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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: valueminded who wrote (29927)	7/17/1998 11:24:00 AM
From: Knighty Tin	Respond to of 132070

Chris, I think the telecom cycle is getting long in the tooth and the high price Tellabs is paying for Ciena will hurt TLAB. But, I prefer to play the Ciena side, as it is the weaker link, and in the event the deal is called off for some reason (low probability), Cien will crash. CIEN is mostly roaring because TLAB reported gangbusters earnings. I expected that. I just don't expect them to be as great in the future and at 60 times earnings, they have to continue to explode to maintain share price. I do this occasionally with takeovers when I think both stocks are overpriced. I buy the puts on the weak sister. The bad news is that they occasionally stop listing those puts, but, until they do, I prefer to put Ciena instead of TLAB. I recommend the Dec 116 puts, but further out would not bother me. Since I use 90/10, I will probably be further out eventually. It was not really a comment on when I think bonds will crash. It was more of a comment on what I consider the best put for the money right now. MB