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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Dr. David Gleitman who wrote (35450)	10/29/1998 12:39:00 AM
From: Roads End	Respond to of 97611

DDG...My pet name for the pig is Compost. If you can use the loss this year take it. Wouldn't surprise me to see a lot of tax loss sellers between now and the end of the year especially for those who receive capital gain pass throughs from their mutual funds. The result is continued pressure till the end of the year. :-( Steve

To: Dr. David Gleitman who wrote (35450)	10/29/1998 9:30:00 AM
From: Windseye	Read Replies (1) \| Respond to of 97611

David, I'm holding 4K at 35 3/16... since February. You're deeper in then I am, but the waters are ugly. If we are getting to the point that there is NO upside potential this quarter, in spite of CPQ meeting time in channel goals, absorbing DEC and Tandom, and threatened by many sellers taking capitol losses between now and year's end, then the contrarian view might be that now it will bounce up. Supposedly we small investors always sell at the bottom and buy at the top... Doug

To: Dr. David Gleitman who wrote (35450)	10/29/1998 9:36:00 AM
From: steve kammerer	Read Replies (2) \| Respond to of 97611

If you want a qualitative reason to unload CPQ: I just saw figures at one on the sights NightWriter published. Shows CPQ with a forward looking PE of 78. That was a shocker to me. I only have 200 shares. I would think that everything has to go perfectly for CPQ's price to move forward at this level. CPQ is now a large company with the concomitant overhead. Don't know how they can hold up vs extreme price reductions to come for Holiday season to compete with under $1,000 computers. If they follow price reductions, their profit margins should be even further eroded due to this overhead. Given all that I guess I will still stick with CPQ. By the way to let you know of my great expertise, I bought 350 shares of TBR at prices from $135 to $114 over the past year, and managed to ride it all the way down to yesterday's close at $69 1/2. Good luck, stevek

To: Dr. David Gleitman who wrote (35450)	10/29/1998 11:14:00 AM
From: Night Writer	Respond to of 97611

Dr. David, Your cost basis is higher then mine. I have acquired CPQ over a long period of time. I added 4,000 shares since last October. I have been waiting for the one year mark to sell Covered calls the Oct batch of $64 pre split CPQ. I just sold Oct 30 covered calls for $1 1/4 on them yesterday. If you are taking capital gains in other stocks, I would pursue a strategy to reduce the gains with some losses or at least make some money. My first strategy is to sell covered calls on the CPQ shares. You could sell the Nov 30 calls for around $1 1/4 this week. On 10,000 shares that would be 100 calls (each call is 100 shares) That would give you $10,250 in the bank. If the shares are called, most brokers do not charge commission on called shares. You save commission expense. If your shares are not called, sell Dec covered calls again. Maybe not at the same strike price. You are in the perfect emotional state to do this. You don't care if the stock is called. Therefore you can probably make a ton of money doing this. If the stock is not called, the money you put in you pocket. $10,250 less commission goes to reduce the cost base of the stock. You don't pay tax on it until you sell the stock. A good broker's statement will reflect this. The second strategy is to just sell to reduce capital gains tax. If you get $30, you have a loss of $60,000. Without explaining it, you can see the advantage of selling covered calls rather then and outright sale. If you sell CC six months in a row without being called, you might turn your dog into a winner. The draw back (there is always a down side!) is that CPQ starts climbing to $40 in Jan. (You may be selling options at $35 by then.) and the stock is called. Please don't yell at me if that happens. <G> However, I think CPQ will be under tax selling pressure for the balance of the year. At the same time, some people selling their dogs for a tax loss will be buying our dog for next year. If CPQ makes a $1.60 the PE at $30 is 18.75. Everyone is watching for the 4th qt this year to determine what the stock value should be next year. I sold Jan 27 1/2 strike price puts when we were at $25. I consider it money in the bank. I sold Jan 2000 $35 strike LEAP puts and I consider that money in the bank. I don't recommend doing these particular option plays if you don't understand options. I mention them to give you a feel for my investment point of view on CPQ. It is a solid long term investment in my mind. Let me know what you decide. NW