Big news for Borealis shareholders at the end of this post.


Bill Shust:  “I’ve read TOIGYEN four or five times since the 1980s.  Way back then you were praising inflation-adjusted Treasuries.  Is there some place you have a chunk of investment today squirreled away against inflation’s possible return?

→ Treasury Inflation-Protected Securities — TIPS — were a terrific buy when they were first issued, yielding as much as 4% on top of inflation.  Today, with the yield below 1%, they still have some advantages, especially in tax-deferred accounts, but are far less compelling.

So what else?

Real estate could eventually rise with inflation  . . . though inflation-caused high interest rates could hurt real estate first.

Same with stocks: as a class, they have been a great long-term inflation hedge.  But as a class, they don’t seem cheap today; and inflation, with the higher interest rates inflation brings, could knock them down first.

Most of my money is in highly illiquid private deals, many of which fade into dust, but a few of which, with time, do okay (Honest Tea was one) – entirely independent of inflation or the stock market.

One I had held for 15 years . . . that I thought had gone bust and had lost track of and written off . . . sent its investors an email not long ago saying that this was different from the email they had sent us the previous week (really? there had been a previous email?) and something different we needed to sign.

I figured, oh well, they are finally going bankrupt and I have to sign something, so I went hunting around for that previous week’s email.

Sure enough.  There it was.  It turned out to be an email —

 

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— saying they had sold the company for a quarter billion dollars.

Mine was a very small slice; but it was still a twenty-fold return.

Patience is my middle name.



Speaking of which, slavishly loyal readers may recall the ‘patience, jackass, patience’ story that so convulsed my brother and me, aged 11 and 7, and that became family lore. (What family doesn’t have its lore?)


After an endless shaggy-dog buildup . . . the jackass asking the camel for water and the camel responding ‘patience, jackass, patience’ and the jackass asking the camel for water and the camel responding ‘patience, jackass, patience’ and the jackass asking the camel for water and the camel responding ‘patience, jackass, patience’ . . . my dad finally fell for it and asked my brother to get to the point – and my brother responded, ‘patience, jackass, patience‘ as he, and then I, wide-eyed with disbelief, burst into laughter (joined soon by my mother and, eventually, Dad).


Current stocks I’ve suggested for which patience might someday pay off — but which you should own only with money you can truly afford to lose — include CNF, SPRT, PRKR, and, yes, BOREF, first suggested in 1999.

After the close of trading yesterday, they issued this spare but significant press release: “GIBRALTAR, Sept. 12, 2019 (GLOBE NEWSWIRE) — WheelTug plc, a subsidiary of Borealis Exploration Limited (OTC Markets: BOREF), announces that it has entered into a definitive agreement with a third party for an investment expected to bring its eponymous aircraft system into service, subject to FAA certification and other factors.

Rather cryptic, but I sure wouldn’t sell any shares, on this news.

There’s still much that could go wrong!  But it sounds as though they may have secured the funding they need to see this through.  Which means I’m not the only one foolish enough to bet fairly big bucks that there could be a pot of gold at the end of this rainbow.

Here’s how I argued 14 years ago (!!!) that the shares could be an interesting speculation even at $100, let alone the $12 they were then or the $6 they are now.  And here was the column from five years ago where I showed how, with varying assumptions, the “true value” of the shares could range from $2.79 to $338.  (The next day, one of you produced a spread sheet into which you could plug your own assumptions and see the share price those assumptions supported.)

So, like those hoping for exit visas in Casablanca, we wait.  And wait.  And wait.  And wait.  Who knows?  We might yet make it to Lisbon, and from there, on to the New World.


Have a great weekend.

 

 

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