Do you remember when Bill O’Reilly and others lambasted Governor Dean for accusing Tom Ridge of raising the terror alert just before the 2004 election – for political purposes? O’Reilly: ‘Howard Dean came out, and said, oh, the terror alert’s a phony thing, like he knows anything. Like where did you get your intelligence, Howard, Ben & Jerry? Like Dean knows anything. What an irresponsible jerk.’ Well, of course, it now turns out – according to Ridge himself – Howard was right. Read about it here.


Emerson Schwartzkopf (et al): “The tirade you’ve been linking to is actually from a movie called ‘Der Untergang’ (‘Downfall’), based partly on the book Until The Final Hour by Traudl Junge, one of Hitler’s private secretaries. It’s also a segment that spawned seemingly endless subtitle parodies, with Hitler ranting on subjects as wide ranging as the Dallas Cowboys missing the Super Bowl to the failure of his government to procure a Ford Maverick for his use.”

☞ Which is perhaps a discordant lead-in to what follows, but I had to set the record straight. And now:


From a blog called The Mudflats. I tried to excerpt the whole thing for you here – it’s that good – but something buried deep in the cobwebs of Microsoft prevented it from displaying properly, so I’d just urge you to take the time to read it.


I am hardly bragging, having lost tons of your money in all kinds of dreadful ways (FMD and WM most egregiously) – but last October I admitted to having bought some Boise Paper warrants at 2 cents each and I gather from your emails that at least a couple of you followed suit, or else bought the underlying stock. ‘If the stock hit $5 five years from now,’ I wrote, ‘you’d have made nearly 10 times yesterday’s 53-cent closing price.’

Well, the stock hit $4.79 briefly yesterday before closing at $4.53, so it’s up better than eightfold in under one year, let alone five. The warrants, meanwhile, closed at 32 cents, up sixteen fold.

Now what?

Well, at the very least, I’d sell enough so that you have realized a nice gain and are, from here on in, ‘playing with the house’s money.’

The warrants give you the right to buy the stock at $7.50 anytime between now (when you wouldn’t want to, because it’s selling for $4.53) and June 18, 2011 (when you would, if it were selling above $7.50). Were the stock to recover to $10 by then – a ‘were’ so subjunctive it gives new depth to the mood – the warrants would be worth $2.50 each, up a further eightfold from here. So I’m holding almost all of mine, even knowing that the stock might well never approach $7.50 between now and June 18, 2011.

In that same column I suggested ALTU at 50 cents, which did not work out nearly as well. We switched out of that at 68 cents and into INCY at $3.40 which closed last night at $6.47 (and which my guru says to hang on to).

The problem of course is that, having lost all the money you could truly afford to lose betting on FMD, et al, you were not able to buy any BZ warrants at 2 cents or INCY at $3.40.

And that brings us back to the discussion we were having a couple of weeks ago: How much, if anything, to bet with ‘money you can truly afford to lose.’ Come back tomorrow for more thoughts.


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