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Strategies & Market Trends : Calls and Puts for Income

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To: pcyhuang who wrote (1213)8/24/2007 2:32:56 PM
From: alanrs  Read Replies (1) of 5891
 
Good luck. NFI is a perfect example of why I am slowly liquidating many of my stock holdings. After going thru everything is ok and the problems are only with the low quality small lenders, to the Fed claiming the problem is contained, to the St. Louis fed guy saying no way we'll cut to help the credit markets, to the surprise cut (2 days later on options expiration day no less)... Between sh*t like that, plus guys with many millions of $s more than they could ever spend needing to steal a little (lot) more from the shareholders (owners) of the company being an apparently widespread and accepted practice through options backdating, again apparently all without negative consequences other than a re-statement of earnings, not to mention the legal moves designed to steal IP, or at least delay paying for it for many years while the courts and appeals process inches forward, or the outright theft of IP by places like China...

In short, I've had my fill. Index funds. Options on Index funds. A lot of cash at night.

A move like the one you described could just as easily bankrupt you, and the forces that will determine that are completely out of your control and probably not even known. Good luck. Not a risk I'd be willing to take.

Full disclosure: I've owned NFI and traded it in the past. I sold 800 shares (pre reverse split) when the St. Louis fed guy insisted there would be no cut. Took a 12K loss. About 1.2% of the portfolio, so not the end of the world, just the last straw for me.

ARS
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