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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (45459)	5/30/1998 4:21:00 PM
From: Logos	Read Replies (1) \| Respond to of 176387

Re <<Hazem, I'm having difficulty following your quartile approach. I think my brain may not be in gear, so if you could help me out by using some hypothetical numbers I would appreciate it.>> OK, here's a hypothetical example. Say I have $100,000 to invest (to simplify, forget margins for a minute), and I like DELL, MSFT, and PFE. I like DELL most, so I split $40,000 into DELL, $20,000 into MSFT, $20,000 into PFE, and $20,000 as last resort reserve. Let's take DELL: Say DELL is at $80, which I think is cheap. It might fall further or it might stabilize and run up, so to cover my bases, I put 2 quarters ($20,000) into DELL now, for 250 shares. It drops to $75, which I think is really cheap, but it might fall even further. So I place another quarter ($10,000, for about 130 shares) into DELL, giving me 380 shares, and I'm 3 quarters invested in DELL, with $10,000 remaining still assigned to DELL in case of an even further crash. Say the crisis eases and it goes to $85, which I think is a reasonable price (PE of about 60, which is OK for DELL), so I sell 1/3 of my shares (because I'm 3/4 invested) bringing me down to 253 shares and $20,795 and I'm now half invested. Then say Dell climbs again, to $110, for a PE of 78, which is very high for DELL. So I sell 127 shares, leaving me with 126 shares and $34,765. The idea is to pick a company you really trust, and have a range in your mind for the price of the stock. As the stock falls to the bottom of that range, you buy more stocks, in quarter value groupings. As the stock rises towards the top of the range, you sell, again in quarter groupings. But always have some shares, in case of a run-up, and always have some cash, in case of a crash. It's a simple enough strategy, if followed. Hope this helps Haz