racemize

excellent work! one nit, in case you care: "now" -> "know" on page 5

yep, that was it. Haven't read it in a long time, but I remember enjoying it at a younger age.

So are you in the non-deflation camp as a result?

so if such a deflationary cycle happens, gold prices would presumably plummet right?

This is a very good point--at the time, I did feel like I shouldn't do other helpful things around the house for that reason.

72? I've been using 72, but then I looked up the wikipedia on it and it said it was also the rule of 70 or 69, depending on the situation. Apparently 69 is more accurate for continuous compounding. http://en.wikipedia.org/wiki/Rule_of_72

I think my grandad gave me a book to read about compounding--I don't remember the title, but it was written a bit like a parable and had the main character always save 10% and invest the saved amount. However, I'm not sure how effective that was, because a) it led me to believe I'd be ok saving 10% and b) I still didn't really catch on to how powerful compounding is. It wasn't until later that I switched on to saving >50% and even later until I realized I could do better than brute force saving because of compounding (although ignoring compounding made me save even more). Are they old enough to understand the rule of 70? That pretty much sealed the deal for me.

I just called Fidelity. It appears that hypothecation/re-hypothecation is pretty standard with any margin accounts (e.g., including brokerages other than Fidelity). Accordingly, I switched my investment account back over to a cash account, which I am told cannot be re-hypothecated.

I can relate how I learned to be good with money at a young age: My parents only gave me money for working (mostly chores, but some outside work as well). If I did my chores, I got paid 8 dollars a week. However, half of my money was to be put to college, so I got 4 dollars a week. At the time, I was into computers and wanted to upgrade my RAM (later other things), and the cost was around 180 dollars for 4MB--you tech nerds now have a rough indication of my age. Anyway, I saved 4 dollars a week to 180 dollars several times until I got a real job. This pretty much made me good with money for the rest of my life.

for more info: http://www.phpied.com/short-amazon-affiliate-links-a-bookmarklet/ maybe I was wrong to say this since I am new, but it seemed like a blatant attempt to make money and not very helpful to the discussion. However, he has since edited it to make it more germane. I also went back and reviewed his other posts, which do have substantial content, so I apologize if I offended anyone. I very much enjoy the content and free exchange of ideas on this board. However, I personally would appreciate a disclaimer (which he has made in other posts) about being an affiliate, but perhaps that is because I am very sensitive to the copious amounts of affiliate links in other parts of the Internet that are not very helpful.

that link has a reference ID which makes him money if you click/buy it. My point was that was his second post today that was directly asking for money for himself...

do you just post on this forum to make money? This is the second post today alone.

I'm in a similar situation with Fidelity, but my understanding is that they don't have their own bets. They also are privately held, so I would imagine they would want to keep their own money too.

that seems pretty crazy--I would have expected them to liquidate everything. Is this a decision by the debt holders as a whole (e.g., did they vote to do that)?

I was also curious about this when I read that story. Are they going to reemerge somehow?

Yes, I keep reading about natural gas and its coming use, but every time I look at companies, the cap ex is greater than the cash flow--I have a lot trouble investing in a company like that. Presumably, it just operates differently (since they always invest in the future, but its hard to invest in companies with no real owner earnings...

Thanks for all the input--I doubt I'll ever really do much of the options stuff (perhaps LEAPs at some point) and will just buy when I think the current price is appropriate, but this particular strategy looked interesting. I'll definitely start small if I do though.

well there went my friday morning--good videos. I got to watch them shred one of my poorer decisions.

Would you mind explaining why you picked WRB and ACE over FFH? I've been considering establishing a position in FFH relatively soon.

The BRK.B options seemed to be priced as if this is August 2008. http://finance.yahoo.com/q/op?s=BRK-B&m=2013-01 I still have an order (short) in though! :) I've never traded options, but am I reading the table right? People are buying puts for BRK for strike prices less than 50?

Wow, she went full systemic collapse at the end there.

this seems ridiculous--is there any way of knowing if your current broker is doing this? How do you know if your investments are safe?

Hi Peter, I was thinking of doing smaller time period ones (e.g., 1-2 months) consecutively rather than longer ones. How does a longer contract versus several smaller ones compare over time, including fees? I'd also love an example if you have time.

I was definitely going to have them covered--I was only thinking of doing this sort of strategy when I was unable to find deals and I had cash around, but it does make sense that I probably wouldn't be paid much for the puts.

Well my thought was for buying a relatively stable company (e.g., BRK or CL similar to the article) where I have a price that I'm willing to buy and hold for a long time that is near, but not at the current price (e.g., 70 vs 75) and then sell puts until I got the price I wanted. I wasn't thinking of doing this with a company that might have significant issues (e.g., BAC right now).