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

To: Lone Star who wrote (32160)	9/3/1998 10:52:00 AM
From: yard_man	Read Replies (1) \| Respond to of 132070

Now, I don't know. Only put candidate that I have which is close to recent highs is EK. You might look at that one, but vols are pumped up now. Perhaps, you could look at OEX puts on a rebound or the DRG index as MB suggested on a bounce. Others can give you better advice -- I would urge you not to "fire all at once with 10k, unless that is less than a just one percent of your funds. You might consider a few shorts along with the puts -- I know MB doesn't like them, but the tone of the market has definitely changed as of late.

To: Lone Star who wrote (32160)	9/3/1998 11:38:00 AM
From: Joseph G.	Read Replies (2) \| Respond to of 132070

You better be prepared to lose that 10g if you have not practiced with options ...

To: Lone Star who wrote (32160)	9/3/1998 3:35:00 PM
From: Knighty Tin	Respond to of 132070

LS, I didn't see this earlier as it was misaddressed. It will be a long answer and I don't have time to write it today, but I'll post a long note tomorrow. MB

To: Lone Star who wrote (32160)	9/3/1998 4:03:00 PM
From: Skeeter Bug	Respond to of 132070

lone star, my suggestion is don't do it. the put game in a bull psychology market is tough. meeting the time frame is extra tough. i'd either follow a long term conservative option strategy or wait until this blows over. the bull sentiment is still out there. after all, most stocks are already 40-50% off their high. you came to this dance a little late. unless, of course, you feel lucky. in vegas you get all the free drinks and street lights for free ;-) jmho. btw, still think amat was a great buy at 450 like you told me when it was $50? it must be super duper now! ;-) hey, what is amat's 10 year annualized return after this 50-60% haircut from its highs? i think you said it was 30% when it was at $50+.

To: Lone Star who wrote (32160)	9/4/1998 12:39:00 PM
From: Knighty Tin	Respond to of 132070

LS, As you know, I recommend either 90/10 or discount/interest only for first moves into buying long options, either puts or calls. IMHO, you have to be able to reload or you are certain to lose over the long haul. We really don't know how many bulls are out there calling Terry Bradshaw for a high interest loan so they can buy undervalued stocks like Dell and Lucent. -g- First, some general crapola, FWIW. I like to buy puts on up days, calls on down days. On puts, I buy the strongest groups. Most short sellers/put buyers like to pile on the weaker groups, but, then, they are driven by TA and other false religions. <G> If you pick right, the stronger groups will become the weaker groups and you don't necessarily dump them for that reason if they are still overpriced. You can still make more money when the TA types start to buy. I got a private note the other day asking how I could call myself a contrarian and buy puts on the banks, which were down so much. Well, they sure weren't down when I started buying the puts. -g- And they are still overpriced. But starting a put program on banks at these levels would not be my cup or tea. After all, I am playing with a position that can only slightly reduce a huge profit after my good luck there. A new buyer doesn't have that luxury. And my new money is not going in to bank puts. Or airline or brokerage stocks or indices. I like to buy 2-6 months out, 1 to 2 strike prices out of the money. I have a huge prejudice. I will almost never buy puts on a stock in the teens or lower and even the best co. with a stock over $100 really tempts me. Since I do out of the moneys, I need more sliding room to make the big bucks. Right now, the market is oversold. Yes, it is still overpriced, but the suckers look like they want to rally back over 8000 sometime in the next few weeks. In fact, I think they want to erase the 500 point day, setting us up for the 1500 point day or a score of down 100 point days. So, I'd ease in here. I tend to buy individual names where I think I have an edge over street analysts and indices where I don't know one name from another. Sometimes I do both, buying puts on WLA and the DRG index. In general, I think there is more opportunity in individual names, though I can't see how anything could have outperformed the XAL on the downside. -g- This is where I am fishing: 1. Walmart. Though down a wee bit, still much closer to its all time high than it should be. PE ratio is enormous, growth is puny. The only negative is that people will mistake Xmas for growth. 2. Home Depot. A joke at 45 times eps. A beneficiary of Greenspan's Credit Reefer Madness, it can't last forever. 3. Best Buy. The eps are great. Don't know why. But the same reasoning as HD and the same caveat about Xmas as with WMT. 4. IBM, Gotta break par, then 80. Nothing real is happening here. I prefer puts with the dog over $130, but I would not want to be without a third. The service business is going to get creamed by Y2K. How many times can they reduce the tax rate to make a flat quarter and have the market like it? 4. Linear Tech. Dead meat and the market doesn't know it. Same for Xylinx, Maxim and the handful of other overpriced niche semis. 5. DRG. Yes this one is down a lot, but not relative to everything else. The multiples are nose bleed and everyone loves them. Very pricey puts, so buy far out of the money. 6. IIX. Down, but down from Pluto to Saturn. Still a long ways from solid Earth. 7. Worldcom. This is one of the few where I have no fundamentals to back my hunch. I just hate the co., hate the mgt., hate the concept, hate the mountain of debt. Hate monger, hate monger. <G> 8. Clear Channel. See #7 above. Shoot, radio stations and telephones are old, mature industries. These guys remind me of the conglomerates of the 1960s. All fluff. That should give you a shopping list. Stay tuned as others will be added in any rally. MB