Click here if you need instructions or the form.


Last month I excerpted this ‘from the 82nd Airborne via the New York Times‘ –

As responsible infantrymen and noncommissioned officers with the 82nd Airborne Division soon heading back home, we are skeptical of recent press coverage portraying the conflict as increasingly manageable . . .

– and suggested it was ‘well worth’ reading the whole thing. ‘(Surely we owe the authors that much.)’

Well, two of the seven authors were killed Monday.

It shouldn’t matter – people are killed there every day, and every person’s life is precious.

But somehow, this just brings it home all the harder.


Posts like yesterday’s elicit questions like, ‘Are you still short DNDN?’ (Yes.) ‘Do you still have SYM?’ (Yes.) Why didn’t you say not to sell BOREF?! (Because some things go without saying!)

But let me say a little more about the latter two. (As to DNDN: one of the conditions of the User’s Agreement you digitally signed to gain access to this site was that you would never short stocks because – forgive the legalese – ‘If Danny jumped out the window, would you jump out the window, too? Now go do your homework.’)

I’m still long SYM for two reasons. The remotely sensible reason is that a friend who owns more than 100,000 shares and does nutty things like actually go to the annual meeting and – imagine this – read the S.E.C. filings and the footnotes, believes the value of the company lies in its real estate, and that one day the company will be sold to unlock that value. He doesn’t know what it will go far, but at $20, a few months ago, he was hoping for more like $25 or $30 or $35, and had long since adopted the attitude of ‘being in it til it’s over.’ (We bought it around $8 in February, 2004; it paid out a $1 dividend about a year later; it’s around $16 now.)

And that’s the second reason I still own it: because of Friendly’s watermelon sorbet and their mayonnaise-drenched tuna salad sandwiches on wheat toast. If you don’t see the immediate connection to Syms off-price clothing stores (‘an educated consumer is our best customer’), it’s this. I really liked Friendly’s, especially those two items, and back in the 1970s I bought a few shares thinking others would feel likewise – and that the company was a perfect acquisition target.

I waited and waited – time moved a lot slower then, when a year represented 3% of my entire life (do you remember how long a year was when you were seven?) – and the stock just did nothing. And there were other tempting opportunities, but I didn’t want to sell. But the stock still did nothing, and, as I may have mentioned, there were other tempting opportunities – indeed, temptation was everywhere. But I didn’t want to sell. (Patience, Jackass, patience!) And then one day, with the stock at least a little higher, I rolled the money into something else. And the next day, or the day after, a merger was announced at double or triple price. I don’t remember the specifics, just that I was deeply scarred. (And not too thrilled to think I had been lured to sell by a price rise doubtless brought on by some insider buying. If they had managed to keep the deal completely secret, so the price didn’t creep up in anticipation, catching my attention and tempting me to – finally – take a small profit, I would have woken a few days later with a terrific surprise.)

Irrational animals that we are, we internalize experiences like that. I’ve owned SYM for five years. If it can wait, I can wait. Sometimes, of course, this is a recipe for disaster. I might wind up riding SYM back down to 5 – or worse. But there is more at stake here than money. If the stock went to $5 I’d be bummed. But if I sold at $16 and it got bought out at $28 a few weeks later, I’d be nuts. (Of course, it is from just such irrationality that poor investment decisions are born. But I’m only human. I’m not selling my damn Syms until Sy Syms sells his.)

With BOREF it’s different. In the first place, there’s no one I could sell to. This is a stock that trades, like, three shares a day. I have, like, a billion shares.

In the second place, I don’t own it mindlessly, relying on a friend’s assessment. I own it brainlessly, perhaps, but not mindlessly. To me – as you know ad nauseum – it represents a lottery ticket with terrific odds. Yes, there is a very real chance we’ll lose all our money. Really. But – unlike the typical lottery ticket – there is also, I think, a significant chance of winning. Not a million times your bet overnight, but perhaps 10- or 20-fold over a few years. And, yes, I know how stupid that sounds, given all the red flags. But the plane really did move, so far as I can tell; and the magnetite deposit really does appear to be very large and quite possibly commercial . . . and, one foot in front of the other, slowly, progress is being made.

So providing you have made your bet only with money you can truly afford to lose, don’t sell your BOREF either.


Less Antman: ‘Tuesday’s commentary was good. One quibble: I agree that, in a DEFLATIONARY depression, both commodity futures and stocks would do poorly (before considering the reduction in the cost of living) and bonds well (as would having no debt). Given Fed policy and the absence of a gold standard, an INFLATIONARY depression, which would slaughter bonds, is far more likely, and that would be a dream scenario for commodity futures. Of course, that is essentially what Nixon managed to produce [in fairly mild form] in the early 1970s.’

Chris Luse: ‘In regard to Michael Fang’s comment about a recent increase in correlation between asset classes (and Less’s request for data to back that up) – SmartMoney.com has correlation statistics between mutual funds and the S&P 500 over the last 3 years. PCRDX has a correlation statistic (R squared) of 0% – perfect for diversification. For comparison, bonds (via VBMFX) has an R squared of 1% (also good), while real estate (via VGSIX), which is often touted as a diversifier, has an R squared of 38%.’


Comments are closed.