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

To: Larry P. who wrote (33615)	10/8/1998 10:39:00 PM
From: Knighty Tin	Respond to of 132070

Larry, I always prefer lousy companies at high prices, but they are hard to find. In general, I would much rather have puts on the IIX Internet Index than on the DRG, doper index. I just think there is less substance on the net stocks and much more downside. That being said, I own puts on both the DRG and the IIX and have for some time. The DRG fell a lot, then rallied and is now falling again. I love double, triple and quadruple dips. Never sell short. I know, I do it now and then, but I'm wearing the Short-otine patch and have cut way back. The rule about not buying puts on great companies is nonsensical. It makes some sense in a bull market where nobody looks at valuation. But we are in a bear market and valuation rules. I have made some of my best profits on names like AMAT, Compaq and Motorola, all of which were considered wonderful companies when I bought the puts. And they really are wonderful companies. The question is, if a dividend discount model shows a return less than Treasuries because the price is so high, that sucker is a put candidate. BTW, you will never read about problems with the business while the stock prices are bloated. They tend to lose about a third of their value first, then you find out why. So, the easy money bought the puts at the top. In addition to the DRG, I think WLA is one of the most overpriced stocks in the world. This co. has always been second rate. Now, due to a couple of decent new products, they are considered to be on the prime list. I don't buy it and I sure don't buy their multiple. I think they had a nice sprint race, but can't make the mile and a half at Belmont. -g- MB