I feel as though I should leave it that today.
Feel free to come back to the rest of this tomorrow:
Turns out the Like button is cumulative. And does not show up (I think) if you don’t have a Facebook account. Fickle, fickle, fickle.
DEPO, AFOP, ET AL*
AFOP closed last night at $19.59, up 144% since Aristides’ Chris Brown suggested it in September. Just days ago, at $15.60, he thought it “appears to have the golden triad of operational momentum, share price momentum, and undervaluation.” I hope you’ve taken some profits, as the easiest money seems surely to have been made.
DEPO closed at $7.02, up nicely whether you paid $4.50 (56%), $3.02 (132%) or even $2.36 (197%) not quite a year ago. (Thank you, Guru.)
CRME “will resolve its two overhangs by the end of the year,” guru told us November 10, which could push the stock up from the current $4.60 to $7 or more. “Remember, remember, remember.” I cautioned: “he’s often right but not always! So . . . only with money you can truly afford to lose.” The stock touched $7.10 yesterday, closing at $6.99, up 50% in two months. (Guru thinks much if not all the gain has now been realized – it could go to $8 or beyond, but $7 to $8 has been his target.)
EMIS closed at $2.25, up 80% since August. (“Want another truly, truly speculative little drug stock? EMIS may absolutely lose every penny you invest; but guru thinks the risk/reward at $1.25 is good. If you have profits in some of his other suggestions, maybe take a little for a small gamble here?”) If this one works, it goes much higher. If it doesn’t, we’re toast.
YMI closed at $2.64, up 60% in less than a month. (“If you have yet more money you can truly afford to lose,” I wrote, “Guru suggests adding a few shares of YMI to our latest speculative basket.”) As with EMIS, it could all be for naught – or go a good bit higher.
GLDD, our silty, muddy dredger, closed at $8.58, now up 80% from September’s mention. A very smart friend just joined the board, and smart people have a way of finding opportunities, so I feel good holding for the long-term (with all the usual caveats).
BZ is up from 53 cents to $8.38 last night and the warrants, suggested at various prices ranging as low as 2 cents, closed at $1.03, up 50-fold.
So 10,000 Boise Paper warrants [I wrote in October, 2008] could be had for $200 yesterday morning (and $350 yesterday afternoon), down 99% from their high less than a year or so ago. I bought a zillion of them not because I expect the underlying company, Boise Paper, to thrive. But what if it did muddle through? Its stock is down from $10 to 53 cents. What if by June 18, 2011, when those warrants expire, the stock had returned to $10? Highly unlikely, to be sure, but not impossible – and, exercisable at $7.50, each one would be worth about $2.50. So the 10,000 you bought for $200 – plus a deep discount broker’s $8 commission – would have become a $25,000 long-term capital gain.
A less reckless speculation, though still very much a speculation, would be to buy BZ stock itself. The leverage is not as great – and the possibility of total loss certainly still there – but with the stock, there is no deadline by which better times must return. If the stock hit $5 five years from now, you’d have made nearly 10 times the yesterday’s 53-cent closing price . . . whereas the warrants would long since have expired worthless.
☞ So here we are, and those $200 of warrants may still expire worthless – or just might be worth $25,000 (up from the current $10,000), or even more. I’ve sold most of mine by now, but kept enough to be over the moon if it keeps climbing.
It’s worth noting that these aren’t all the suggestions that have appeared in this space, only the ones that have me, of late, the giddiest. Leaving aside our total wipeouts over the years in FMD and WAMU . . . in my idiotic Google puts and my tragic DNDN puts . . . there are lots of others that have not performed spectacularly either way. And still others for which – in the somewhat unique case of BOREF – we wait, like hopeful Casablanca émigrés, and wait. And wait. And . . . wait.
More than that, it’s worth noting: When I get a little giddy like this, it often means the market is due for correction.
That said . . .
GETTING IN ON THE ACTION
Both Guru and Aristides’s Chris Brown, hedge fund managers mentioned here from time to time, have very different approaches but identical $500,000 minimums, open only to “accredited investors.”
But a third super-smart investor friend, Joel Greenblatt, also mentioned here from time to time, has launched four mutual funds suitable, in my view, for retirement plans ($5,000 minimum investment) and ordinary humans ($10,000).
Though I’ve long emphasized the advantages of index funds, with their tiny expense ratios and the low transaction costs / tax exposure inherent in their passive, low-turnover approach, these four funds – two of them domestic, two international – have hefty annual expenses and higher turnover. But, for reasons I address in the new edition of my book, which if you have even a shred of decency you now have sitting by your bedside, or shortly will, my gut is that these funds will justify their fees over the long term:
I could be wrong, of course. And (even if I’m not), in hindsight, this could turn out to have been a terrible time to invest in the market in any way, even through funds that might wind up performing relatively less poorly than most others. But, for what it’s worth, I expect to put some of my own meager retirement money in each of these funds. (Because they’re so new, the “full service” brokerage firm at which I have my retirement account won’t let me buy them. I’m working on it.)
*ET AL – The Airline of Etcetera. Or, wait: “ET AL, The Airline for the Others of Us.” There’s something here, I think.
Quote of the Day
As they say in poker, 'If you've been in the game 30 minutes and you don't know who the patsy is, you're the patsy.'~Warren Buffett
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