Well, that’s not entirely fair, but with First Marblehead at $41 early last week, I had visions of an astounding profit. There were my options to buy the stock at $35 – purchased for 75 cents a few days earlier and now worth $6 – but also on my astounding number of options to buy it at $40, purchased for just 25 cents each and, now a few days later, selling for $1.50.

The halls of our home rang with a boisterous oinking. I was so fixed on the ‘refresh’ button of my stock-quote screen, I couldn’t tear myself away even for Web Boggle.

Had the stock closed the week at, say, $43 . . . just a bit higher than it was . . . my astounding number of little 25 cent options would have been magically transformed into an astounding number of $3 options – now, that’s real money! – and victory would have been ours.

And, yes, with hindsight, had I even just ‘taken the money and run’ when the stock pierced $41, it would have been magnificent. Six times your dough in a week?

Instead, the stock closed the week at $38.20, and my imagined twelve-fold gain on those 25-cent options became, instead, a 100% loss. Happily, I had bet only money I could truly afford to lose (hey, I read this column, too). And, happily, I had lost less on the 40s than I had made on the 35s – so we’ll still be able to afford salad. But spinning it will just have to wait.

In the meantime, I continue to own the actual stock, for all the reasons suggested last week – and with all the usual caveats. And in the meantime, I would like to stress that, as always, and this anomalous episode notwithstanding, playing the options game is normally a very bad idea – much like Las Vegas, but with even your small winnings, if you should have any, reported to the IRS.


This week’s drama is HAPN, the ‘blank-check’ company formed to make an acquisition in the health care field. Will the acquisition be approved Wednesday, rendering our astonishing number of warrants, purchased at 25 and 35 cents, exercisable? If so, their theoretical value, at least, would be well in excess of a dollar. (Who knows where they would really trade; but a three-year option to buy at $5 a stock currently selling for $5.70, is at least theoretically worth more than a dollar.) Or will 20% of more of the shareholders vote to bust the acquisition and render the warrants worthless? Suspense music, please.

THE 400

Even if it all works out, we won’t make the Forbes 400. Here‘s the current list – just out – which you can sort by rank or name or even by age, residence, or the source of their fortunes (just click the column heading). The Beanie Baby guy is #79 with $4.1 billion? That’s got to really annoy Donald Trump (#117). Good. (David Rockefeller – #149 – would doubtless see the irony, but is too much of a gentleman to care.)


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