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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Inga who wrote (26821)	12/7/1997 3:13:00 PM
From: Sowbug	Respond to of 61433

<<Lee, have you ever considered the purchase of short-term put options (1 or 2 months perhaps) to protect (lock in) your WDC paper profits when your share price doubled from 26-27 to 53+>> I'm not answering for Lee, but I've been in that situation before and the reason I didn't buy puts was simply because I always thought options were risky -- a sentiment I think many investors hold. But I recently figured out the obvious -- that options in this situation are a very reasonable form of insurance. If you have 100% paper gains and are willing to concede 15% of the profits in exchange for being protected against a 90% drop (which is very possible in tech stocks), then puts are the way to go. Unfortunately, since that revelation I haven't been in the position of having huge paper gains.

To: Inga who wrote (26821)	12/8/1997 12:03:00 AM
From: Lee Martin	Respond to of 61433

<< Can you tell me your reason for not buying the puts to gain a 1-2 month window to see how the market treats WDC since it becomes slightly overvalued at 53-54 at that time. >> Hi Lanny, I guess I'm just not that sophisticated yet. I try to use the KISS principle (keep it simple stupid) style of investing. I try to buy undervalued stocks like INTC and DELL were just plain cheap for several years. When I couldn't find another INTC or DELL, I settled for a stock undervalued due to what I thought were temporary problems (WDC). I thought WDC and QNTM were kicking SEG's butt and that the DD selloff was a result of problems confined to SEG. So I bought WDC at 27. Everybody else apparantly came to the same conclusion as it ran to 54. I realized it had come too far too fast and was willing to ride out the usual consolidation etc. The last warning from WDC caught me by surprise, the stock closed at around 49, they warned after the bell and it opened the next day around 40. I held that day, waiting for a relief rally. When we didn't get it, I sold the next day. I realized that the flaw in my theory was happening (over supply problems were not confined to SEG, but were industry wide). WDC is at 18 and change now. Currency problems in Asia are causing ALL industries over there to dump product on the US market to raise US $'s. I think these problems are going to last for a while. WDC is a great co. caught up in a situation that they have little control over. When this is over they will shine again. I think these problems are most likely already discounted in the stock price but negative sentiment can cause stocks to overeact on both the up and down sides. Re: ASND, one point that I haven't heard brought up is the fact that the Asians to my knowledge are not big competitors with ASND. IMHO this is a big plus for ASND, as the Asians CAN'T DUMP WHAT THEY DON'T MAKE ! So look out semi's, semi equips., DD's, DRAM, autos, and any other producer of commodity products that competes with the Asians, and HOORAY for those that use these products, consumers, boxmakers, retailers who buy from Asia etc. Question: Does anyone know the $ value of materials and labor ASND receives from Asia ? Regards, Lee PS- I also bought ASND because of what I perceived as short term problems with the k56flex rollout. Again at 41 my timing was lousy, but IMHO the problems are behind us, and I see nothing on the horizon which would keep this stock from going significantly higher over the next 6-12 months.