But first . . .
Warren Kaplan: “Republican leader John Boehner has declared that the passage of the health care reform law will lead to Armageddon. Although I have never found myself in agreement with Boehner in the past, I now find myself in total agreement. Notwithstanding the president’s many arguments to the contrary, we are now clearly at the point of Armageddon, as in Ah’m a geddin’ sick and tired of all the Republican hypocrisy, fear-mongering and scare tactics, and I hope we can soon move on to addressing all the other serious challenges that face our country.”
REPEAL AND REPLACE?
From Bill Press’s latest column, this reminder: “In 1936, one year after Franklin Roosevelt made Social Security the law of the land, Republican Alf Landon ran against him on the slogan: ‘Repeal Social Security.’ He carried two states.”
OUR EVOLVING BASKET
Last October 29:
A basket of mini-drug-stock speculations that might double a year or two from now – to be bought only with money you can truly afford to lose – is INCY (suggested June 11 at $3.40 or so, $5.62 last night) and DEPO (down to $3.02 from $4.50 or so when suggested here the first of this month, so I’ve bought more) and DYAX, yours yesterday for $3.17.
In January, we sold INCY at $10.81 – so that one had pretty much doubled – and replaced it with DCTH at $5.37 (or $4.61) and in February added NBIX at $2.60 – as always, only with money you can truly afford to lose.
Last night, DCTH was $6.77, but my guru expects an upcoming F.D.A. ruling to send it higher and thinks it could top $30 in three or four years. Which is a fate-tempting* way to say: “don’t rush to sell this one.”
DEPO, DYAX, NBIX are up only marginally. Guru advises “hold on.” And – while we’re at it – guru suggests you hang on to your DNDN puts. They will go to zero and you will lose everything if the F.D.A. gives the company the upcoming ruling that the market expects, or – more likely, in his view – zoom if it does not.
*Famous last words? “Don’t worry…it’s not loaded.” – Terry Kath, rock musician as he put a gun to his head and pulled the trigger. (And I like this one, even though it makes a different point: “Now, now, my good man, this is no time for making enemies.” – an expiring Voltaire, allegedly, when asked by a priest to renounce Satan.)
And now . . .
HOW TO FIX WALL STREET – I
As usual, per this from the Miami Herald (thanks, Paul!), Warren Buffett has it right:
. . . Despite the recent legislation proposed by Sen. Christopher Dodd, Buffett believes too-big-to-fail will never go away. Given that, he says, “If an institution had to go to society and say ‘save me because if you don’t save me, I’m going to topple society,’ I would have it so that that person, the CEO and his spouse at least come away broke.”
In other words, if the bank needs a bailout, the CEO and his top aides should go bankrupt. Never mind bonuses. Buffett sees the risk of personal financial ruin as the penalty that will keep bankers from gambling with our futures. And he says the risk should not be covered by insurance or by the corporation. . . .
☞ If you have a chance to read the full piece, you will also learn about the volcano erupting in Iceland – and I don’t mean this one.
HOW TO FIX WALL STREET – II
Someone sent me a copy of Jim Stone’s March 19 Boston Globe op-ed, from which a snippet follows.
But can I just say first – in the spirit of, “we have hot water!” – that to find the link to the op-ed (which had not been included with the copy I was went), I entered nothing more than BOSTON GLOBE ADMIXTURE (figuring that Stone was one of relatively few to use that word recently, albeit buried near the end of the piece) and somehow – in ways I will never understand – one second later, there it was. What a time to be alive!
. . . Leading Wall Street firms no longer think of themselves primarily as investment banks and commercial lenders, channeling money to growing companies and spurring free enterprise. Their big profits now come from trading, defined broadly to include the securitization of debt and simultaneous repurchasing of similar debt securitized by others.
Washington has been slow to consider whether the furious level of trading activity, in addition to exacerbating America’s corrosive income disparities, is a result of ill-conceived policies. The public may see the realities more clearly than the policymakers, too many of whom are mired in the fallacy that boosting Wall Street profitability to its prior levels is both necessary and sufficient to bring the rest of the economy back to prosperity. It is neither necessary nor sufficient, and it is fair to inquire whether such a course may even be counterproductive. . . .
☞ Have a great weekend.
Quote of the Day
The people who sustain the worst losses are usually the ones who overreach. And it's not necessary: steady, moderate gains will get you where you want to go.~John Train
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