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Strategies & Market Trends : You buy a stock. It goes down, now what? -- Ignore unavailable to you. Want to Upgrade?

To: Bald Eagle who wrote (36)	7/8/1998 12:53:00 PM
From: Tony van Werkhooven	Read Replies (1) \| Respond to of 112

Wiseowl- interested in commenting on another stock- AHG. Has been a disaster since the merger of Abbey and Homedco. I had a very low basis on my initial investment of 8, the result of a private offering of a predecessor company. As the company was running into problems on its receivables, I assumed (after various discussions with IR) that it was a temporary problem associated with the merger etc. Only things kept getting worse. When the company hired Goldman to explore alternatives (i.e. sale) I was looking for a sale in the range of low 20's. then high teens. Through this entire mess I bought more at 14 and at 12 (doubling my position), thinking that either a restructuring or sale would take place. The stock dropped as low as 6 recently, new CEO , new board, actions are starting to happen and I felt that we had seen the bottom. Over the last week or so the stock had crept up to the 7 range. Well this AM it appears that the company received a request for info from the feds regarding billing practices- the stock dropped approx. 20% this AM. My personal inclination is to hold on- now is not the time to sell, I would be selling into extreme weakness. However, no telling what problems could turn up in any investigation. So, what would you do and what would you have done as events unfolded in similar circumstances? 20/20 hindsight says that the problems were much more severe and systemic than I realized and that the then current management was incapable of dealing with them. However, that was far from clear at the time. This one sure rates as my all time loser. Tony

To: Bald Eagle who wrote (36)	7/8/1998 9:24:00 PM
From: Investor2	Read Replies (1) \| Respond to of 112

I bet your broker thanks you for all of the business you give him. You must use an online broker that offers options? Which one? How do you minimize commissions with all the options trades? Thanks for your case history. Best wishes, I2

To: Bald Eagle who wrote (36)	7/9/1998 10:49:00 AM
From: Bald Eagle	Read Replies (2) \| Respond to of 112

Update on personal case study on ADPT using covered calls to reduce loss: DATE ACTION BASIS PRICE 2/13/98 Bought ADPT at 23 1/8 23 1/8 2/13/98 Sold Mar 25 calls at 1 3/16 21 15/16 3/23/98 Sold APR 22.5 calls at 1 1/8 20 13/16 3/27/98 Bought APR 22.5 calls at 9/16 21 3/8 3/27/98 Sold APR 20 calls at 1 7/16 19 15/16 4/7/98 Bought APR 20 calls at 3/8 19 3/16 5/1/98 Bought MAY 22.5 calls at 7/16 19 5/8 5/1/98 Bought 1/3 more ADPT 21 1/8 20 5/4/98 Sold JUN 20 calls at 1 5/8 18 3/8 5/14/98 Bought JUN 20 calls at 7/16 18 13/16 6/25/98 Sold JUL 15 calls at 2 16 13/16 7/9/98 Bought JUL 15 calls at 5/16 17 1/8 So ( ignoring commissions ), my basis now for ADPT is 17 1/8 versus the 23 1/8 and 21 1/8 that I actually paid for the stock. I decided to buy back my JUL 15 calls in case of a surge next week. The options point of maximum looks to be 17 1/2 or 20. I'll sell some more calls after next week.