Long time readers will know that I have written about a company called Borealis in this space many times.
First, it is as loony and colorful story as one is likely to find . . . a preposterous number of red flags . . . and yet, as I have written before, Why would Boeing have allowed its name to be used in a press release if this were all nonsense? Why would it later have issued its own press release saying, in effect, this is not all nonsense? Why would IBM have invited Borealis’s CEO to speak at one of its regional conferences earlier this month? And why does that speech read so well? Yet why, if this stood any chance of being real, would those in the audience have rushed out to buy the stock? (The stock barely ever trades.)
And that’s the second reason. To me, the stock is like a lottery ticket – but a lottery ticket that I have developed the insane belief may offer powerful odds.
It would be quite different if the company had a single drug that might or might not extend the lives of some cancer patients by six months and were selling for $800 million. This company, with its 5 million shares outstanding at $6 each is selling for $30 million . . . less than some homes now sell for, or a new corporate jet . . . and if its claims prove true, it would be far more valuable than the aforesaid hypothetical drug company.
So it can’t be true, or else, among other things, all the scientists and engineers who have by now been pitched by the company would have bought shares and told their friends to buy shares, bidding up the price.
So trust me – it can’t be true, and it’s going to zero.
But then why would Boeing . . . why would IBM . . . why . . .
Several of you with vastly more technical background than I have explained over the years why all this is technologically impossible. A few have then come back to say you’re not quite so sure, though still doubtful.
Anyway, if you have $600 to blow on a 100-share lottery ticket – and most people don’t! – read the speech and see what you think. If there’s a 10% chance this could pan out, two things could be true: first, and most evident, you have a 90% chance of losing your money. Second, it could be a very good bet. Why? Because if it panned out, it could easily be worth a 100 times what it is today. In which case you’d have a 10% chance of a 100-fold gain, which the mathematicians in the crowd will tell you is a very good bet to take. (Bet $1 ten times and you lose $9 the first nine times, then make $100 the tenth time. Repeat.)
One must be very quick to add that this kind of logic could be applied to justify any speculation. It’s all in the assumptions one pulls out of the air. If there is only a one in a million chance Borealis technology is real and can be commercially exploited, then you would bet ten bucks a million times, losing $10 million, before finally, on the millionth time, making $1,000.
I am dying to find out the end of the story. Promise me you will not gamble any money on this you cannot truly afford to lose without pain. But promise me also you won’t sell if it goes up a few points. You don’t take one-on-ten chances (let alone one-in-a-million chances) to turn $600 into $900.
Quote of the Day
I like to buy [stock in] a business any fool can run because eventually one will.~Peter Lynch
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