnings, it is likely that the stock has the good news priced into it... In that situation I stay away... However this is not the case with amat and it hasn't been the case for the past three earning reports... on each of these occasions the stock has had room to move on good earnings, because the company hs been recovering from a massive bear move that saw the stock price decline to 21/22. It has bee relatively simple to guess that the co. would beat estimates, because the estimates were conservative, built to be exceeded as the co. is cogniscent of the need to aviod more bad news.... this current quarter is the most extreme example of this phenomenon.... the stock was ahead of itself at 108, not because it is not worth 108, but because the 108 was forward looking, based on an unproved scenario. The scenario is that amat is becoming an market force that is somewhat the master of its own destiny, in a market that is stratigcally without paralell in the digital world we are moving towards... in this past quater the stock corrected 40%+... this correction is based on macro economic events that clouded the short term future for amat, but more than anything clouded the whole investment climate... I chose to sell very early because I felt an overreaction coming and I hate to see paper profits unrealized.... my guess, for reasons I have posted until I am now quite blue in the face, is that amat has escaped harm in the SEA currency debacle and that in fact the company will prove it unique stratigic position this quarter and announce earning of at least 50c for the quarter, which will cause estimates for next year to rise to $2.50 +... if this happens it is a momentous valuation event that will cause the stock to be revalued friday... no matter where the open interest on the options is... in fact I assume that the smart money (MS, GS, and LEH) will start piling in on Monday and the open interest will be spread over so many strike prices it will become a non factor... I am therefore very bullish on AMAT 35s, 37.5s... I also have 30s, bought at the low... I think these options (nov) provide a speculator with remarkable opportunity... That said they could expire worthless... maybe Clinton bombs iraq, oil future rise, the market falls and the opportunity is taken away by macro events... it happens... so I bought myself some stock at a $ cost averaged 38% discount to where I sold it, which I'll hold till it's worth something more... I hope this helps. Incedently I have read all the comments on the greek issue with interest an should just like to add that I recently was involved in a situation where a COO made a similar remark in jest...he is not a bad man... and he thinks he's fuzzy zoeller funny too... the problem is that these remarks hurt... they are designed to mock and ridicule, otherwise it would be pointless to utter them. I have now said my piece except to say that I personally am totally comitted to a multi enthic, multi cultural, society built on brillience and compassion. I will always jump in when I feel this ideal needs defending... unapologetically....