Free the Treo 300 July 9, 2004February 27, 2017 LOOK FOR OSAMA TO BE PRODUCED DURING THE DEMOCRATIC CONVENTION* And about time, too! WASHINGTON, July 8 – Osama bin Laden and his chief lieutenants, operating from hideouts suspected to be along the Afghanistan-Pakistan border, are directing an al-Qaeda effort to launch an attack in the United States sometime this year, senior Bush administration officials said on Thursday. ‘So someone please explain to me,’ writes my pal, Joe Porter, ‘why our 130,000 troops are in Iraq rather than Afghanistan?’ *No, really – click here. KNOW ANY FLORIDA VOTERS? If so, get them to check here to see if they’ve been deleted from the voter roles. I found two Tobiases (though not me) and what appears to be virtually every Thompson who ever lived. FREE TREO 300 I got one. You want one? As a special thank you for subscribing to this column, it goes free to whoever needs it most, as expressed in verse. (I’m old-fashioned. I like verse that rhymes.)
You’re Not in the Bottom 97% – You’re in the Top 100%! July 8, 2004January 21, 2017 THE BOTTOM 97% Todd MacDermid: ‘You wrote yesterday . . . But if you’re in the ‘bottom 97%’ (as I have to think most Americans are) . . . Argh! No one wants to be in the ‘bottom 97%,’ even if 97% of us are. How about, ‘But if you’re a regular hard-working American that doesn’t happen to be as wealthy as Prince Bandar or Warren Buffett?’ Most people want to associate themselves with good things.’ ☞ You’re right. I was being ironic, but it still came off badly. CHERNOBYL (and MediCare) Brad: ‘A couple of months ago, you posted a link to a website about a biker who drove through the Chernobyl disaster site. According to this story in the LA Times, apparently the whole ‘biker thing’ wasn’t true. The disaster is real, but the whole ‘biker thing’ probably is not.’ ☞ Oops. Truth is our most precious commodity. I hate when people fabricate or try to hide it. One recent example from yesterday’s New York Times: July 7, 2004 INQUIRY CONFIRMS TOP MEDICARE OFFICIAL THREATENED ACTUARY OVER COST OF DRUG BENEFITS By ROBERT PEAR WASHINGTON, July 6 – An internal investigation by the Department of Health and Human Services confirms that the top Medicare official threatened to fire the program’s chief actuary if he told Congress that drug benefits would probably cost much more than the White House acknowledged. A report on the investigation, issued Tuesday, says the administrator of Medicare, Thomas A. Scully, issued the threat to Richard S. Foster while lawmakers were considering huge changes in the program last year. As a result, Mr. Foster’s cost estimate did not become known until after the legislation was enacted. But neither the threat nor the withholding of information violated any criminal law, the report said. It accepted the Justice Department’s view that Mr. Scully had “the final authority to determine the flow of information to Congress.” Moreover, it said, the actuary “had no authority to disclose information independently to Congress.” Mr. Scully, who resigned in December, in part to become a lobbyist for health care companies, had denied threatening Mr. Foster but had acknowledged having told him to withhold the information from Congress. The report, by Dara Corrigan, the department’s acting principal deputy inspector general, said, “Our investigation revealed that the Centers for Medicare and Medicaid Services did not provide information requested by Congressional members and staff, and that Scully threatened to sanction Foster if he disclosed unauthorized information.” The report said that if Mr. Scully still worked for the government, he might be subject to disciplinary action for possible violation of the department’s standards of ethical conduct. But Ms. Corrigan discovered “no criminal violations,” though she sent her findings to the General Accounting Office, a Congressional investigative arm, to determine if Medicare officials had violated an appropriations law that protects the right of federal employees to communicate with Congress. In May, the Congressional Research Service said Mr. Scully’s order to Mr. Foster apparently violated that law, which has been on the books in various forms since 1912. William A. Pierce, a spokesman for the department, said Tuesday that the threat was not illegal because the actuary was supposed to report to the head of the Medicare program, who, Mr. Pierce said, had a right to dismiss him in case of insubordination. “No laws were broken,” Mr. Pierce said. But Representative Pete Stark of California, the senior Democrat on the House Ways and Means Subcommittee on Health, said, “It sounds as though the Bush administration examined itself and found it did nothing wrong.” The senior Democrat on the Senate Finance Committee, Max Baucus of Montana, said that given a limited scope of the investigation, “we cannot know about the involvement or knowledge of White House officials” in the suppression of information. When President Bush signed the Medicare bill on Dec. 8, he hailed it as “the greatest advance in health care coverage for America’s seniors since the founding of Medicare” in 1965. Republicans were counting on the measure to help them win votes from the elderly in this year’s elections. But Democrats, including Senator John Kerry, the party’s expected presidential nominee, have waged a campaign to discredit the law, which they say is more helpful to drug companies and insurers than to elderly and disabled people. The internal investigation was ordered by Tommy G. Thompson, the secretary of health and human services, on March 16, four days after House Democrats requested such an inquiry, and nearly four months after Congress approved the Medicare overhaul. In recent weeks, Mr. Scully has registered as a lobbyist for major drug companies, including Abbott Laboratories and Aventis; for Caremark Rx, a pharmacy benefit manager; and for the American Chiropractic Association and the American College of Gastroenterology, among other clients. All are affected by the new Medicare law, which Mr. Scully helped write. Mr. Scully did not reply to messages left Tuesday at his office and his home and on his cellphone. In an interview in March, he acknowledged disagreements with Mr. Foster but said, “I never told Rick he would be fired.” Mr. Foster had estimated that the Medicare legislation would cost $500 billion to $600 billion over 10 years. The White House told Congress the cost would not exceed $400 billion. Ms. Corrigan said she had uncovered numerous requests from Congress for data and cost estimates prepared by the Bush administration. In many cases, she said, Mr. Scully did not recall the requests. “On June 17 and Nov. 7, 2003,” the report said, “the minority staff director for the House Ways and Means Subcommittee on Health made written requests to Foster for estimates of the total cost of the Medicare bill. Scully did not recall the staff director’s requests.” Copyright 2004 The New York Times Company
More Good News July 7, 2004January 21, 2017 MONEY I don’t know whether ‘something’s happening’ with Syms (SYM), suggested here in February a hair below $8 a share, but it has recently moved up 30%. Should it be acquired for its underlying real estate value, as hoped, some smart folks think the deal would be done at more like $15 or $20 than the current $10.32 – so don’t sell. That said, I have no clue whether anything is actually going on. If not, the stock could certainly fall back to the $6-$8 range it has traded in for so long . . . or lower if the New York real estate market should crack or Syms’s clothing business should tank (Syms sells clothes). So I’m not buying more SYM here; just waiting patiently for what I hope might sooner or later be a good outcome. Meanwhile, the TXCO suggested on that same day in February is down 7%. It is more of a speculation than SYM (when has oil ever not been more of a speculation than real estate?), but so long as you only invest money you can truly afford to lose, hang on. We might get lucky. (The other, more substantial oil stock suggested here last month, Anadarko Petroleum [APC], is no sure thing either, but is up 7%.) POLITICS So now we have the gravitas, the experience, the heroism and the sizzle. (John McCain on John Edwards in the Charlotte Observer, February 26, 2001: ‘He’s got the ambition, the talent and the brains to go very far, to be president of the United States.’) John Kerry is going to be elected President 118 days from now – and a good thing for most of us, too. Consider: Does anyone think that John Kerry and John Edwards do not care more deeply about the ‘bottom 97%’ of Americans than George Bush and Dick Cheney do? The 97% who work hard to get by on anywhere from minimum wage to perhaps $200,000 a year? The irony is that the top 3% do just great under Democratic administrations, too. The years 1993-2000 were terrific for those who were best off . . . and I don’t begrudge them a penny of it. But if you’re in the ‘bottom 97%’ (as I have to think most Americans are) . . . or if you care about people in the bottom 97% (because they and their kids are our future) . . . you should give John Kerry and John Edwards a hard look. My view is that the great preponderance of us will be far better off under Kerry/Edwards than we would be if we choose to ride four more years down the current track. (Conversely, does anyone doubt that George Bush and Dick Cheney have an easier time relating to the Ken Lays and Prince Bandars and Halliburton executives of the world than to your child’s fourth-grade teacher or to the tens of millions with no health insurance or to the two-income family mired in bills and struggling with credit-card debt?) As to the ‘trial lawyer’ rap, I have a suggestion. After you see Fahrenheit 9/11, rent Erin Brockovich and see whom you are rooting for at the end of the movie. I’m no shill for the trial lawyers, having spent a great deal of time and money pushing for tort reform. The system needs sensible, measured reform. But neither should anyone doubt the positive impact the trial bar has had on our collective health and safety. The trick is finding the right balance – and just as it was Nixon who could go to China, so it just might be a phenomenally successful trial lawyer . . . turned Senator . . . turned Vice President . . . who could help broker some meaningful improvements. Anyway, I have high hopes for November 2. Hang on, America. Things are about to get a whole lot better. ‘One thing that Buddhism teaches you is that every moment is an opportunity to change. And we will have a moment in November to make a big change.’ – Ron Reagan
Good Apples July 6, 2004January 21, 2017 GOOD APPLES Ken Manuelian: ‘Well I sold all the Apple LEAPs. (A bird in the hand!) Between the profit from them and the U-PLAN [pre-paid tuition program], I have enough to pay my child’s education and all necessary expenses. Thank you for the suggestion. I am one of the people who have listened to you over the years and made 7 digits and retired at 55 (to Florida, where else?).’ Bob Fyfe: ‘In reference to holding your Apple 20 LEAPs for five more months to receive favorable tax treatment, you wrote in Friday’s column: So one thing you can do is sell an equal number of Apple 32.5 calls. I disagree with this strategy. I’m assuming that you would like to sell today to lock in your gain – except for that darn ordinary income tax burden. If that’s the case, what you want to do is set a floor for the LEAPs. Selling calls gives you income in exchange for accepting a ceiling. In order to lock in your gain, you need to BUY a PUT. This sets the floor and locks in your gain. Unfortunately, there is a cost associated with this that you may not want to pay. To address that issue, there is a technique called a zero-cost collar. Using this technique, an investor sells a CALL (as you did) and uses the proceeds to buy a PUT. This sets both a ceiling and a floor but allows you to wait out the five months for your tax savings. The result is as if you sold your LEAPs at today’s price but with favorable tax treatment. (You’ll still kick yourself if they go through the roof, but you’ll also be much happier if Apple drops below 20.) Here’s a website describing the technique.’ ☞ That’s completely sensible if you want to lock in your profit here, as you say – no more, no less. I think for most people that probably is the better strategy. In my case, I was being a little greedy, willing to bet the stock will be close enough to the current price that, even if it slips a little, I will still come out ahead from the premium I was paid for writing the call. In my case, owning January 2006 Apple 20 LEAPs, I got $6.40 for selling an equal number of Apple $32.50 January 2006 calls, which – if the stock doesn’t fall – is like selling the stock for $38.90 if Apple stock is $32.50 or above in January of 2006 (namely, the $32.50 strike price plus the $6.40 premium). But I don’t disagree with you . . . it’s just a somewhat different bet I’m making, motivated by more than waiting out the long-term holding period. TO THE CHICAGO TRIBUNE A letter to the editor (slightly truncated): I’m always surprised by the fact that people on the right seem to believe that because we want Bush out of the White House that it follows logically that we also wish for American failure abroad. We are patriots without lapel pins; patriots who fear for the lives and futures of our children. Patriots who believe that this administration should have been saying, “Yeah, but…” all along. “Yeah, but what if that’s not enough troops to catch Bin-Laden?” “Yeah, but what if the Iraqis don’t greet us as liberators?” “Yeah, but how are we going to pay for it?” “Yeah, but what if we create more terrorists than we’re getting rid of?” “Yeah, but what about funding first responders?” “Yeah, but what about securing ports and nuclear facilities?” “Yeah, but what if North Korea needs money right now and sells nukes to terrorists?” “Yeah, but what about those Saudis?” Instead of, “Yeah, but he tried to kill my dad.” We already have an immense failure on our hands. Not one of the Bush administration’s stated goals has actually been accomplished. Now we are faced with the task of cleaning up the mess left by a proud C-student who ought to be asking himself, “Yeah, but what if God didn’t really want me to do this? . . . ” Sincerely, Gene Weygandt FAHRENHEIT 9/11 Robert Levy: ‘If I were to go to the movie a certain percentage of that money may find its way to Michael Moore’s hands. Now I ask myself do I really want to give money to a man who travels around Europe telling audiences how arrogant, violent, stupid, Americans are? And does Michael Moore have access to information that Time, Newsweek, NY Times, Wall Street Journal, ABC, NBC, CBS, Safire, Friedman, Will, Nightline, US News, etc., do not?’ ☞ Think of it this way. Which is the greater risk – enriching Michael Moore by $1 because you bought a ticket to the film? Or electing the wrong president because you chose not to hear the other side of the story? Worst case, you leave the theater confirmed in your belief that Moore is despicable. With so much at stake – everything from our standing in the world to the stem cell research that could save your loved one from year’s of suffering – isn’t that a small price to pay to confirm your belief that there’s nothing new or important in his film that might affect your view? ‘One thing that Buddhism teaches you is that every moment is an opportunity to change. And we will have a moment in November to make a big change.’ – Ron Reagan
Have a Great Weekend! July 2, 2004January 21, 2017 So maybe you bought Apple 20 LEAPs last November at $4 when Apple was around 20, and now Apple is around $32 and you have tripled your money (the January 2005 LEAPs closed at $12.60 and the January 2006 LEAPs closed at $14.80) – except that you sold half back when you had doubled your money, but now you have tripled your money on the other half – and you are getting nervous. Should you take your profit? Hold on to see how much higher it goes at the risk of losing it all? If the stock neither rises nor falls from here, you come out ahead by holding on five more months until you’ve owned the LEAPs for a year and a day. (Say that, between federal and local income tax, you’re in the 35% tax bracket on ordinary income, but in the 18% bracket on long-term gains. And say you made $10,000 on these LEAPs. Waiting five months until your gain goes long term saves you $1,700 in taxes – a phenomenal 56% annualized compounded rate of return. [Isn’t math fun? Turn a quarter into twenty-seven cents in a week and you’ve grown your money at a compounded annualized rate of 5400% . . . and made two cents.]) But you know that if you do wait in hope of the favorable tax rate, the stock will fall and your profit will evaporate. This is how the gods amuse themselves. And yet if you take your profit here, those very same gods will send the stock to the moon. I am not suggesting this is the kind of financial analysis we were taught at Harvard Business School, but you know in your bones I am right. So one thing you can do is sell an equal number of Apple 32.5 calls. This sharply limits your profit, should Apple, defying Newton, soar. But that’s the chance you take in return for the premium you are paid for the calls. Let’s say you bought 25 of the January 2005 Apple 20 calls at $4 each. (This is how options are quoted. Each call represents 100 shares, so you actually paid $400 for each call . . . $10,000 for 25 of them. You sold 12 of them a while back for $10,000 and now are left with 13. So you sell 13 Apple 32.5 January 2005 calls for $3.40 each ($4,400 in all) and here’s what happens depending on where the stock is when the LEAPs expire on the third Friday in January: THE STOCK TANKS between now and then. Well, in that case, aren’t you glad you sold the 13 calls? At least you get to keep the $4,400 premium (less 2005 ordinary income tax). THE STOCK SITS WHERE IT IS NOW, $32.30. You still get to keep the $4,400 premium (who would exercise an option to buy Apple stock at $32.50 when they can buy it in the open market twenty cents cheaper?) . . . and you have a nice long-term gain of nearly $16,000 on your January 20 calls (13 calls x 100 shares per call x $12.30 = $15,990). THE STOCK IS $40. You exercise your calls to buy 1300 shares at $20 which you promptly sell at $40, for a $26,000 long-term capital gain. And you buy back the calls you sold, paying $7.50 or so for each (because with Apple at $40, the right to buy it at $32.50 is worth $7.50), for a loss of $5,330. Net net, a pre-tax gain of more than $20,000. THE STOCK HITS 90. Wait . . . I need to move my car from beneath your window. See how this works? By forfeiting all gain above 32.5 in return for that rotten, crummy, who-needed-it-anyway $4,400, you lost the chance of a lifetime. So I’m not saying to do this; just that it’s an option. I’ve done it with my 2006 LEAPs (for which the premium on the calls I sold was $6.40). If Disney acquires Apple at 90 in the next 18 months (a nice fit, wouldn’t you say?), you won’t want to be around me. Important notes: 1. Don’t do this with a full-service broker – the commissions are ridiculous. 2. Don’t do this at all. You’re supposed to be engaged in a prudent lifelong program of steady monthly investments via low-expense index funds. Remember? This column you come to for advice on which presidential candidate to vote for. 3. Have you noticed how guys like me tend to write about their successful suggestions and not their suggestions that have gone nowhere? We do this to keep you paying big bucks for our advice. Here’s mine: vote Kerry. ‘One thing that Buddhism teaches you is that every moment is an opportunity to change. And we will have a moment in November to make a big change.’ – Ron Reagan
Conservative Critics July 1, 2004February 27, 2017 “With the benefit of minute hindsight, Saddam Hussein wasn’t the kind of extra-territorial menace that was assumed by the administration one year ago. If I knew then what I know now about what kind of situation we would be in, I would have opposed the war.” – William F. Buckley Jr., in the New York Times, as quoted by Andrew Sullivan Though less well-known than William F. Buckley, Jr., Charley Reese is a conservative columnist for the King Features Syndicate. He writes: Vote For A Man, Not A Puppet Americans should realize that if they vote for President Bush’s re-election, they are really voting for the architects of war – Dick Cheney, Donald Rumsfeld, Paul Wolfowitz and the rest of that cabal of neoconservative ideologues and their corporate backers. I have sadly come to the conclusion that President Bush is merely a frontman, an empty suit, who is manipulated by the people in his administration. Bush has the most dangerously simplistic view of the world of any president in my memory. It’s no wonder the president avoids press conferences like the plague. Take away his cue cards and he can barely talk. Americans should be embarrassed that an Arab king (Abdullah of Jordan) spoke more fluently and articulately in English than our own president at their joint press conference recently. John Kerry is at least an educated man, well-read, who knows how to think and who knows that the world is a great deal more complex than Bush’s comic-book world of American heroes and foreign evildoers. It’s unfortunate that in our poorly educated country, Kerry’s very intelligence and refusal to adopt simplistic slogans might doom his presidential election efforts. But Thomas Jefferson said it well, as he did so often, when he observed that people who expect to be ignorant and free expect what never was and never will be. People who think of themselves as conservatives will really display their stupidity, as I did in the last election, by voting for Bush. Bush is as far from being a conservative as you can get. Well, he fooled me once, but he won’t fool me twice. It is not at all conservative to balloon government spending, to vastly increase the power of government, to show contempt for the Constitution and the rule of law, or to tell people that foreign outsourcing of American jobs is good for them, that giant fiscal and trade deficits don’t matter, and that people should not know what their government is doing. Bush is the most prone-to-classify, the most secretive president in the 20th century. His administration leans dangerously toward the authoritarian. It’s no wonder that the Justice Department has convicted a few Arab-Americans of supporting terrorism. What would you do if you found yourself arrested and a federal prosecutor whispers in your ear that either you can plea-bargain this or the president will designate you an enemy combatant and you’ll be held incommunicado for the duration? This election really is important, not only for domestic reasons, but because Bush’s foreign policy has been a dangerous disaster. He’s almost restarted the Cold War with Russia and the nuclear arms race. America is not only hated in the Middle East, but it has few friends anywhere in the world thanks to the arrogance and ineptness of the Bush administration. Don’t forget, a scientific poll of Europeans found us, Israel, North Korea and Iran as the greatest threats to world peace. I will swallow a lot of petty policy differences with Kerry to get a man in the White House with brains enough not to blow up the world and us with it. Go to Kerry’s Web site and read some of the magazine profiles on him. You’ll find that there is a great deal more to Kerry than the GOP attack dogs would have you believe. Besides, it would be fun to have a president who plays hockey, windsurfs, ride motorcycles, plays the guitar, writes poetry and speaks French. It would be good to have a man in the White House who has killed people face to face. Killing people has a sobering effect on a man and dispels all illusions about war. © 2004 by King Features Syndicate, Inc.
John Maynard Keynes on Fahrenheit 9/11 June 30, 2004February 25, 2017 FAT CHANCE Tim Sweeney: ‘You picked a poor example of a fat chance yesterday. The Astros have a legitimate shot at the National League Pennant. Texas has enough to apologize for nowadays, so don’t dump on our Astros!’ Aaron Long: ‘Notice that ‘fat chance’ is without exception said sarcastically. Consider how such phrases as, ‘Brilliant!’ or ‘Nice move, genius!’ mean their opposite if said with the right inflection.’ John Seiffer: ‘And why do ‘slow up’ and ‘slow down’ mean the same thing? I guess it’s amazing we can understand each other at all!’ REAL SOON NOW Walter Willis: ‘[The ‘Real Soon Now’ phenomenon Dan Nachbar described yesterday] isn’t self deception. Most innovators only know their special branch of technology. They don’t study innovation in general because they are not innovators, they are chemists or solid state physicists or whatever. I have studied innovation in great detail and depth so I know why things take longer and cost more. It is because every piece of technology out there is supported by dozens of pieces of enabling technology that have accumulated over the years as the problems were solved, one by one by one. A specialist doesn’t really have any reason to know this. Learning is a long and hard process. It’s also why I have literally hundreds of inventions and haven’t developed any of them . . . because it is a lifetime to make not just the one invention, easy enough, but the dozen other inventions to make the one invention work. To use an analogy that you would be familiar with, if you had just the idea of an engine that drove a car, and the understanding that would enable you to make a two-stroke or otto or diesel cycle engine, would you understand the need for a differential, or a pneumatic tire, or a windshield wiper, or a head light, or an electric starter, or a lead acid battery specialized for peak output, or a distributor, or a radiator, or a transaxle, or a rolldown mechanism for a window, or a safety glass windshield, or a transmission, or … It’s like that for every piece of technology out there. Can you imagine thinking up an automobile and understanding why tires have not merely carbon particles added to the rubber, but bias cut fiber reinforcement, and why?’ ☞ I know the woman who invented the Scrunchie, and I don’t think it was even three years between brainstorm and bonanza. But I see your point. Yet Dan is right, too, I think. Faced with a massive project, there is the natural tendency to tell ourselves ‘it won’t be long now.’ FAHRENHEIT 9/11 John Ryan, Beaumont, TX: ‘Usually around here when you attend a documentary there may be one or two other people in the theater. Not today. The afternoon screening of Fahrenheit 9/11 was three-quarters full. And at the end of the movie, people stood up and applauded! Amazing, as this is right in the heart of Bush Country.’ ☞ It’s huge. Here’s another example, from a wire service story: Irvine, CA – In the heart of conservative Orange County, a Regal Cinema theater was initially not even going to show the film, but under pressure from the community is now offering 12 showings a day. The organizer of the Irvine opening, Mitchell Goldstone, wrote to tell me ‘it was the highest grossing event in the theater’s history. I just talked with Regal Entertainment Group management and they actually used the word ‘pandemonium’ to describe what is occurring in front of the theater right now. ‘There are enormous lines of people waiting to buy tickets’ in front of the Irvine Regal University Town Center theater right now – at about 2:00PM (Saturday).’ So think of it this way: if there’s ANY issue you kind of prefer the Democrats on – perhaps ‘the environment’ or ‘separation of church and state’ or the ‘stem cell research’ that could save your spouse or child from some devastating disease (an issue on which Nancy Reagan, among others, agrees with our side) – go see Fahrenheit 9/11. You may leave the theater more convinced than ever that Bush / Cheney / Ashcroft are the men for you. OK. At least you’ll know you’ve withstood a test of your faith in their competence and good judgment and come through it unshaken. Or you may leave the theater less sure. But that’s OK, too. As Lord John Maynard Keynes is alleged to have remarked – ‘When the facts change, I change my mind. What do you do, sir?’
Real Soon Now? Fat Chance! June 29, 2004February 25, 2017 FAT CHANCE I know the big shrimp are the most prized, but at least they are, as logic would demand, bigger than the little shrimp. So answer me this: how is it that a fat chance (as in . . . ‘Astros win the Pennant this year? Fat chance!’) is leaner than a slim chance? How is it, indeed, that a ‘fat chance’ is a chance that falls someplace between slim and none? BOREALIS Chris Bourne, head of PR for Borealis, responds to Leslie Mercer’s posting: ‘We don’t believe it is wise to engage in a semi-public debate on company policy. Such a debate might even fall foul of the SEC disclosure rules, which is why we also avoid making semi-public statements on bulletin boards discussing our company. Most serious companies take the same view. I would much prefer it if people would write to me at pr@borealis.com with these queries. Leslie, for example, has done a whole load of due diligence and has worried about this for nine months now, but has never in all that time contacted us to ask for an answer. If Leslie does, I promise a reply. Indeed, sometimes such replies find their way into our weekly report as well, which is constructed and distributed so that it does meet SEC disclosure regulations, and then everybody can have the benefit of them.’ Dan Nachbar: ‘It’s very hard to draw much of a conclusion from the ugly string of missed deliveries from Borealis that your other readers listed. Often with new technologies it seems like success is right around the corner – only to have the corner become a ‘mirage’ that continuously slips a little further away whenever it is approached. This is true whether or not the technology eventually turns out to be a success. I have heard this behavior referred to as the RSN (Real Soon Now) phenomenon. The RSN phenomenon arises (I think) primarily because inventors/innovators MUST believe that some kind of payoff is reasonably close at hand. Otherwise, how could anyone ever keep themselves in hot pursuit of such elusive goals – sometimes for decades? In other words, RSN arises from that foggy space between dedication and self-deception. It is by no means a completely bad thing. Without it, many of the world’s important inventions would never have been developed.’
How Will These Stories End? June 28, 2004February 25, 2017 A SOBERING VIEW OF IRAQ Click here. BOREALIS Sergei Slobodov: ‘So you call sucking up to the host, shameless self-promotion and a good-old government conspiracy theory a speech that reads well? And you would recommend people spend their money already earmarked for Las Vegas to buy these guys’ stock? Would only make sense coming from a person who owns a fair chunk of the shop, while pretending to be objective.’ Rintala, Donald: ‘I put some money on them myself. Even though failure is probable, expectation value may be very positive (as you point out). I didn’t think much of the Chorus Motor, but the Cool Chips seem pretty revolutionary. Of course, no one yet knows how to manufacture them. That’s the rub. But if someone had demonstrated that it’s impossible, Boeing et al probably wouldn’t be interested, so it’s probably an open question at this point. I think the physical principle behind the Cool Chips is valid. In fact, it’s quite simple. As for manufacturing, you just have to align two metal plates facing each other with a few atomic radii of vacuum in between. Conceptually, that’s also simple. (I don’t know if you’ve read through their tribulations in trying to actually do it.) At a $30 million market cap, they just need to do one little thing right to win (as you also point out). So it’s enticing. Even if you lose your money, you didn’t necessarily make a mistake, as it’s rational to put some money into probable losers which could win big. If only we could really estimate the probabilities involved.’ Leslie Mercer: ‘I respect your right to recommend a long shot like Borealis, however I think you are doing your readers a disservice by talking up Rolls-Royce, Boeing, and IBM while ignoring Borealis’s track record. Last September, I took a look at the history of the Chorus Motor as told by Borealis as published in the company’s annual reports. I went back to 1996 which is as far back as Borealis’s web site allows, but my understanding is that work on Chorus has been going on since before 1996. Anyway, here is the history of Chorus as told by Borealis: Chorus FY96 [W]e continue to work at… demonstrating and certifying the performance advantages of the Borealis Motor(tm)…. [W]e are aiming to lock in strategic partnerships with key industrial giants en route to the commercialization of our technologies and entry into the marketplace. This process will take time and money. Chorus FY97 Borealis Motor Works is in the final testing phase prior to commercialization. We have one major player wanting to use the technology for Locomotives and Off Road Haul Trucks. Once we achieve certification, we expect relatively rapid optimization and sales. Chorus FY98 Borealis Motor Works is in the final testing phase prior to commercialization. The testing has been stalled by over a year at a research organization associated with the Ontario Government. [Then they repeat the claims from FY97 regarding locomotives and haul trucks.] Chorus FY99 Closest to market is the Chorus Motor…. We have built and tested an Alpha version, and are now completing testing on an improved Beta version; we expect to announce these results shortly. Work is already underway on production prototypes. The Chorus Motor has production prototypes underway that should rock the industry. It should be noted that we are building these production prototypes… with leading electronics companies. Borealis expects to license the Chorus Motor technology to major motor manufacturers. Chorus FY00 The Chorus motor is on the market. We are actively seeking purchase orders for Chorus motors for test purposes and we are very interested in selling exclusive worldwide licenses for particular market niches…. While the Chorus motor’s operating specifications look very similar to permanent magnet (PM) motors, Chorus motors offer much higher reliability, at a fraction of the cost of a PM motor. We have built and tested three versions of the Chorus motor, with work well underway on a Delta version, an advanced engineering prototype…. [T]he Chorus motor will help make hybrid-electric cars an economic reality. Fiscal 2001 should yield improved operating results. The Chorus Motor has several purchase orders pending for development motors for specific customers. This is a very short step to market. Additional builds of the Chorus Motor have been basically completed, and we are beginning a public round of testing. We hope Chorus Motors plc will have both positive cash flow and earnings in fiscal 2001. Chorus FY01 To date the Chorus Motor technology is still under development such that the Company has not made any related sublicence sales. Chorus FY02 The Company and Technical are actively working together to negotiate sales or further sublicensing of its technology to various parties, which is expected to generate profitable operations in the future. Chorus FY03 Fiscal 2003 was, we expect, our last year as a development-stage company. Shortly after the fiscal year-end, we completed our first production prototype Chorus Motor, and we plan to introduce Chorus to the marketplace at a series of motor/drive trade shows beginning in June. We hope a year from now to report significant revenues and earnings for fiscal 2004. ‘FY04 is complete and it’s almost time for the next annual report. What are the odds Borealis will report ‘significant revenues and earnings for fiscal 2004?’ Not good in my opinion. ‘I realize this is lengthy, but I’d be honored if you made this information available to your readership. However, what I’d really like is for you to use your position as an apparently major stockholder to extract from Chris Bourne some kind of explanation for Borealis’s repeated failures to close a deal. I want to believe. I really do! We all dream of holding that winning lottery ticket. I merely want to be convinced that I’m not buying my lottery ticket from a swindler.’ ☞ Amen. (If Chris Bourne responds to this column, I will post his response.) Now . . . go back to the top of this column, if you have time, and click the link to the piece on Iraq. If it’s valid (and I deeply hope it’s not), it’s hard to see how the near-term U.S. investment climate could be particularly bright.
Take in a Movie June 25, 2004March 25, 2012 Listen. I just saw Farenheit 9/11. You don’t have to agree with every aspect of Michael Moore’s world view to find it deeply affecting. For those unhappy with the country’s direction, it is a must see. For those who voted for Bush, it will be challenging to watch. Rise to the challenge. Think of it as a civic duty to listen to an opposing point of view. You will find it far less taxing than jury duty. And then tell me what you think. Have a great weekend.