CMGi is a company that invests in internet companies and works on
building them up and creating synergies between them.

They currently have majority holdings in something like 60 companies,
including Altavista which they bought last year for $2.7 billion
and will IPO next month for something like 3-10 times that. (guessing)

At one point last year, CMGI was the best-performing stock in
the history of the NASDAQ market, increasing 60,000%+ since its
inception in 1994(?). Chart at:

   http://quote.yahoo.com/q?s=CMGI&d=my

Unfortunately, I didn't get into it until March 12 of last year,
when I bought some at $85.50. I bought some more on Dec 20 1999
at $110.50, and then doubled up my holdings on Jan 27 2000 at $112.
(all prices split-adjusted.)

So now it's a huge portion of my portfolio: a third of my overall
holdings, almost 3 times my next largest holding, 4.66 times my
average holding, and 6.26 times the size of my mean holding.

But I still feel like buying even more, since it seems like such
a good buy at its current price ($108, off a recent high of $163
on Jan 3). I expect it to double within 6 months and triple or
more within a year.

If there's a major market meltdown, it'll go down along with
everything else, but I don't see it doing much worse than the
Nasdaq as a whole.

For the reasons why I think it's a good company, see stuff linked from:

   http://boards.fool.com/Messages.asp?id=1080158000000000&sort=rec
and
   http://impressive.net/archives/fogo/search?subject=cmgi

especially:

   http://boards.fool.com/Message.asp?id=1080158007012000
   http://boards.fool.com/Message.asp?id=1080158006321001
   http://boards.fool.com/Message.asp?id=1080158005900000

(hmm... I've seen better articles than those, but those are the
only ones I made a note of, darn.)

I've never been this confident about a stock before, except maybe
when Apple was trading around $15 in Dec 1997. (before I started
investing -- doh!)

But I like most of my other holdings too much to sell them, and
don't really like putting so much of my money into a single
company anyway, so I'd like to find a way to benefit from CMGI's
impending rise without risking a lot more money.

So from what I've heard, it sounds like this is a great chance
for me to get into options trading (which from what I understand,
basically lets you make bets about stock prices that pay off
better than simple investments if you're right.)

Except I don't know much about options yet so I need to do some
reading first. Does anyone have site/book recommendations?
(or personal experience?)

Related to this is an interesting/entertaining thread I saw the
other day, the better bits included below:

http://boards.fool.com/Message.asp?id=1080158007259000

>    Author: mgmitch
>    Subject: mgmitch gonna do it again??
>    Date: 2/12/00 9:22 AM  
>    
>                                                        Recommendations: 2
>    
>      Well many of you remember taking all of my money and buying XLA a
>      few months ago. I did well and have turned my portfolio from about
>      7K to 50K as a 19 year old. Now I am ready to take another big leap
>      and was gonna get some opinions of you smart folks on the CMGI
>      board. What I am thinking about is putting the entire 50K into CMGI
>      JAN01 175 options. With AV ipo and all the other companies CMGI is
>      incubating we are a screaming value at these levels. Heck after the
>      AV ipo we will just be barely trading over our public asset value.
>      I believe we will IPO 1 or 2 other CMGI majority owned companies
>      also this year, plus Icast nearly ready for release. I figure I can
>      get between 28 and 30 contracts at these prices. I have no doubt in
>      my mind CMGI will be a 250 to 300 dollar company by years end
>      making my options at least worth 4-5 times todays value, but I also
>      think we could be worth 500 by expiration making me nearly a
>      millionaire ath the age of 20. On this one I figure if for some
>      reason CMGI doesn't hit my strike price I will say heck, I only had
>      7 grand in August so why does it matter if I lost it all, I can
>      rebuild in no time.

Yikes!

This actually sounds exactly like what I want to do, except for
the putting-all-your-money-in-one-investment part.

http://boards.fool.com/Message.asp?id=1080158007259006

>    Author: RightNow
>    Subject: Re: mgmitch gonna do it again??
>    Date: 2/12/00 5:54 PM
>    
>                                                       Recommendations: 22
>    
>      mgmitch, I admire your ambition and kamikaze style. I know where
>      you're coming from.
>      
>      I pulled a similar stunt with CMGI options and increased my total
>      net worth by more than 1000% between November and January (CMGI's
>      latest run). While it was a GREAT feeling to have come out a winner
>      in a game of russian roulette with my finances, I would have been
>      psychologically devastated if things hadn't worked out the way they
>      did. Therefore, I will never attempt to do anything like that again
>      with my money (I'm glad it worked out...but I'm also glad the
>      experience is now only a memory).
>      
>      From now on, instead of playing high-risk options and betting the
>      farm on a single security, I am betting only 80% of the farm on a
>      basket of high-octane companies that could produce phenomenal
>      returns -- but never again will I put more than 10% of my portfolio
>      in options and even then I will allocate no less than 8.5% to
>      fairly safe in-the-money LEAPS with 2 years until expiration.
>      
>      I understand your current mindset and think there is a good chance
>      your proposed options play might produce the desired outcome.
>      However, it is important to keep in mind that there is a very real
>      chance that you will lose it all -- and possibly in an unexpected
>      market downturn that could occur after you are up $500K or so in a
>      very short period of time. If that were to happen, the
>      psychological pain could be almost unbearable, because the pain of
>      making a small fortune and then losing it is much worse than never
>      having made it at all.
>      
>      What you are thinking about doing is much more than an options
>      play. It is an all-consuming endeavor that can and will play games
>      with your head. The woozy feeling of making $100,000s per week or
>      day during one of CMGI's incredible runups is unexplainable to one
>      hasn't felt it before -- but believe me, the distinction between
>      fantasy & reality and skill & luck can become so blurred that
>      rational decision-making is nearly impossible. And that's where the
>      danger comes in. Anyone who does what you are proposing must be
>      prepared for many sleepless nights and long days when concentrating
>      on work/school is all but impossible (because of euphoria and/or
>      fear).
>      
>      Since your proposed LEAPS play will last many months, must think
>      about all that can/will happen between the day you pull the trigger
>      (buy to open) and the day you ultimately know whether or not you've
>      hit the target (sell to close). It will be like running a marathon
>      without knowing the terrain of the course or the weather conditions
>      ahead of time.
>      
>      Just .02 from someone who has done it and was lucky enough to have
>      come out a winner.
>      
>      Best of luck,
>      RightNow

http://boards.fool.com/Message.asp?id=1080158007259008

>    Author: mgmitch
>    Subject: Re: mgmitch gonna do it again??
>    Date: 2/12/00 7:06 PM
>    
>                                                                          
>      That is definately a good post RightNow and I can understand where
>      you are coming from, but you must remember that I am 19 and have
>      plenty of time to make up for this mistake if it turns out to be a
>      mistake. Heck I only had 10K in December and now I have 50K so it
>      wouldn't be a real downer to lose the 50K and be put at 0 in
>      January 2001. I don't need the money anytime soon and I don't know
>      hardly anyone else my age with more than 2 or 3K in there pockets
>      right now. I feel I will have a great job when I get out of school
>      at Georgia Tech, but thats 3-4 years away and I am co-oping with a
>      great company which will allow me to rebuild that 10K in 4-5 months
>      no problem just from working. I assume I would sell off my initial
>      investment when it has accumalated to a high enough amount so that
>      I can preserve this initial investment. I actually have some
>      engineers I work with who have yet to start investing and they are
>      30-40 years old and amazed by the wealth I have started to created,
>      but if I lost this money, I would merely be a normal 19 year old
>      instead of one who has done well in the markets. CMGI may not get
>      in the money on my options, but I would be pretty surprised if it
>      is not very very close. CMGI's public assets will be worth well
>      more than the price CMGI is currently valued at by years end plus
>      CMGI will have 100 other companies in its stable. This IMO is just
>      the begining of many years of great stock appretiaion. 3-400%
>      appreciation in CMGI's stock is highly possible this year and that
>      would make my options a great play. I am in that mindset where I
>      will have 1 more final all or nothing to send me to riches. The
>      risk is there but the reward is amazing. XLA gave me my base to
>      work off of. Now I will count on CMGI to build my wealth. If it
>      doesn't work out, it doesn't work out, but I see this play less
>      risky than my XLA play as it was relatively unknown at the time.
>      CMGI is the future, it is a GE of the Net. I will do some thinking
>      on this during the next few days and let you know how it turns out
>      but right now I am leaning towards the 100% play.

http://boards.fool.com/Message.asp?id=1080158007259009

>    Author: RightNow
>    Subject: Re: mgmitch gonna do it again??
>    Date: 2/12/00 7:51 PM
>    
>                                                        Recommendations: 2
>    
>      > mgmitch: I can understand where you are coming from, but you must
>      > remember that I am 19 and have plenty of time to make up for this
>      > mistake if it turns out to be a mistake.
>      
>      I agree 100%, and like I said, I admire your all-or-nothing
>      go-for-it style. That's my inherent style too!
>      
>      > I am in that mindset where I will have 1 more final all or nothing
>      > to send me to riches. The risk is there but the reward is amazing.
>      
>      Believe me, I know *exactly* what you're saying and where you're
>      coming from.
>      
>      > If it doesn't work out, it doesn't work out, but I see this play
>      > less risky than my XLA play as it was relatively unknown at the
>      > time. CMGI is the future, it is a GE of the Net. I will do some
>      > thinking on this during the next few days and let you know how it
>      > turns out but right now I am leaning towards the 100% play.
>      
>      You seem to have an excellent perspective on the logistical aspects
>      of the situation, and there is noone who would be more supportive
>      if you decide to go with the 100% play.
>      
>      The point of my post was to encourage you to think about what you
>      might go through during the process of letting your LEAPS play run
>      its course. While you may come out a winner financially, the
>      psychological stress that will mount over the coming months could
>      take an unexpected toll on your work/academic/social life -- for
>      reasons that a person cannot understand until they go through the
>      process of watching their net worth fluctuate wildly as the
>      impending options expiration date looms ever nearer.
>      
>      The process of attaining wealth is one that requires incremental
>      psychological adjustments, and when it happens in a few short
>      months, one can experience unprecedented stresses that cannot be
>      put into words.
>      
>      I'm not trying to dissuade you from the all-or-nothing play;
>      rather, I'm pointing out some of the consequential non-financial
>      side-effects that you will probably encounter between the time you
>      open your position and the time you close it out (win or lose).

http://boards.fool.com/Message.asp?id=1080158007259029

>    Author: erkaye
>    Subject: Re: mgmitch gonna do it again??
>    Date: 2/13/00 2:09 PM
>    
>                                                                          
>      Mitch, I know you are getting some good comments from some of the
>      heavy hitters on this board, and I am not one of them, but I have
>      been thinking about your situation and its possibilities ever since
>      I read your post. I fact, it reminded me of your original post
>      about buying the XLA. At the time I thought, "Good luck, your going
>      to need it." Well, you made more than I did these last 4 months, so
>      congratulations! On a persentage basis you are probably at the top
>      1/100th of 1% of all traders. In fact I am torn between urging
>      caution and taking the same trade myself.
>      
>      I do want to add a couple of things about this trade. First of all,
>      you are making this decision yourself. It is always that way when
>      your trade, no matter what. Second of all, you will care about the
>      money if you lose it. This as human nature, and people are not that
>      different. Also this is an expensive way to find it out. I urge you
>      to take a slightly longer time horizon, and make a few trades to
>      see how it goes. CMGI may still be in a short term down trend, as
>      it has been since the beginning of the year. Buy a few calls and
>      see what happens to them. To me it is definitely not the same as
>      stock trading. Buy points matter tremendously, and exit windows can
>      close in seconds. The spread is 10%, and every day your time value
>      is shrinking. You need to be flexible about your holding periods,
>      etc.
>      
>      There are a ton of things I want to say, but just look at the trade
>      logically. You are trying to multiply your money by 20x. You will
>      about break even at a $192 closing price on the underlying CMGI.
>      That is 70% from here. To hit your goal requires over 300%, that is
>      over $450/share. It seems likely you can break even, and possibly
>      make some money, but making $1mm looks like a stretch. The more
>      realistic trade would be the other side of your trade
>      
>      The reason I am saying all this is that I am not convinced that
>      CMGI is the best vehicle for what you want to accomplish. (I am
>      long the stock). You need to find a stock like XLA in November, or
>      last year's QCOM that really has a 1000% upside potential in the
>      stock. Then the options could have real punch. I am not sure that
>      CMGI has that right now. If you do, then go ahead. I am rooting for
>      you either way.

(to address this last paragraph, the reason I like CMGI so much
is the potential-gain/sure-thing ratio is so high, at least
according to my perception.)

BTW, these citations above were made using a shell script I just wrote:

   http://impressive.net/people/gerald/2000/02/21/fool2txt

--
Gerald Oskoboiny <[email protected]>
http://impressive.net/people/gerald/