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.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (21123)	5/2/1998 4:43:00 PM
From: Alias Shrugged	Read Replies (1) \| Respond to of 95453

LT Thanks for taking the time to post your views. The Market can be a heart breaker (and may soon be a ball breaker - or whatever the female equivalent expression would be.) This sector could see significant additional gains - if oil continues moving north, sector PEs will look very attractive to rotating money. Still, this market strikes me as much riskier compared to 1996 and 1997 (truly enjoyable times to be invested in this sector). I would not be buying calls, especially the far out months. Selling calls will soon become more attractive. Buying puts will make lots of sense at some point. Mike

To: Lucretius who wrote (21123)	5/3/1998 12:30:00 PM
From: jbe	Read Replies (1) \| Respond to of 95453

LT, more comments on your "Coming Bear" scenario: I don't grasp all that "head and shoulders" stuff, but I concur 100% on point 4: Internet stocks continue to explode every day (these trash stocks are a sign of rampant speculation)... What puzzles me is why stocks that are clearly good values languish, while trash stocks soar. I don't recall that as being the case during last year's stock market boom (which is when I began my independent investing career). Then, I got the sense that if one picked stocks wisely, one could expect, on the whole, a reasonable profit. (Of course, as a newbie, I could have been misjudging the situation.) Now, the trick seems to be to find the trashiest stock possible if one wants a wholly unreasonable profit!! I get very uneasy when irrationality rules, and, like you, I tend to expect the worst in such cases. Now, a couple of questions for you. 1) Do you think that the exploding derivatives market is affecting the situation? Rather, it is affecting the situation, obviously. The question is, how much. All these puts, calls, etc. Would-be long-term novice investors like myself don't even understand how this stuff works, but we do understand that the system has a short-term horizon, and that the derivatives trade is a new factor in the market, which is liable to have an unpredictable effect on the coming crash/correction. (Excuse me if I have posed the question ignorantly; I freely confess to ignorance in this respect.) 2) What about the tax consequences of selling out? Recently, I finally lost patience with 3-Com, and sold my shares, although they had appreciated by about 500% since my former financial advisor bought them for me years ago. (I got tired of keeping what has been dead money for more than a year.) But I had to pay almost a full 20% of the money I got from the sale to the IRS! That is, of course, more than I would have lost in a 10-15% correction. And, generally, when people talk about "taking a profit," they always forget to mention the tax consequences, even when it is a short-term capital gain (35%!!). I would guess that it is the fear of getting whacked for taxes that keeps some people (like myself) in, even against their better judgment. jbe