So it went down another half a dollar to $5.48 yesterday, and now – this is really so telling – now the professionals on Wall Street, who were steadfastly and professionally recommending the stock since July . . . now they have reduced their rating from BUY to HOLD or from BUY to SELL. Even our old friend UBS Securities, which retains its BUY rating, yesterday lowered its price target from $18 to $8 (down from $28 last August). If they keep chopping it by 10 points every so often, what will the price target be next?
So yesterday, at excruciating length, I passed on news of the first significant cash finding its way into the Borealis family of companies in . . . well, to my knowledge, ever. And receipt of a tentative sort of order (‘offtake agreement’) from a British steel company for between 20 million and 35 million tons of iron ore over ten years beginning in 2010, valued (at today’s ore price) at between $800 million and $1.4 billion.
Yes, 2010 is a long time to wait for this revenue stream to begin, if it does. And yes, it may not, if environmental or other snags arise. And, yes, the ore does not magically pop out of the ground and load itself onto ships, so that revenue is ‘gross,’ not net.
And, yes, the price of ore could fall by 2010 – but it could also rise. And if this steel company wants to buy ore, maybe others will, too – the company seems to think it’s likely got a vast ore store up there.
Such is my clout, and such the persuasive powers of my analysis, that – between the force of the company press release, here and abroad, and my little website that thousands of you read (at least when the topic is self-cleaning ovens you do) – the stock of parent company Borealis closed yesterday unchanged, at $11.70 a share . . . a market cap of $58.5 million).
And this is OK. There remains a real chance that all this, and the company’s various tech subsidiaries, could be worth nothing. No one should buy shares in this speculation who can’t afford to lose his money. And experience shows that no one should buy shares expecting the stock to rocket any time soon. But sometimes the things nobody wants do prove valuable. And sometimes, patience is rewarded.
AH, THE PRECONCEPTIONS WE HARBOR
Gabby: ‘My uncle is definitely the misfit in this family. He is a platinum card caring Republican in a family of uber-liberals. As usual, here on a group vacation, our family has been engaging in spirited debates about everything from global warming to the economy, so you can imagine what that must be like. One comment that my uncle made during one of our discussion was that Democrats don’t know how to manage money. And then my uncle went on to advise my young brother on his finances and recommended that he read My Vast Fortune. My uncle mentioned that this book ‘opened his eyes.’ Well, it was my pleasure to inform him that the author of this book is in fact the treasurer of the Democratic Party. I cannot tell you how surprised he was to find out that it was a Democrat who inspired him to think differently about how to mange his money.’
☞ Listen kids. It’s awkward to brag, but for the last quarter century, at least, it’s Democrats who’ve had some vague notion about how to manage money. Our National Debt was $1 trillion the year Reagan took office and will be $10 trillion the day Bush leaves (unless he uses emergency powers to extend his term). Of that incremental $9 trillion, $8 trillion will have been racked up under just three presidents: Reagan, Bush, and Bush. The interest we must pay on that debt every year, even at today’s relatively low rates, already is equivalent to 40% of all the personal incomes taxes Americans pay – and will almost surely be even higher by the time Bush goes. That’s the financial box Republican leadership has put us – and our children – in, and it’s going to be very tough to get out. So let’s be clear: the modern Republican Party is very good about managing money in the sense of funneling ever more of it into fewer and fewer hands. But beyond that, they have significantly weakened our country, and our children’s country. It is a tragedy.
Quote of the Day
My problem lies in reconciling my gross habits with my net income.~Errol Flynn
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