So the world remains skeptical, as the world will and probably should.
On the news last week that Boeing had selected one of Borealis’s subsidiaries ‘to design, build, and operate a system that should eliminate the use of airport tow tugs and jet engines to move most commercial aircraft on the ground at airports’ (in Borealis’s words) – the stock (which had closed the night before at $7.25) shot up by week’s end all the way to . . . $8.
Several of you wrote in to tell me that electric motors need to be powered by electricity, and thus the glaring flaw in Boeing’s plan was that you’d have to leave the jet engines running to power the generator to supply the electricity to power the motor . . . so, yes, you might save on tow trucks, but not my imagined savings on fuel.
To which I say: have you never heard of extension cords?
Or how about this? A system of Stairmaster footrests that, during taxiing, passengers would be invited to pedal – left, right, left, right – with the energy from each flowing down to the motors in the wheels. Even a small minority of pedalers would suffice, and I think some of us would rather enjoy the exercise. (I know some of us could use it.)
Or how about just using the substantial power supply commercial jets already carry in their tails to power stuff when the engines aren’t running?
One of those three could work. Or maybe not. But my larger point was that for Boeing to have stayed involved with these folks since its initial connection in May, 2001, and then again in December of that year, and now this . . . and let us not forget the partnerings with Rolls Royce and Semikron announced last July and October, respectively . . . well, one almost allows oneself (if one has plunged into this wild speculation with as much gusto as I have) to imagine they may actually be on to something. And that if they are, then the current $40 million market capitalization for their company ($8 a share times 5 million shares) may be on the low side. In drawing this conclusion, I keep coming back to my acquaintance who bought a condominium in Manhattan earlier this year – enormous and brilliantly located, but still just an unfurnished condominium – for $45 million.
If Borealis ever came to be taken seriously in the marketplace, it would sell for at least 10 times its current price. If it ever succeeded in fulfilling some of its claims (is it possible Boeing had already considered the issue of powering the motors before moving forward with this?), it could sell for 50 or 100 times as much.
So, as always, the question in evaluating this lottery ticket is: what are the odds of either of those things happening? If they’re 1 in a million, then one would be a fool to take the gamble. The stock is wildly overpriced. (You would need to take 1 million such gambles, at $8 each, to get a winning ticket. And even if the stock paid off 1000 to 1, you’d have paid $8 million to get a single $8 share that, at a 1000-to-1, brought you just $8,000.)
If the odds are 1 in 10 for the company being taken seriously and 1 in 50 or 100 for its having some actual success, then the stock may be valued about right. (Because the pay-off on the 1-in-10 chance may be 10 to 1 and the payoff on the 1-in-50-or-100 chance may be 50 or 100 to 1. Although, shouldn’t you add those two possibilities together in making this calculation? The head aches merely contemplating the question.)
If the odds are higher – say 1 chance in 2 of being taken seriously and 1 chance in 10 of having a commercial success – then (do the math) the stock is cheap.
OTHER WAYS OF LOOKING AT THE MAP
Mary Black: ‘Don’t fall into the idea that a Bush voter believes everything in the Bush platform or that a Kerry voter believes everything in the Kerry platform. It just isn’t that black and white. We are not a nation divided but a large nation with a multitude of divergent opinions.’
☞ True enough. And (as Mary points out elsewhere in her e-mail) it’s not as if the red states are all red, blue all blue. For graphic proof of that, click here . . . and note, especially, the mostly purple map.
WORLD’S GREATEST BOOK REVIEW
Even so, there are some pretty red states out there, including many that might well be better off if they voted blue. Why is this?
I have been meaning and meaning and meaning to read Thomas Frank’s What’s the Matter With Kansas to find out. But there are so many books stacked by my bed, and I am such an accursed slow reader (and who wants to read in bed when TiVo has the latest ‘Scrubs,’ ‘Daily Show,’ ‘Nightline’ or ‘Desperate Housewives’ waiting?) that I was tempted to leave it at this blessedly compact Amazon.com review . . .
The largely blue collar citizens of Kansas can be counted upon to be a “red” state in any election, voting solidly Republican and possessing a deep animosity toward the left. This, according to author Thomas Frank, is a pretty self-defeating phenomenon, given that the policies of the Republican Party benefit the wealthy and powerful at the great expense of the average worker. According to Frank, the conservative establishment has tricked Kansans, playing up the emotional touchstones of conservatism and perpetuating a sense of a vast liberal empire out to crush traditional values while barely ever discussing the Republicans’ actual economic policies and what they mean to the working class. Thus the pro-life Kansas factory worker who listens to Rush Limbaugh will repeatedly vote for the party that is less likely to protect his safety, less likely to protect his job, and less likely to benefit him economically. To much of America, Kansas is an abstract, “where Dorothy wants to return. Where Superman grew up.” But Frank, a native Kansan, separates reality from myth in What’s the Matter with Kansas and tells the state’s socio-political history from its early days as a hotbed of leftist activism to a state so entrenched in conservatism that the only political division remaining is between the moderate and more-extreme right wings of the same party. Frank, the founding editor of The Baffler and a contributor to Harper’s and The Nation, knows the state and its people. He even includes his own history as a young conservative idealist turned disenchanted college Republican, and his first-hand experience, combined with a sharp wit and thorough reasoning, makes his book more credible than the elites of either the left and right who claim to understand Kansas. –John Moe
. . . but then I got this even shorter précis – move over, Cliffs Notes! – from the estimable John Levy:
Thomas Frank’s book makes one key point: A group of Republicans do an awful lot of complaining about things such as sex on television, etc. They then blame this on the Eastern intelligentsia, a.k.a. “liberals,” when in fact these things can’t be fixed (and the Republicans who control most of the businesses providing the bad stuff are the ones most advantaged by it anyway). It is because of the association . . . “liberals are for bad stuff” . . . that lots of folks end up voting against Democrats and against there own interests. There. I saved you a ton of time.
Specifically, 14 hours and 41 minutes (294 pages at 20 pages an hour, less the minute it took me to read that paragraph) – though I may still dip into the book, which Molly Ivins calls ‘hilariously funny.’
Quote of the Day
The hottest places in hell are reserved for those who, in times of great moral crisis, maintain their neutrality.~Dante
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