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Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC) -- Ignore unavailable to you. Want to Upgrade?

To: dwight vickers who wrote (119)	4/21/1999 2:59:00 PM
From: ahhaha	Read Replies (2) \| Respond to of 587

The argument you're making is similar to the yahoos speculating in Internet stocks. The proof that it works is that it works. You can realize that kind of return in a market whose "value" stocks rise 50% per annum indefinitely. The indefinite in the equation embeds in a hefty call premium even in out-of-the-money. In fact, you can sell straddle and increase your return to 70%. We are now in the first phase of a bear market, so you will be seeing those expectations substantially shrink. You have another problem. Holding the long side when the short side doesn't cover long side losses. As long as the long side advances slowly, things work out. Almost. We won't talk about all those little items that drag the theoretical return down. The only time when you can get away with what you're doing is in unique unsystematic environments. You're making 40% when if you just held the "value" stocks, you'd have made 50%. You aren't factoring in opportunity cost loss. If you're going to be involved with capital markets, you might as well engage the risk. You're doing it anyway, but you can't see that. You will.