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Strategies & Market Trends : The Round Table: A work by the squares of the SNDK thread. -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (19)	2/27/1999 6:30:00 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 194

I was never impressed by the Motley Fool, even though he graduated from the same prep school in DC as I did (though he is much, much younger). The same school whose graduates include President Bush's sons and the current Vice President. No guarantee of success! Anyway, the traditional value measures will work better in the long run. I would, however, mention, particularly to Ausdauer, that one might just as well make use of all the tools of investing, including options. I often use the sale of covered calls as a CONSERVATIVE strategy designed to lock in profits. For example, if you are worried about whether this market can go up much higher, and as a consequence, whether SanDisk can move up substantially from 28 in the next couple of months, you might consider selling covered calls with a striking price of 30 and expiration date of, say, April or May. You pick a little cash on the premium, and if the stock stays where it is or goes down, you let the option expire worthless and pocket the entire cash as profit. On the other hand, if the stock moves above 30, your shares will be "called" but you still make a profit unless the stock goes so high that the difference between the $30 striking price and the market price is greater than what you got for selling the calls. Unlike buying a call, the sale of covered calls is not a gamble but a conservative strategy. Art

To: Ausdauer who wrote (19)	2/27/1999 9:43:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 194

Ausdauer: I mentioned WFMI because to me, it is similar to what I thought SNDK was 3 months ago, and perhaps it might appeal to readers here. It is a company selling at a relatively low price which is dominant in a niche market. A growth-at-a-reasonable price bet. A company, perhaps like SNDK, that observers, consumers, investors, and employees can get some enthusiasm for. For me, I see a company (Whole Foods) growing revenues from .3 to 1.4b since '92, increasing ROE, low relative pe, and still having room to expand. (Please note: I'm not intending to tout WFMI; just that I like the price currently, I'm establishing a small position (within a diversified portfolio), and I thought this particular stock might be interesting to thread readers.) I use simple fundamental stuff for most investments: pe, price/sales, price/book, roe, dividend yield. Sometimes, I'll put a spin on how I look at those figures: dividend yield relative to S&P, or price to relative ROE, or some other manipulations. I'll use p/cash flow also --if I can easily calculate cash flow (-g-) One determinant every investor has to ask himself/herself is: what will I do if my stock rises or falls? Basically (IMO), one either could sell or hold - but I'm saying each person must consider the buy choice and his/her proclivity for it: one either averages up as the stock rises or averages down as the stock falls. I am one who - generally - averages down as a stock falls and sells as a stock rises. I would never sell covered calls against a stock I hold. That, to me, is ridiculous. The SI guru on options is (IMO) Michael Burke (ref. his thread). I think he calls that betting against yourself. Again, JMO, and I've been wrong many, many times before. Paul Senior