Re the possibility of owning "naked short shares" in your account.

This is one of the reasons I followed Sinclair's advice and got the certificates for the larger part of my holdings. I believe with reasonable certainty that if my purchases were originally covered by "failure to delivers" as opposed to legitimately borrowed stock that the broker would make whatever adjustments were necessary to correct my holdings before passing on the paperwork to the company's transfer agent to issue a certificate for my shares.

There are several reasons for owning stocks directly.

1. I think (I cannot positively state this as fact as I did not inquire of either the broker or transfer agent) it eliminates any doubt as to legitimacy.

2. If your broker suddenly goes under, your validly held stock will be free for you to do with it what you wish. It will not be tied up in the courts for possibly years. You take your certificate to your new broker, execute a "non-revocable stock power" transfer to him and he puts the stock in your account available for trade within a day or two.

3. Those shares absolutely and positively cannot be borrowed for even legitimate short sales while they are in your possession.

P.