Ken Manuelian: ‘Well I sold all the Apple LEAPs. (A bird in the hand!) Between the profit from them and the U-PLAN [pre-paid tuition program], I have enough to pay my child’s education and all necessary expenses. Thank you for the suggestion. I am one of the people who have listened to you over the years and made 7 digits and retired at 55 (to Florida, where else?).’

Bob Fyfe: ‘In reference to holding your Apple 20 LEAPs for five more months to receive favorable tax treatment, you wrote in Friday’s column: So one thing you can do is sell an equal number of Apple 32.5 calls. I disagree with this strategy. I’m assuming that you would like to sell today to lock in your gain – except for that darn ordinary income tax burden. If that’s the case, what you want to do is set a floor for the LEAPs. Selling calls gives you income in exchange for accepting a ceiling. In order to lock in your gain, you need to BUY a PUT. This sets the floor and locks in your gain. Unfortunately, there is a cost associated with this that you may not want to pay. To address that issue, there is a technique called a zero-cost collar. Using this technique, an investor sells a CALL (as you did) and uses the proceeds to buy a PUT. This sets both a ceiling and a floor but allows you to wait out the five months for your tax savings. The result is as if you sold your LEAPs at today’s price but with favorable tax treatment. (You’ll still kick yourself if they go through the roof, but you’ll also be much happier if Apple drops below 20.) Here’s a website describing the technique.’

☞ That’s completely sensible if you want to lock in your profit here, as you say – no more, no less. I think for most people that probably is the better strategy. In my case, I was being a little greedy, willing to bet the stock will be close enough to the current price that, even if it slips a little, I will still come out ahead from the premium I was paid for writing the call. In my case, owning January 2006 Apple 20 LEAPs, I got $6.40 for selling an equal number of Apple $32.50 January 2006 calls, which – if the stock doesn’t fall – is like selling the stock for $38.90 if Apple stock is $32.50 or above in January of 2006 (namely, the $32.50 strike price plus the $6.40 premium). But I don’t disagree with you . . . it’s just a somewhat different bet I’m making, motivated by more than waiting out the long-term holding period.


A letter to the editor (slightly truncated):

I’m always surprised by the fact that people on the right seem to believe that because we want Bush out of the White House that it follows logically that we also wish for American failure abroad.

We are patriots without lapel pins; patriots who fear for the lives and futures of our children. Patriots who believe that this administration should have been saying, “Yeah, but…” all along. “Yeah, but what if that’s not enough troops to catch Bin-Laden?” “Yeah, but what if the Iraqis don’t greet us as liberators?” “Yeah, but how are we going to pay for it?” “Yeah, but what if we create more terrorists than we’re getting rid of?” “Yeah, but what about funding first responders?” “Yeah, but what about securing ports and nuclear facilities?” “Yeah, but what if North Korea needs money right now and sells nukes to terrorists?” “Yeah, but what about those Saudis?”

Instead of, “Yeah, but he tried to kill my dad.”

We already have an immense failure on our hands. Not one of the Bush administration’s stated goals has actually been accomplished. Now we are faced with the task of cleaning up the mess left by a proud C-student who ought to be asking himself, “Yeah, but what if God didn’t really want me to do this? . . . ”

Gene Weygandt


Robert Levy: ‘If I were to go to the movie a certain percentage of that money may find its way to Michael Moore’s hands. Now I ask myself do I really want to give money to a man who travels around Europe telling audiences how arrogant, violent, stupid, Americans are? And does Michael Moore have access to information that Time, Newsweek, NY Times, Wall Street Journal, ABC, NBC, CBS, Safire, Friedman, Will, Nightline, US News, etc., do not?’

☞ Think of it this way. Which is the greater risk – enriching Michael Moore by $1 because you bought a ticket to the film? Or electing the wrong president because you chose not to hear the other side of the story?

Worst case, you leave the theater confirmed in your belief that Moore is despicable. With so much at stake – everything from our standing in the world to the stem cell research that could save your loved one from year’s of suffering – isn’t that a small price to pay to confirm your belief that there’s nothing new or important in his film that might affect your view?

‘One thing that Buddhism teaches you is that every moment is an opportunity to change. And we will have a moment in November to make a big change.’ – Ron Reagan


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