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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Luc Glinas who wrote (22316)	3/17/1998 7:49:00 PM
From: rudedog	Respond to of 97611

let's hope it's not more bad news...

To: Luc Glinas who wrote (22316)	3/17/1998 8:07:00 PM
From: Diamond Jim	Respond to of 97611

You are responding to this message from Luc G‚linas on Mar 17 1998 7:46PM EST "EXPECT MORE" (1997 annual report) What do CPQ mean by that?? -- I don't know what you are talking about, I didn't post that ? jim

To: Luc Glinas who wrote (22316)	3/17/1998 8:11:00 PM
From: space cadet	Respond to of 97611

Hey guys I smell that smell of fear and heartbreak. Normally that means it's time to get into the stock. My favorite time to get in, in fact. Like, as someone mentioned, when ORCL collapsed a while ago (which I missed getting in on, my money was all tied up in another profitable stock). However, I'm not jumping in because despite the groans of this board I think cpq is going to be down and out for a while, at least thru the summer if not the entire year. Here's why. First, the sub-$1000 computer is a killer for cpq and the entire industry. It just gives cpq and its management and strategists much less leeway to be imaginative and come up with winners. There is zero new tech coming out these days, so all anybody wants is a reasonable cheap clone computer. Looks like the days of innovation may be over. All those layoffs at research labs and r and d centers may finally be taking its toll on the US. Sure we raised short term profits but now where are the new ideas and new products? Along those same lines, unlike Jan and Feb, I see a market correction coming soon, at least to hi-tech. Probably 5-10% correction for a month or so. Not a good time to be going long. And cpq might have bit off more than it can chew with the DEC merger. Is there any chance that it still can be called off? What would be the penalty for cpq if it did that? Can you believe it, DELL actually has a bigger market cap than cpq now???? Amazing. I think this cpq blowup is bad news for all of high tech not just cpq. It may be the first sign that the long bull is finally getting a little tired, finally. Very short term, I think cpq looks oversold here and I would expect it to bounce back to 25 at least. After that it should test its support at 20. If it can hold there and make a base then perhaps by the summer or fall it could start up again, but probably a lot more gradually than it moved these past couple of years. Some free advice: I think options are incredibly dangerous here. Refuse to pay for any time value premium. Probably only buy leaps if and when the time value premium has collapsed (which may take several months most likely). Actually, the smart cpq owners should have been selling covered calls throughout this fiasco, thus lowering their cost basis by several points each month. But how many people actually succeeded at doing this. Fortunately I did do this last fall in the market free fall (on several other positions I had). If I hadn't done this I would have been wiped out. Even now option premiums look overpriced on cpq so covered calls is a good strategy still, if you insist on hanging on to your positions. Anyway, it will be interesting to see what cpq does. I definitely think it's an ominous sign for the rest of the hi-techs, especially the hardware side of things.