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host · 11-10-2007, 11:42 PM

I'd buy $3,000 face value pre-1965 silver junk US coins, dimes and quarters:
http://www.tulving.com/goldbull.html#silver , a $33,000 invesment. Last time gold broke $800/oz, silver went to $50/oz, it's $15.50 on Nov. 9.

These coins are recognizable, need no assay to sell, aren't subject to fraud, as drilled out/base metal filled bars have been in the past, and are much easier to use as tender to pay for things if US paper fiat script collapses completely.

In case gold is not in the rising trend I am perceiving (gold price decline will drag silver down with it, if I'm expecting rising gold to push up silver....), I'll hedge the silver purchase with "insurance" good until third friday in Jan. '08... 3 "put" contracts on PAAS *Pan American Silver", allows me to sell 300 shares at $30/share. even if declining silver price drags PAAS shares below that price:
http://finance.yahoo.com/q/op?s=PAAS&m=2008-01 Cost= $475 including trade fee.

I'd buy 500 shares of SRS (double short realty ETF, moves up double the rate of decline in the realty stocks sector) at $105/share. In august, when financial stocks had declined less than in the current decline, SRS topped out at $121.29
http://finance.yahoo.com/q?s=srs Cost= $52, 510 including trading fee.

I would hedge the SRS shares with BSC call options. BSC, Bear Stearns moves opposite the way SRS moves. BSC has dropped from $126 to $96, in just a few weeks. I'd buy 5 BSC "Call" options expiring Jan. '08, allows me to buy 500 shares of BSC at $95/share, even if the price rises above that.
http://finance.yahoo.com/q/op?s=BSC&m=2008-01 Cost= $5,760 including trading fee.

I'd sell 2,000 HRB (H&R Block) shares short at $19.00 per share, using the margin available in my brokerage account, collateralized by the 500 SRS shares. Cost= $19,010 imcluding trade fee.
http://finance.yahoo.com/q/op?s=HRB&m=2009-01

HRB attempted to sell it's home mortgage division, Option One, to Cerebrus capital, earlier this year. They expected to recieve about $700 million from the sale. The sale won't happen, Option One Mortgage is actually worth less than zero, because:
http://calculatedrisk.blogspot.com/2...n-concept.html

HRB runs the risk, as all mortgage originators do, that those who bought the MBS (mortgage backed securities) issued by firms like Option One, will "put back" the MBS on the mortgage originators, if appraisal fraud or lax underwrting in "stated income" ("liar" loans) can be established by lawyers and investigators hired by pension, hedge, and mutual funds now stuck with the MBS. When that happens, HRB would be forced to buy back the MBS at the price they sold it for, and then mark it to market...possibly at less than half what they pay back for the MBS.

Neither the failed Option One sale or this new MBS risk is yet priced into HRB shares. IMO, HRB is a "short sell and hold" which needs no protective options hedge, and could decline to $10 per share or lower, after tax preparation season ends next april.

I would donate 20 percent of any profits from investments on my "windfall" $100,000 to https://secure.democracyinaction.org...t=Redesign.dwt

11-10-2007, 11:42 PM	#54 (permalink)
host Banned	I'd buy $3,000 face value pre-1965 silver junk US coins, dimes and quarters: http://www.tulving.com/goldbull.html#silver , a $33,000 invesment. Last time gold broke $800/oz, silver went to $50/oz, it's $15.50 on Nov. 9. These coins are recognizable, need no assay to sell, aren't subject to fraud, as drilled out/base metal filled bars have been in the past, and are much easier to use as tender to pay for things if US paper fiat script collapses completely. In case gold is not in the rising trend I am perceiving (gold price decline will drag silver down with it, if I'm expecting rising gold to push up silver....), I'll hedge the silver purchase with "insurance" good until third friday in Jan. '08... 3 "put" contracts on PAAS Pan American Silver", allows me to sell 300 shares at $30/share. even if declining silver price drags PAAS shares below that price: http://finance.yahoo.com/q/op?s=PAAS&m=2008-01 Cost= $475 including trade fee. I'd buy 500 shares of SRS (double short realty ETF, moves up double the rate of decline in the realty stocks sector) at $105/share. In august, when financial stocks had declined less than in the current decline, SRS topped out at $121.29 http://finance.yahoo.com/q?s=srs Cost= $52, 510 including trading fee. I would hedge the SRS shares with BSC call options. BSC, Bear Stearns moves opposite the way SRS moves. BSC has dropped from $126 to $96, in just a few weeks. I'd buy 5 BSC "Call" options expiring Jan. '08, allows me to buy 500 shares of BSC at $95/share, even if the price rises above that. http://finance.yahoo.com/q/op?s=BSC&m=2008-01 Cost= $5,760 including trading fee. I'd sell 2,000 HRB (H&R Block) shares short at $19.00 per share, using the margin available in my brokerage account, collateralized by the 500 SRS shares. Cost= $19,010 imcluding trade fee. http://finance.yahoo.com/q/op?s=HRB&m=2009-01 HRB attempted to sell it's home mortgage division, Option One, to Cerebrus capital, earlier this year. They expected to recieve about $700 million from the sale. The sale won't happen, Option One Mortgage is actually worth less than zero, because: http://calculatedrisk.blogspot.com/2...n-concept.html HRB runs the risk, as all mortgage originators do, that those who bought the MBS (mortgage backed securities) issued by firms like Option One, will "put back" the MBS on the mortgage originators, if appraisal fraud or lax underwrting in "stated income" ("liar" loans) can be established by lawyers and investigators hired by pension, hedge, and mutual funds now stuck with the MBS. When that happens, HRB would be forced to buy back the MBS at the price they sold it for, and then mark it to market...possibly at less than half what they pay back for the MBS. Neither the failed Option One sale or this new MBS risk is yet priced into HRB shares. IMO, HRB is a "short sell and hold" which needs no protective options hedge, and could decline to $10 per share or lower, after tax preparation season ends next april. I would donate 20 percent of any profits from investments on my "windfall" $100,000 to https://secure.democracyinaction.org...t=Redesign.dwt Last edited by host; 11-10-2007 at 11:47 PM..*