Graham and Doddsville -- Value Investing In The New Era Message Board

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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: David C. Burns who wrote (1695)	7/1/1999 4:12:00 PM
From: LauA	of 1722

IMHO - that theory's too far out. What makes most sense is that Silver, the commodity was cheap relative to replacement cost. So buying at the level he did leaves little real down side risk. Then by taking possession of physical, he likely sells calls against it. I imagine that the $7+ calls were wonderful. This is a wonderful opportunity to turn a non-perishable commodity into a bond. I know from personal experience that individuals can't play that game. You have to be very big to cover the fixed costs. Then the returns are terrific. Turns out that some very savvy value investors have been doing this forever - buying bottom fishing commodity contracts and rolling them. Returns are good, and risks minimal. No leverage is employed. In the Buffett case, he play bank to speculators. Lau

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