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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Shell R. Poust who wrote (8415)	8/29/1998 11:03:00 AM
From: Herm	Respond to of 14162

CPQ PLENTY OF FAT TO CUT! CPQ growth rate = 20.54% vs. 63.5 P/E at this point and still commands a premium. For sure, the markets have been spooked this past week. CPQ And The Big World Picture! Russia's infrastructure problems and those nukes will be one of the ace cards Russia will flash at Clinton during his visit next week. Those nukes and the potential damage if they fall into the wrong hands is more of a threat than the Asian Flu ever was! The Russian government needs solid currency and clout at this point to save face! Perhaps they will try to sell us nukes for cash, oil for cash, gold for cash. That is all Russia has to barter with. Pump more oil and the Arabs will bark, buy more nukes and our defense industry will bark, buy cheap gold and deinflation may start to spread over into this country. The point is, until all that is settled and we know what the deal is, nobody knows who will get squeezed and who will rake in the business. Cash is king right now! CPQ may very well continue to slide downward. The German goverment is getting hit board side with the default of loans to Russia. Check out how much biz CPQ trades in the German markets: Exch. Currency Ticker Last Trade Last Sale NYSE US Dollar CPQ 08/28 05:01 pm 30.75 Prev. Close Net +/- % +/- Volume 32.5 -1 3/4 -5.4 18,633,200 --------------------------------------------------------------- Exch. Currency Ticker Last Trade Last Sale Stuttgart Deutsche Mark CPQ0 08/28 10:44 am 56 Prev. Close Net +/- % +/- Volume 59.5 -3.500 -5.9 39,457 --------------------------------------------------------------- Exch. Currency Ticker Last Trade Last Sale Frankfurt Deutsche Mark CPQ0 08/28 10:53 am 55 Prev. Close Net +/- % +/- Volume 60.5 -5.500 -9.1 29,043 --------------------------------------------------------------- Exch. Currency Ticker Last Trade Last Sale Dusseldorf Deutsche Mark CPQ0 08/28 10:13 am 55.1 Prev. Close Net +/- % +/- Volume 60.5 -5.400 -8.9 10,654 --------------------------------------------------------------- Exch. Currency Ticker Last Trade Last Sale Berlin Deutsche Mark CPQ0 08/28 08:05 am 56 Prev. Close Net +/- % +/- Volume 59 -3.000 -5.1 10,147 --------------------------------------------------------------- Exch. Currency Ticker Last Trade Last Sale Munich Deutsche Mark CPQ0 08/28 08:49 am 57 Prev. Close Net +/- % +/- Volume 60 -3.000 -5 7,261 --------------------------------------------------------------- Exch. Currency Ticker Last Trade Last Sale Hamburg Deutsche Mark CPQ0 08/28 10:01 am 56 Prev. Close Net +/- % +/- Volume 59.7 -3.700 -6.2 1,360 --------------------------------------------------------------- NYSE: (CPQ : $30 3/4) $46,177 million Market Cap at August 28, 1998 Ranks 55th in the Fortune 500 on Revenue & 59th on Profit. Employs 18,865. Trades at a Premium PE Multiple of 63.5 X, vs. the 25.1 X average multiple at which the Computers SubIndustry is priced. Aug 28 30 3/4 -1 3/4 -5.38% 32 13/16 30 18,635,100 Aug 27 32 1/2 -1 15/16 -5.63% 33 13/16 31 3/4 21,174,700 Aug 26 34 7/16 - 3/16 -0.54% 34 13/16 33 1/8 11,892,800 Aug 25 34 5/8 - 15/16 -2.64% 36 1/4 34 1/2 10,676,400 Aug 24 35 9/16 - 1/16 -0.18% 37 1/2 35 1/8 8,636,000 THE LAUGHING STOCK BROKER UNIVERSITY Do you remember when you were in school and "those kids" that did not seem to realize that the future of lives would for the most part be determined by what they did/or did not do/learn with those learning opportunities? "Why do I have to know this stuff?" Indeed, many of you (and me) have been through that at some point! Well, investors! Here is your second chance for another lesson! School is now open and all of you are requested to enroll into The Laughing Stock Broker University Class right now! We have discussed many times how we can use CCs as an effective hedge tool (combined with PUTs as a sideshow) for minor downside protection durning NORMAL price cycling. You can actually turn a profit as the stock goes down. On the other hand, when you get an overall major correction like we are now experiencing, shorting and PUTs are the name of the game to large profits. In fact, there is more money to be made in short periods of bear trends. BEAR TRAPs are neat and sweet! Here is a very goo article on the subject of shorting with a profit/loss calculator. I think everyone will enjoy it and realize what they may be missing out on! abcnews.com

To: Shell R. Poust who wrote (8415)	8/31/1998 4:53:00 PM
From: Herm	Respond to of 14162

BEAR TRAPS GETTING FULL FAST! Well, another hit for CPQ today. Cheap PUTs are paying off bigtime! I hate to say it! CPQ has plenty of baby fat to trim! TIMBER! NYSE: (CPQ : $27 7/8) $42,203 million Market Cap at August 31, 1998 Ranks 55th in the Fortune 500 on Revenue & 59th on Profit. Employs 18,865. Trades at a Premium PE Multiple of 58.1 X, vs. the 22.7 X average multiple at which the Computers SubIndustry is priced. Compaq (NYSE: CPQ) Time: 3:12PM Last Trade 28 1/4 Change - 2 1/2 (-8.13%) Volume 15,699,900 Avg.Volume 14,124,600 Prev.Close 30 3/4 Open 31 1/4 Day Range 28 1/8 - 31 1/2 Date Close Change Day High Day Low Volume Aug 28 30 3/4 -1 3/4 -5.38% 32 13/16 30 18, 635,100 Aug 27 32 1/2 -1 15/16 -5.63% 33 13/16 31 3/4 21,174,700 Aug 26 34 7/16 - 3/16 -0.54% 34 13/16 33 1/8 11,892,800 Aug 25 34 5/8 - 15/16 -2.64% 36 1/4 34 1/2 10,676,400 Aug 24 35 9/16 - 1/16 -0.18% 37 1/2 35 1/8 8,636,000