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

To: re3 who wrote (49245)	2/28/1999 12:20:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Howard, I really only know that out of the money options in a 90/10 plan works for me. In all honesty, I don't know that many other people who invest this way, at least they haven't been doing it for very long. In general, I don't think options of any sort work for most people. Those who sell options eventually get wiped out by a big move and those who buy tend to overbet. You have to be willing to take some lumps the way I invest, but, my experience has been that the payoff more than makes up for the bruises. I don't think that a random list of puts or calls will work, and stock picking is the real key to success. Yes, I have also been frustrated several times. It goes with the territory. I am frustrated right now with Jabil. The stock is down 10% from where I bought puts and my puts are still under water. If the stock were up, I'd buy another third. But here I am pounding my head on the table saying "I'm right on this dog, damn it," and the bid for the options keep saying, "think again, retardo!" <g> If you want to win more often than you lose and do so consistently, my strategy will not work. If you want to make a lot more money on the times you are right, it does work. You don't need many ISSI's that fall from $73 to 7, or Pressteks that drop from $200 to $50 or Citicorps that zip from $180 to $83 or Cienas that fall from $87 to $12 (I sold way too soon on Ciena puts and still did great) to make you a real happy camper, net, net. But you have to have faith in your stock picking ability and the money mgt. techniques that allow you to play another day. The market is so grotesquely overvalued that there is huge money to made buying puts. I still have puts on all the names you mentioned. Dell is a $27 stock, Compaq should sell in the low teens, Intel under $40, and MU for $6 based upon their business prospects. I am not saying they will get there right away and I am light in all those names right now as I expect some dead cat bounces next week. But on any decent rally, I plan to bell those cats again. Right now, the best candidates for puts are in the financial and drug sectors. I may add some next week, so stay tuned to this bat station. MB