Thread: WMT
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Old 10-05-2005, 04:22 PM
buffett buffett is offline
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Join Date: Dec 2004
Location: Graham-and-Doddsville
Posts: 133
Default Re: WMT

There's no way you're going to get me to play devil's advocate on the issue of buying WMT right now. But there is one other thing to consider. If it's within both your Comfort Zone and your Circle of Competence, then you might want to take a look at the Jan08 calls. (If it's not in both, though, just forget about it.)
If you're right about making 50% on just the stock, the Jan08s will do far better. Here's two scenarios, one with the stock hitting 60 and one at 65 (each of these two prices was determined by the time-tested methodology known as SWAG):

Security / Price / End Value / Gain
Stock / 43.60 / 60 / 38%
Jan08 @40 / 9.10 / 20 / 120%
Jan08 @45 / 6.70 / 15 / 124%
Jan08 @50 / 4.40 / 10 / 127%

Security / Price / End Value / Gain
Stock / 43.60 / 65 / 49%
Jan08 @40 / 9.10 / 25 / 175%
Jan08 @45 / 6.70 / 20 / 199%
Jan08 @50 / 4.40 / 15 / 241%

-web
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