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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (69122)	10/15/1999 10:19:00 AM
From: Tommaso	Respond to of 132070

Maybe you are not gambling, but I certainly am. I went wrong (for me) whenI moved away from the expensive long-term options where the strike was about 2/3 of the current price, and towards cheaper, nearer-term ones. For me, the long-term options provide many more opportunities to get out with a pretty good gain. Although expensive, the time-value premium is a smaller percentage of their price than it is for cheap options. Since options are guaranteed to be worthless at some point, much like a losing ticket at a race, and since they represent no tangible assets or claim on income or wealth, I think I had better admit that I am gambling, not investing. I am continuing to hold some SCH 20s of next January, with the clear understanding that they will be worthless in January unless SCH is quoted at under 20 and I remember to sell them in time. I am gambling. The person who buys and holds the Schwab stock, however misguided, is investing. The market has been so insane, however, and stores of value are so fickle,that it has seemed to me that the only chance for preserving real capital is to gamble. In a more desperate situation, it would be the case of staying on the sinking ship or making a swim for it. I think the U. S. economic system is a ship with a bottom that is nearly rusted through.