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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Paul V. who wrote (23227)	8/23/1998 11:15:00 PM
From: Dr. Bob	Read Replies (2) \| Respond to of 70976

For those of you who think AMAT is headed nowhere in the near future, and therefore plan to wait for lower prices, why not buy the stock and sell out of the money calls? If it makes a run sooner than expected, your stock will get called away at a small profit, which is better than having waited and missed it entirely. If it struggles, as expected, you can keep selling calls until you think it's ready to run, and then you already have the stock, at a lower basis than where you bought it, and you can buy back your calls, if necessary, to clear the road for the eventual runup. Other than tying up your money in the purchase of the stock, are there any other disadvantages to such a strategy (assuming, again, you think the stock is going to flounder for awhile)? Bob

To: Paul V. who wrote (23227)	8/24/1998 9:42:00 PM
From: John L.	Respond to of 70976

Buying for the long term, 5 years or more has paid off in the past and will again in the future. Opinions from a diverse group gives us food for thought and expands our data base. I will retire on my AMAT stock, but I would like to make some short term money to have fun with until retirement. This is the first down trend in the stock market in a while, the first bad experience for many investors. The fact that so many investors are feeling pain from there stock investments makes me think a quick drop could happen any time now. I want to have some cash left to invest if we get a 20% dip from here.