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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (89825)	1/19/1999 12:16:00 AM
From: Ibexx	Respond to of 176387

LEAPS in general do not lose their time premium until 9-10 months prior to expiry. Many investors/traders would buy and hold then for leveraged price appreciation during the "flat" phase of the time decay curve. It can be quite lucrative, especially for stocks that have steady growth rates and relatively low volatility (e.g. WMT, ATI, IBM etc.) Ibexx

To: Chuzzlewit who wrote (89825)	1/19/1999 7:26:00 AM
From: Sig	Read Replies (3) \| Respond to of 176387

Chuzz: Experience has taught me never to argue with a cat(G) But I consider leaps a rather solid investment device. Some leaps I own are: Msft 2000 140 cost 7 now 30 Intc 2000 120 cost 12.9 now 33 Dell 2000 17.5 cost 7.3 now 63 Dell 2000 35 cost 9 now 47 Dell 2001 ? cost 17 now 42 ( I sold the Mrk's which drifted down to a loss) So Dell would have to drop $25/sh to lose money on any of these. These are three companies I have a great deal of confidence in. Dell in particular grew up in contention and cutthroat competition and yet rose to be No 1 in many categories. If the world markets drop, Dell has the experience to survive and prosper. Consider an investment of 500K and assume Dell doubles by Jan 2001 1. I could buy 500K of Dell stock a major part of a portfolio, and have it appreciate 100% by Jan 2001. And any profits I chose to use along the way would be taxed a short term rate. I would tend to monitor it daily and worry for the next several years. Or: 2. I could buy 200k of Leaps and have them appreciate by $500 k or perhaps much more if Dell more than doubled( and it probably w will). I would not have to sell any along the way and profits would be LT. Could go on vacation and forget those leaps for months at a time. The other 300K could then be for a what might be considered (by the owner) to be a more secure investment I do not worry about the price of Intc or Msft, its nice to have them go up, but they would have to drop 20 or 30 bucks for me to even consider getting out ahead or whatever. Dell would have to drop $25/sh for any of those leaps to run into negative territory. ( But I have others that would)Haha Meanwhile, I pay a lot of attention to the price of Dell stock and the call values, but not much to the leap values But close in calls are often a real cause for concern. Summary: Leaps in a solid company can be a more worry-free investment than owning the stock. I do not expect a company like Dell with a yearly sales/earnings growth running at around 60% for many years, to suddenly change course and grow at only 10% for the next two years which is about what it would take to give a zero % growth to the leaps. ( sorry about all the I's) Sig