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Pastimes : Don't Ask Rambi -- Ignore unavailable to you. Want to Upgrade?

To: Rambi who wrote (6560)	1/25/1998 11:28:00 AM
From: Jules B. Garfunkel	Read Replies (1) \| Respond to of 71178

Dear Penni, I'm sorry that I haven't been in touch recently, but I have been in Eastern Europe for the last month. My question to you, and the DAR thread on Thursday, was more rhetoric than actually looking for an answer. It is important, I believe, that we all think about the potential fall out from a paralyzed government, than whether he is guilty or not. Furthermore, I don't think that my opinion is anymore, or less, valuable than anyone else's here, however, I do feel that the repercussions of Clinton's troubles, will have a major impact on the market. It was therefore my purpose to get you to think about how your portfolio might fare in case this situation continues to escalate. As you so correctly remember, about a year ago I also was very concerned about a paralyzed government. I believed then, as I do now, that such an event would trigger a steep decline in the market. If there is anything that institutional investors hate it is uncertainty. The fact that the government could be rendered inoperative, while we are on the edge of a potential world wide monetary crises from Asia, and a potential war in Iraq, I find most disturbing. For sure, in my opinion, it will have a major impact on the stock market. After I read your reply to me, I went back and found the following e-mail that I had sent to Jack Rains on January 18, 1997. I believe that you and Michael may have received a copy at the time. "But Jack, I always keep the remembrance of 1987, fresh in my mind. Eventually, I'm sure that Intel will resume its upward momentum. I do not foresee a prolonged period for this reevaluation phase to take place. My greatest fear though, is that IBM's troubles could trigger a major sell-off, if it is accompanied with some other bad news. A paralyzed government for instance. So Jack, if I am right, how do we play this?" As you may also remember Penni, I bought a ton of IBM Put contracts at the time to protect my portfolio against a major correction. Unfortunately, or fortunately, I did not need this protection and my insurance policy ran out. However, once again I now view IBM Put contracts as a good hedge against a steep correction. Consequently, I bought IBM Put contracts again last Thursday. Hopefully, I will not need this protection this time either, but as of this writing, the situation seems to be getting worse and I am certainly glad I own them. As usual, I reserve the right to be wrong. Regards, Jules