PULP
Stuff that doesn't suck
Stuff that really sucks
Opinions on Stuff that Matters
How to Make Money in the Stock Market
(First posted to the web around November 29, 1998 or so)
I have noticed that everyone who writes articles/advice about the stock market in
magazines and websites usually SUCKS big time. As far as I can tell, there is only one
person that is really any good at it, and it is that woman financial guru(Abby Cohen) who
predicted that the stock market would hit 9300 before the end of the year, and she made
that prediction when the market was stumbling around 7600. Everyone said that she was
wacko, crazy, etc, since there was so much was going wrong in the market. She took a lot
of shit from a lot of people. Sure enough, less than six weeks later, her prediction was
correct. Conclusion? All those other folks are idiots.
So, since it seems everyone basically sucks at this, including:
I figure I could I make stock recommendations as well(or as bad) as they do. Since I feel I understand the "technology sector" better than any other sector, I will concentrate my stock picks in that area.
Stock Pick #1.
Microsoft. Rationale: They increase sales AND profits virtually every quarter on a
consistent basis. (unlike the internet stocks like Yahoo, Amazon, etc.) Bill Gates and his
cohorts rarely disappoints Wall Street. MSFT is sitting on about 19 billion in cash.
Everyone in the world seems to uses Microsoft Office. Microsoft is coming out with Office
2000 upgrade. The world is becoming PC Geeks, it seems like everyone wants the latest and
greatest, so the Office upgrade will be huge, and people will buy it like crack addicts
buy cocaine. Windows 98 sales are still strong. Windows NT sales are strong. I feel the
DOJ won’t do anything stupid like try to break up Microsoft into separate companies.
My prediction? Microsoft will either lose the DOJ case, and then they will appeal and it
will take 18+ months to sort it out, OR the DOJ will slap Microsoft on the wrist saying
something stupid like, "Oh, we made Microsoft change their licensing agreement so it
is not as restrictive/exclusive to ISPs". In either event, Wall Street will shrug
their shoulders and say, "So what, Microsoft is making a profit, and will continue to
increase profits in the foreseeable future, so we are buying more MSFT". Stock
immediately jumps up to $148, which gets it to an area where it can split again,
individual investors hop in after the split, and continue to drive the price up. NT 2000
gets closer to shipping, and investors get excited about it. Despite all the idiots saying
Java and Linux and blah blah blah are going to crush the kids from Redmond, there is one
thing to remember: You can go out today and buy a PC with a 266 Mhz CPU, 32 meg of RAM,
24x CD ROM, 56k modem, sound card, 4 meg video card, keyboard, mouse, AND Windows 98 for
$399. It will run virtually every piece of software ever created for the PC. Now, can you
say the same thing for a stripped down Java Terminal or a Linux machine? No. Java(as an
operating system alternative) and Linux will go the way of OS/2, Taligent, Pink, Newton
OS, into oblivion, along with their zealots saying their lame excuse, "We were better
than Windows, but customers just didn’t understand….". If you disagree with
me, put your money where your mouth is, and short the Microsoft stock and
see how much money you will lose.
More reasons: Wired Magazine’s cover story, "83 Reasons why Bill Gates’s Reign is Over". All these other magazines are asking the question, "Is it over for Microsoft?" Some people just don’t understand. One of Netscape’s downfalls was that they purposely pissed offed Microsoft by saying Windows was going to be taken over by Netscape’s browser, they called Microsoft the Death Star and Netscape was the rebels that were going to liberate the world, etc. All this did was make the kids at Redmond determined to kill off Netscape. My point? You can bet that the Kids from Redmond have read this article, and are pissed again. They probably post the cover of the Wired Magazine in their office. So they are going to go back, figure out what do to, and then come back with a plan that everyone is going to work 70-90 hours a week executing on, and satisfy their customers. In other words, lookout, you ain’t seen nothing yet……
Microsoft will probably be presenting its defense in the DOJ case in the later part of December. I think we can bet the defense will be strong, thus boosting the value of the company in the eyes of Wall Street. It is probably safe to assume that sales for Oct-Dec for Microsoft will be strong, due to continued sales of Win98, NTW, and Microsoft Office, as well as the big purchasing spree for software and computers this Christmas season.
So, my recommendation is to purchase the following:
MSFT Call Options for strike Price of $120, that expire on 1/15/99. Stock Symbol is MSQAD, currently trading at $12. (note, if you check on investor.msn.com for a quote, make sure you put a "." before the "MSQAD". You are essentially betting that the stock price will be $120+$12 = $132 by January 15th to break even. If it doesn’t get to $132 by 1/15/99, you lose money. Let's say that the stock only gets to $125, you lose something like ($132-125) = $7 per share, and $7 x 100 = $700 you lose. So, given that you have to purchase in lots of 100 shares, one contract will cost you $12 x 100 = $1200. Every dollar above $132 will be $100 in your pocket(since you are controlling 100 shares). If stock doesn't make it to at least $120, you lose everything.
Stock Pick #2.
Cisco. Rationale: Strong company, good management, still in expanding market. And making a
profit, unlike the majority of Internet companies. They will be fighting new battles in
the voice market again the Lucents and Alcatels of the world. They are doing well against
3COM, holding their own against Ascend. I would say Cisco is more of a long term play, as
opposed to making a quick killing on Microsoft in the short term. Meaning that according
to the Jubak dude on www.investor.msn.com,
there are big phone/data contract bids awarded in 3rd quarter of next year.
Therefore, my recommendation is to buy Cisco call options for strike price of $70(LYZAN),
expiring on 1/21/2000, for a price of $21.25. One contract will cost you $21.25 x 100 =
$2125. We are betting that Cisco will be $70+$21.25 = $91.25. Again, every dollar in stock
value above $91.25 will be $100 in your pocket. But if it doesn’t make it to $91.25
by 1/21/2000, you lose money. If stock never makes it to $70, you lose
everything.
So we are starting with a portfolio of $1200 + $2125 = $3325. (NOTE: if you want to do this, don’t forget that your broker will make you feel out forms that essentially say, "Yes, I know I am buying options, this is like rolling the dice, and I know what the hell I am doing.") It will take a day or two to process the paperwork. So you better get moving ASAP if you think the stock market will continue to rise in the short term.
Why we are buying options instead of just purchasing stock outright?
If we bought raw stock instead of options, for $1200 I could only buy about 9 shares of
Microsoft stock. If the stock goes up 20 to $148 by 1/15/99, you would make (9 x
$20)=$180. Big deal, that buys you about one rear Hoosier track tire. BUT, if you bought
$1200 worth of options instead, you control 100 shares of stock, so if stock goes to $148
by 1/15/98, you would make ((148 - ($120+$12)) x 100) = $1600. Or enough to buy 10 Hoosier
track tires. Remember, if the stock never makes it to $132 by 1/15/99, you are losing
bucks.
Stock Warning Caveat #1.
Someone told me 80% of people who buy options never get to cash in, and they lose their
entire investment. You have been warned. If it doesn’t work out, you can have some
comfort in that I will be losing money with you, as I am buying first thing Monday
morning. You can also tell your wife or your spouse if you lose money, that it is
Doug’s fault, and blame it on me for your stupidity in purchasing high risk options.
==========
PERFORMANCE UPDATE:
Okay, so putting my money where my mouth is, I went and placed my order for the stock on
Sunday night, November 29th. Unfortunately, Microsoft and Cisco both crashed on
Monday. So our portfolio went from $3325 to about $2600 in the matter of about 30
minutes on the morning November 30th. So you all probably think I am an idiot.
Tuesday, December 1, 1998
MSFT and Cisco rebound sharply. (I knew it would). Now our $3325
portfolio is now worth $3312. We are only down $13. And we got lots of time
for the MSFT options to rise some more(about 45 days), and 400 days for the Cisco options
to rise. We are in good shape. Better hop in now and follow my advice!
Monday, December 8, 1998
I hope you all followed my advice. It was free. And it was correct.
The MSQAD January $120 calls went up to $16.16. So if you followed my advice,
you are up $400 bucks on a $1200 investment. I am losing on the Cisco options,
but only $25. So far, we are up $375 in a week. Better hurry up and jump in
and follow my advice, or next week when you look at this site you will be kicking yourself
when MSFT hits $139, and the MSQAD options are up to $21.
Sunday Night, December 20, 1998
Okay, so now MSQAD January 1999 $120 Calls are now valued at $19. The Cisco Jan 2000
$70. Calls are now valued at $30. So if you would have taken my
investment advice, you would now have $4900 on a $3325 investment, and it has only been
three weeks! And you invested in companies that are making money! True,
you would have made a lot more money if you would have bought Amazon, but don't
forget.....Netscape was once a $171 stock, and now it is hovering at $40......cause they
didn't make any money(like the Internet stocks). Best of all, you didn't even have
to PAY for my advice on how to get a 50% return on your investment in three weeks....just
think if you would have bought $100,000 worth of options based on my advice, you would now
be up $50,000.......
Monday, December 21, 1999
Okay, due to NASDAQ rocketing upwards today, our $3325 investment is now valued at $5537.
Hey, up about $2200 bucks using "The System".
Okay, so now we gotta make a decision: Should we sell the MSQAD January 1999
$120 Calls now at a profit, take our money, and figure out our next bet before the NASDAQ
caves in and everyone sells for a profit??? Well, my take on it is that if we
sell now, we have to pay taxes on our winnings this tax year. My guess is that no one else
is going to sell now and be forced to pay Uncle Sam and the salaries of those pathetic
blathering idiots on Capital Hill. Let's wait until the first of the year, and
let the bucks ride on. Let's see if we can hit $148 and end up with two full sets of
Hoosiers for the new year!
note: Yeah, I know. 14 days ago if we would have bought the Amazon January
$220 calls for $21($2100 investment), today that $2100 would be worth $10,100! But
hey, I am trying to be fiscally responsible, and make sure if you follow my advice you
don't take a chance at losing your entire investment, especially since I am keeping a
running log of my advice on this page! How was I to know that Amazon would go up
$125 in FOURTEEN DAYS? I am good, but I ain't Kreskin!
:-)
Tuesday, January 5th, 1999
Ha! Abby who? She ain't nothing. When I first put this page up,
somewhere above I posted MSFT would hit $148. Today, MSFT peaked at $148, but closed
around $146.50. Okay, so let's do a tally of where we are at with our investments per
"The System".
MSFT Call Jan 99 $120 options are trading at $27. We bought them for $12. For a
return of around 116% in about 36 days!
CSCO Call Jan 2000 $70 options are trading at $34.65. We bought them for $21.25.
For a return of 61% in about 36 days!
So now, our portfolio looks like:
THEN NOW
MSFT .MSQAD Call Jan 99 $120 = $1200
$2700
CSCO .LYZAN Call Jan 2000 $70 = $2125
$3465
Total = $3325 $6165
So, our profit is now about $2800 on a $3325 investment. So if you woulda bought 10
contracts of each per my suggestion, you would be up $28,000. Or if you would bought
a hundred contracts of each, you would be up about $280,000. We have 10 more days
until the MSFT calls expire. So, since the DOJ is winding down their witnesses,
hopefully we will get MSFT to present part of their case before the Judge and the media
prior to the January 15th. And you can bet that the Microsoft guys are going to come
out swinging and looking for blood! Which could potentially mean.....investor
day trading frenzy.....which should boost us up some more. Anyways, those of your
who followed my suggestions, you now have enough money to buy about four sets of Hoosier
tires for the upcoming year.
Anyways, enough gloating.....let's get ready for our next pick. We have to do
something with the cash we get when we cash out prior to the 15th. Right now, I am
leaning towards buying some stock/options in Worldcom. Smith Barney said they expect
the stock to appreciate 45% over the next year.....so maybe that would be a good pick.
Or, should we just do what smart people have been doing for years.....which is
reinvested right back into MSFT, and let Bill Gates manage your money........
Friday, January 8th, 1999
Shit. My web page crashed, so I lost everything modified from January 5th. Let
me restate here what I thought I said earlier today. Okay, back in October we had
"panic" selling, and the market crashed. Today, we are having
"panic" buying, where people are trying to buy anything in sight. Our
portfolio now looks like:
THEN NOW
MSFT .MSQAD Call Jan 99 $120 = $1200
$2950
CSCO .LYZAN Call Jan 2000 $70 = $2125
$4375
Total = $3325 $7325!
PROFIT = $4000
Okay, so our MSQAD options expire next Friday. Microsoft starts presenting
its side of the case next week, and you can bet they are going to come out swinging like
Tyson going for a 90 second knockout. Let's hold onto the MSQAD a little longer.
WARNING: Abby Cohen, mentioned earlier on this page, said that she is reducing her
holdings in stock slightly, as the market is kick ass. Also, other people are saying
that there is a huge amount of people buying "call" options like the ones above.
Meaning that there is too much optimism in the market. So we could have a
correction coming soon.
Also, don't remind me about Amazon. If I would have listened to Tony-the-wife's-sister's-fiancee, we would have bought one contract for Amazon $220 calls for something like $2000 on December 7th.. I made the stupid mistake of saying, "okay, if it goes down tomorrow, we'll buy. It never went down. So I think that $2000 investment could have been worth about $24,000 right now........but how the heck does a company that has no storefront, does not make or develop a product, loses money every quarter, but still goes up an equivalent of $260 in 31 days? I can't figure that one out.....
Sunday, January 10th, 1999
Let's make some predictions now. Amazon is now worth 25 billion dollars. Over
the last 3 years, they have not turned a profit. They have increased sales every
quarter. They have also lost more money every quarter. For 11 quarters.
We don't have results from Q4 1998 yet, but they have said that they will lose money
again. Okay, so here is my prediction. Amazon is trading at $160 right
now. It is going to take a dive. I predict it will be at $80 in three
weeks. It's going for a dive. We got people playing the pyramid game.
Meaning, if I buy in now, more people will also buy in, and I will get out before it goes
down, since so many people are making money on it. Kinda like a pyramid game works
until people stop buying in. Except, this time it will be ugly. Because once
people who have bought the stock realize it ain't going up anymore, there will be mass
panic, and everyone will start selling at the same time. Which means Yahoo will also
come tumbling down. Hopefully it won't bring down our MSFT and Cisco options.
Okay, so now the question is, will I put my money where my mouth is?? Yes......but
I have to check with a couple of people before I do this, because if Amazon goes up
another $40, it will wipe out our profits. More tomorrow.....on which PUT option on
Amazon we are going to do.
Also, I actually found a financial book that made sense. It is The Motley Fool's "You Have More Than You Think", by David and Tom Gardner. I have about three other books, and they are shit, I never finished them. But this one actually makes good sense. HIGHLY RECOMMENDED.
Thursday, January 14th, 1999, 1:20 a.m.
Okay, I have been kinda busy, and didn't get a chance to follow up and put my money where
my mouth was regarding saying Amazon crashing. Sunday Amazon was at $160.
Monday went to $185. Yesterday, dipped as low as $125 but came back up to
$148. Seems like we could made some money on that one.....damn. Anyways, we
took an ass-whupping the past couple of days on our options. We should have bailed
out on Sunday night. Now we are at:
THEN NOW
MSFT .MSQAD Call Jan 99 $120 = $1200
$2350
CSCO .LYZAN Call Jan 2000 $70 = $2125
$3537
Total = $3325 $5887!
PROFIT = $2562. Still not
bad...but we lost $1500 since Sunday.
Anyways, let's ride this one out, and see what happens over the next couple of
days.....hopefully we can get that other $1500 back. If we lose all our
profits....well...at least it was a good ride!! Also, it looks like the Nikkei index
is up 335 points this morning, so perhaps we will get our additional profits back!
But the end is near for Amazon.....they are going down big time. You heard it here!
Monday, January 18th, 1999, 10:00 p.m.
Okay, looks like we got a big spike late on Friday. Unfortunately, I sold at 10:00
a.m. as I had to get a haircut and get the car ready to do some testing at Holtville
Racetrack(Airport?). So I sold at about $25 the MSFT $120 calls that expired at the
end of Friday. Profit was about $1300 bucks on a $1200 investment, not bad for seven
weeks of work. But if I woulda waited another couple of hours on Friday, the profit
would have been $1800 bucks. Oh well.....anyways, looks like I got my tire money for
the next few events.
So, what should we reinvest in??? I say let's use the Bank of Bill strategy, and let's buy one of the Microsoft April $145 call options that expire on 4/16/99. They are selling for about $15.50, symbol is .msqdi. So one contract will cost ya $1550, and let's see if we can double it again. We need Microsoft to get to $160.50 to make a profit, or about 7% rise in where it is at now. Now I know that seems risky, but Office 2000 is getting ready to ship in the next month or two, and since Office is one of the biggest money generating products at Microsoft, it might give a boost to investors and make them buy more. So what if Windows 2000 is a little late, Microsoft is diversified in so many products that a slippage won't hurt the stock too much(since people will still continue to buy and use NT 4.0 and Windows 98, manufacturers will still ship both pre-installed, etc).
I was tempted to buy a put option on Amazon, as I still think they are getting ready for a dive. Let's wait a day to bet on that. Let's let our Cisco options ride, they are now going for $41 bucks, and we only paid $21.25 for them. Perhaps we can use that for tire money starting in April or so.
Wednesday, January 20th, 1999 2:30 p.m.
That worked out pretty good. I put my order in Etrade to buy at market the .msqdi
late Monday night, and by the time the market opened, it went up to $17.25 on Tuesday.
Since Microsoft had another HUGE quarter, the stocked jumped up $13 in two days, so
now our .msqdi options are trading at $23.37, so we made about $600 in two days on a $1700
investment. See, investing is easy...........
Amazon got WHACKED again, like I predicted it would. Unfortunately, I didn't put my
money where my mouth is, so we didn't capitalize on that prediction. Okay, so let's
let the Microsoft and the Cisco options ride for now........and maybe we can end up with
our tire budget for the entire year.....
Tuesday, January 26th, 1999 1:30 p.m.
Okay, starting today, due to the accuracy of the stock picks on this page, this
part of the website now becomes a "paid for" subscription based service.
You got a broker that is charging you a 1% "management fee" to manage your
portfolio? Okay, I will charge you $20 bucks total for a six month membership.
So if you have a $100,000 portfolio with your stocks + 401k, instead of paying
someone $1,000 to "manage it", just send me $20 bucks and let's rock and roll
and make some cash. Did your "broker" pick you a stock that went up 81% in
8 days like I did? I think not. (Just kidding about the $20 surcharge.....at
least for now...)
Okay, Microsoft announced yet another stock split, went up about $9.65 or so today and $6
or so yesterday, so the .msqdi April 1999 $145 options are now selling for an incredible
$31.25. Since we bought them for $17.25 eight days ago, we are now up $1400 on our
$1725 investment. The Tire Rack will be happy about this! The other long
term Cisco options we bought in December are selling for $41.25, so we are up about $2000
on those. Combined with the $1300 we made when we sold last week, I think we are up
about $5700. Or, to put it in proper perspective, we are up almost 9 full SETs(36
tires) of Hoosier race tires. At least the wife should not bitch to me about all the
money I am spending on tires, because, hey, it like they were free tires!
Take a look at the Motely Fool.com website. Under their rulemaker category,
they did an analysis of Microsoft.(note, if you click on the URL, and you don't get the
Microsoft article, dig around, it is archived there somewhere under "rulemaker"
section.
http://www.fool.com/portfolios/RuleMaker/RuleMaker.htm
Anyways, their analysis is the following from www.fool.com
(highly recommended, they don't suck)
Net Profit Margin (how much after tax earnings you make on your sales)
Microsoft 40%
Yahoo! 33%
Gannett 19%
Oracle 14%
AT&T 9%
Disney 8%
IBM
8%
AOL
6%
CBS - 1%
Capital Structure LT- Cash/Debt
Cash Debt Ratio
Microsoft $19.2 billion $0 ---
Yahoo! $1.4 billion $0 ---
Oracle $1.9 billion $0.3 billion 6x
AOL $1.3 billion $0.4 billion 3x
AT&T $4.1 billion $6.1 billion in debt
IBM $5.8 billion $15.2 billion in debt
Gannett $0.1 billion $1.3 billion in debt
CBS $0.1 billion $4.8 billion in pain
Disney $0.1 billion $9.6 billion in pain
Market Capitalization
Microsoft $405 billion
IBM $167 billion
AT&T $160 billion
Disney $74 billion
AOL $66 billion
Oracle $49 billion
Yahoo! $31 billion
CBS $25 billion
Gannett $18 billion
Final Tally Net Cash- Market
Margin to-Debt Cap
Microsoft 40% Dream $405 bil. IBM 8% In debt $167 bil. AT&T 9% 1x $160 bil. Disney 8% In pain $74 bil. AOL 6% 3x $66 bil. Oracle 14% 6x $49 bil. Yahoo! 33% Dream $31 bil. CBS -1% In pain $25 bil. Gannett 19% In debt $18 bil.
Conclusion?? Who is going to dominate and make the "rules" for their
market and technology over the next five years??
My suggestion is to bet the farm and the house on the Kids from Redmond, because the
Redmond steamroller is moving fast, and some competitors are going to get flattened.
(I would bet my farm or house and put my money where my mouth is but........I don't
own a farm or a house..) As soon as the DOJ loses its case against Microsoft, look out
folks.......it's a Microsoft World, and Uncle Bill is going to rule! You might as
well hop on the bandwagon now and enjoy the ride, and start buying Microsoft stock now.
Cause you know it is going to split again soon.....my guess is in another 12-16
months.....
Back to our portfolio. I don't anticipate selling the Microsoft options until April,
as I want to ride the momentum. Same with the Cisco Jan 2000, let's hold on to those
also, and see how much more we can make in this techno-feeding frenzy!
February 9, 1999.
Uh oh. Looks like everyone is in mass panic selling mode. I joined them
earlier today, and sold the MSQDI April 145 options for $24.50. Etrade was sucking
big time, I had multiple sell orders in for the 145 calls, and each order took at least
10+ minutes to process. I was getting pissed, as I thought the market was crashing
and taking Microsoft down with it, but Microsoft was actually holding its own until the
last hour of trading, so since I wasn't able to get my order in a timely manner, I
actually picked up about 50 cents in the price. But still, that really sucks that I
couldn't get my order in, it gives me no confidence in internet trading. What if the
entire market went down 20%, and you couldn't get your stupid sell order in?
That would really suck. So we only made about 40% profit on the options we bought 3
weeks ago. But if we would have sold last week, we would have been up 80%.
Damn.
Okay, now time to re-evaluate the Cisco $70 calls that expire in January 2000. We
are up 75% on those. But we were up over 100% last week. Since we are in panic
selling mode, I say let's see how market is in the morning. If it spikes in the
morning, let's hold. If it stays even or goes down, let's sell, get the cash, and
wait until the panic selling stops, then let's buy back in.
March 27, 1999.
Okay, it has been a while since I put anything here. I am been real busy lately, and
haven't had a chance to update the page.
Anyways, I ended up selling the Cisco $70 calls back on February 10th or so. I
shoulda held on to those, because I sold them when Cisco was hovering around $96, and now
Cisco is back up to $105. DAMN! I shouldn't have panicked. In hindsight,
I should have held on to those MSFT options that expired in April that I sold Feb 9th,
as those are selling for $34 now. DAMN AGAIN! I lost 10 bucks per share
per contract, so I could of squeezed out another $2,000 in profits had I not panicked.
Okay, so here is my new plan. Microsoft stock is gonna crash. Yes, you
heard it from me. Either Tuesday or Wednesday, the stock is gonna crash because:
1. The stock shot up last week because of news that Microsoft and the DOJ are having
settlement talks on Tuesday.
2. Microsoft said that the ability to add new features and functions to Windows is
"Not Negotiable".
3. DOJ thinks it has Microsoft by the balls because of courtroom theatrics(very good
theatrics, I must conceed) by the DOJ lawyer dude.
4. DOJ doesn't want to appear to give Microsoft a slap on the wrist, as they will
look like wusses. (they are, and stupid ones at that)
5. The nineteen State Attorney Generals participating in the lawsuit are clueless,
and also think they have Microsoft by the balls.
6. Microsoft will offer to modify ISP contracts, and maybe loosenup startup screen
of Windows when you boot up. But the DOJ/Attorney Generals will say it is not
enough(after all, The Attorney Generals are elected officials, and once their constituents
realize how much fffing money they spent on pursuing a case that has no real merits to the
ordinary consumer, they will vote their ass right out of office next election), as they
need to look like they brought justice to Microsoft.
So, I think I am going to do the following:
1. Get some cash ready.
2. Wait for stock to crash a bit.
3. Buy back in when you think it has hit the low point. (probably sometimes
Wednesday or Thursday of this week).
4. Ride the Microsoft gravy train for the next couple of months. Office
2000 is getting ready to release, and Windows 2000 is getting ready to go to another beta.
Both will be good news in the long run.
Microsoft will lose this case to Judge Jackson and the DOJ. But they will appeal.
Then a year later, the appeals court, the judges on the appeal court(being smarter
than Judge Jackson and the DOJ and the Attorney Generals) will scratch their head and say,
"Uuuuuuhhhh.......why is bad to give away stuff for free", and MS will win.
So which options are we going to buy? I ain't sure yet, as we don't know how
much the stock is going to go down(if it goes down at all). But I will bet it goes
down to 165 or so by Wednesday.
But then again, I could be COMPLETELY wrong about all of this......after all, I did
sell out on February 9th.
UPDATE: Sunday Morning, March 28th.
Okay, I just talked to someone else. She mentioned that www.stockwinners.com has MSFT as the pick of the
week, since the reflected stock split will be first on the market tomorrow, thus smaller
investors could be scooping up the stock in the morning. Now I am totally confused.
Maybe it will blip up on Monday, and then drop down on Tuesday/Wednesday. All
I know is that there is a "play" in here to make some cash somehow, ya just
gotta figure out how to outsmart everyone else that is in on the "play".
UPDATE: Tuesday afternoon, April 27th.
Well, since my last update, Microsoft didn't crash as predicted, it just kept going up.
Bummer, because I wasn't in the game, since I jettisoned profits earlier, we didn't
get a chance to get into the latest run up. Now, I think it is time to hop back in.
I bought into AOL calls yesterday (yes, I know, very risky. I was say extremely high
risk) I bought the AOOGD, the July 1999 $120 calls. I paid $22 for them yesterday,
and they are at $27 today. However, yesterday I bought when AOL was hovering
around
$120, in the last 30 minutes of trading yesterday the stock when down to $114. Shit.
I could scored a lower price, probably could have picked them up for $18 if I
woulda waited. Anyways, we are up about 20% in day, which I won't argue with.
We could take out 20% profits today, but let's see if we can double or triple our money
before time runs out on July 16, 1999.
Today, I bought into Microsoft calls, the October 1999 $75 calls. There were going for $14.5 at time, and closed at $15.5. I bought them because I figured that Microsoft would report good earnings, and it will boost up the stock price. Also, Microsoft didn't claim earnings for Office last quarter, since they were still shipping the old version of Office, so they will claim them next quarter. So they will probably pickup another $200-400 milllion in revenue for the next quarter. In aftermarket trading, MSFT didn't up as much as I thought, but at least we are back in the game.
Update: Sunday, August 15th.
Yeah, I know, I have been delinquent in updating this page, but I have had a bunch of car
stuff going on, and to add to that, I have been pissed with my picks. The AOL calls
that I suggested to buy did good for about a week, we were up 100%. But, I got
greedy, and was aiming for 200%. Unfortunately, AOL tanked big time, and I lost
everything put into that. Bummer, our first real loss of the year. We are down
a little on the October MSFT calls. We were up 100% when the stock got to 99 a
couple of weeks ago, but now we are down about 15% on that. Oh well........
Anyways, if I was doing any investing right now, I would buy some Cisco and MSFT long
term calls or the stock outright, and just sit on it.
More later....