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.

Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Nancy who wrote (15445)	12/10/1997 8:40:00 PM
From: Tom Trader	Read Replies (3) \| Respond to of 50167

>>do you have contacts in China to give you some read of its economic health ?<< Hi Nancy -- no I don't have any contacts in China but let me see if I can find out through my contacts in Malaysia/Singapore whether they have any way of getting me information. >>can China / Hong Kong stay on course by themselves ? Probably not for long -- if the crisis in the other countries deepens. I think the risk in the case of China is the currency -- in fact, I think that the risk in the case of most of the SE Asian markets at this point is more the currency instability than the potential for major downside in the stock valuations in the context of the local currency. >>I can tell you confidence level in Hong Kong is very low << How reliable is your information and what sections of the population and sectors of the economy is it affecting? I am not doubting what you are saying as much as seeking clarification. >> people have unused gift coupons rushing to exchange them), department store run, gift coupon run, you name it<< Sounds like "cheap and cheaper" at work here:) >>would you mind to share your views of quality stocks ? which ones you consider are quality stocks ?<< Nancy, I don't have any magical names -- just the ones that we have all talked about many times--and most are other people' s ideas -- especially Judy. I will post them as I buy them. What we need to do is to overcome the fear that dominates our thinking and buy the market leaders with appropriate protection. Over the years I have made my best investments when I have taken positions when everyone was talking gloom and doom -- for example I bought SLB based on a Templeton recommendation on WSW in 1985 when no one wanted it -- also bought HAL at that time. BTW, despite the hits that the oil sector has taken, I am very bullish on the oil sector -- I believe that the sector and especially the drillers are in a secular bull market. The situation in Asia cannot be ignored -- so what I am going to do is to buy puts in each stock that I go long, if they have Asian exposure -- it will increase my basis but I will be able to function without worrying about any major downside. For example, if I bought AMAT at 30, I might buy puts 3-6 months out for strike price 25 or 30 -- just in case the worst happens. I think that 3-6 months is enough time because by then we should have a better sense of how the Asian problem is playing out. I will also sell covered calls -- may be even do ratio-writes to earn some premium income and recover the cost of the puts. I don't expect the sectors that have been worst affected by the Asian problem to recover any time soon -- but I am willing to own some quality stocks and be patient. Remember that I am talking investment as opposed to trading -- and I am not interested only in the tech sector. For example there is a stock --PHYC--that is depressed because of a recent merger that is felt will be dilutive. The company is the premier company in the physician practice management area and has excellent management. This will be a $50 stock within 2 years ---currently around $24. It is very tough to buy when there are grey clouds everywhere and the market is acting up ans stocks seem to be in free-fall -- what one has to assess is the confidence level that one has in the US economy one year out, 5 years out and thereafter. I have complete confidence in that respect. Ironically, my views and those of Iqbal in a macro sense are very similar -- we only differ in terms of the some of the conclusions as it relates to recent market performance. Take care