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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (929)	2/19/1998 5:58:00 PM
From: Defrocked	Respond to of 86076

Pete, don't you get it yet?<g> You pay out $150 out one year from now, the $5.25 grows at 25% for ten years thereafter, without interruption, at which time you sell the stock for six times the purchase price (for a 20% riskfree return) to someone else who thinks MRK will continue to grow for ten years at the same assumptions. It's easy! And everybody's doing it!<g> Obviously, the stock is undervalued since its a lock that 20% will be realized.<g> No risk and all reward, so load up and join the party!<g> (I forgot to mention that the strategy requires a long term outlook<g> Furthermore, forget MRK and go with DELL cause its gonna double every year<g>)