Cap and Cash

NOT PLAY MONEY

Victor Kava: “Although I personally don’t play with money I can ‘truly afford to lose’ – usually – except when I do – I enjoy reading the investment discussions you post. I believe that you are still Treasurer of the DNC, yes? I’d be interested in a write-up of how you manage the DNC funds. Especially, a discussion of how you view the investment goals, and then the investment strategy. My guess would be that the DNC funds are not invested in puts and calls.”

☞ Your guess would be correct. We keep the funds in the bank, which helps offset the bank fees for processing what last year were more than a million separate contributions. I keep arguing that we should put a little into Borealis, but the one guy who agreed with me turned out to be a McCain operative.

Where the funds are really invested, in the main, is in building OFA (Organizing for America), the successor to OFA (Obama for America) – our hundreds of thousands of neighborhood activists determined to help move the President’s agenda and keep Congress in progressive hands. It’s an incredibly leveraged investment, because those activists work for free and pay their own expenses.

THE CASE FOR “CAP AND CASH”

Instead of “cap and trade.” Click here to see which you prefer. One way or another, we need to start reducing our carbon emissions.

MODERATE REPUBLICANS?

Following up on Wednesday’s “He Liked Ike,” on the demise of the moderate Republican . . . Rachel Maddow offered this view later that evening.

BZ

Kirk E.: “I still have several thousand of these BZ warrants that we bought way back when, and to me, the stock still looks cheap at only 4 P/E and has room to possibly run higher. My question is, do you still have some, and what is your take on the stock?”

☞ I still have lots – even after having sold lots – because something possessed me to buy zillions of them at 2 cents. (Not literally zillions, of course; but oodles.) Yesterday, as you saw, I suggested selling some and holding the rest.

Not sure how solid that P/E is. Yahoo Finance shows the estimated forward P/E as 10.7, which is not quite as cheap. The company has a lot of debt and is highly sensitive to paper prices. If those prices rise – great. If they fall – not so great. Motley Fool lists BZ as “ready to roar,” but the market as a whole seems no bargain here, up 70% from the bottom, though we still face major economic challenges . . . and the demand for paper in an increasingly paperless world – well, all I can say is that if the stock does roar, fantastic. And if it doesn’t, I will still count myself very fortunate to have sold so many 2-cent warrants at prices like 80 cents and 90 cents and $1.

DNDN

Walkingmoney65: “You either have to be a complete nut job writing what you did yesterday, or it was written for your short positioned handler that is drowning in debt. They took the wrong side of the DNDN investment this time around and were stupid for doing so. The science and facts have proven this vaccine treatment to be everything that Dendreon claimed it to be. Even to those that had some doubt before, now understand this is the real thing. Do you really do any honest due diligence homework to try and be somewhat truthful with accurate fact finding before you write that trash, which in my opinion is complete [expletive deleted]? . . . Oh I see, one small part of it is to leave you a way out when you are proven wrong about your main objective and the content of your personal hidden agenda. Guess what? You are dead wrong and no one that knows and understands the true facts behind this science proven treatment are giving your opinion any validity at all. I personally think you are nothing more than a hack hoping that someone will believe what you have written in a last ditch effort to try and influence the price to come down enough for you or your handler to save as much money as possible. Screw the shorts and I love the fact that they are trapped now without a way out, except to cover and lose $$$$. . . . Disgusted with your hidden agenda behind that article, but I do love the fact the shorts are trapped and do not know what to do now.”

☞ I post that in its entirety with cautious optimism. It is written in the same tone that ran through endless emails a few years ago when we owned Nitromed puts. Remember NTMD? Guru suggested it would fall from $23 to $1, and the chat board folks grew agitated, mocking and abusive. But the stock fell to $1 anyway. Ultimately, it was bought out at 80 cents a share.

There’s always the chance walkingmoney65 will be right – that the FDA will approve Provenge as he and the market expect – and that guru will be wrong. Even guru admits that possibility. If so, no terrible harm; we will lose some money we could truly, truly afford to lose. It’s happened before.

But there’s also the chance that guru will be right.

Have a great weekend. (And, if you can find ten minutes, don’t forget to watch Rachel’s clip on moderate Republicans. Or to read about “cap and cash.”)