Baltbear on Finance markets are like marshmallows

somebody asked “what is a whore stock?” and offered that they had never heard the term…
“back in the day” (not the day when in order to “reform equities trading” by inventing the sec, the deal required the worst abuser, black jack kennedy, to be the sec chief) (not back in the day when tino deangelis cornered the world supply of soy bean oil–only it was water–and created warren buffet’s empire’s starting growth) (not back in the day when somebody noticed it took six bits to process an exchange, so charging $39 instead of $100 was still a monster ripoff) (not back in the day when somebody else said, if we make a mkt inhouse we can fill for $9.95, and clip 1/64 off both sides of every trade–or not fill) when aol im and yhoo i-chat plugin and mirc and icq were used to create cartels and data pools–an idea i keep seeing people thinking they can invent >>now<< in their hubris and self-proclaimed “investor” status–there was a guy styled “tokyo mex.”
a courteous enuff review of tokyo, leaving out evvver so much of amusement value, may be found here:
http://www.angelfire.com/ca5/SonyinCANADA/webpicker.htm

:”JANUARY 6, 2000

NEWS FLASH
Is It Sayonara for Web Stock-Picker “Tokyo Joe”? The SEC says the influential day trader used his site as a front for various illegal activities

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After months of fretting about the subculture of investment chat rooms, the Securities & Exchange Commission on Jan. 5 sued one of the Web’s best-known stock-picking gurus, “Tokyo Joe.” The SEC is asking a federal judge in Chicago to shut down “Tokyo Joe’s” Societe Anonyme, a Web- and e-mail stock-alert network run by Yun Soo Oh Park of New York. The securities cops say Park defrauded his subscribers and misrepresented his own performance as a day trader. Park’s attorney says he will fight the charges.

Park took on the noms de Web “Tokyo Mex” and “Tokyo Joe” in 1997, when he was one of the most active stock-tip posters on such investment bulletin boards as Silicon Investor and Raging Bull. Stories in the press featured him as a spokesman and symbol of the Net’s adrenaline-charged world of rumor-driven chat rooms, day trading, and stock tips. By mid-1998, Park had set up his own Web site, TokyoJoe’s, and launched Societe Anonyme. Last September, Time magazine’s Time Digital online edition cited him as “one of the country’s most influential stock-pickers.”

“SCALPING.”   Although he hiked his membership fees from $29 to $200 a month, Park eventually enrolled 3,800 subscribers, according to the SEC. From July, 1998, through June, 1999, the SEC says, Park collected $1.1 million in fees for e-mailed stock picks and access to his members-only Web pages and chat rooms. One mark of Park’s influence: Web sites where he didn’t post his picks set up windows where their subscribers could follow the TokyoJoe chat on Silicon Investor.”

in reality about 7 a.m. manhattan time, mex would be in multiple mirc equities rooms gathering and disseminating data, creating the early vol that he would later use as part of his technical analysis.

in on some bedraggled shell company fraud chasing immortality or instant communication, or lifestyle premiums, in @ maybe 1/64 as part of fees for helping the wheeling-dealing, so that selling @ 1/16 was a home run, tokyo would announce privately that he was “analysing” dogg.ob. the mirc guys would buy, @1/16 on the open from mm’s seeing it coming, moving the shares they got @ 1/128 for the 1502c.  the mirc traders then sold to those getting the “sa” alerts, who would (in theory) sell to the si or raging bull readers….who would get slaughtered.

it was tokyo who coined the term “whore stock”–a ticker u might spend 15 minutes with if things were going that way, but never invite back to ur portfolio, and totalllly never introduce to ur retirement.

since one of laws of a baltbear–viking’d from peter lynch–is “if u wouldn’t own it for 10 years, don’t own it for 10 minutes” when i use the term i am shifting the valuations.

the corollary is this: if you wouldn’t pay to own it for 10 years, then pay 0.
there are 2 ways to pay 0: don’t touch it,  or …trade to a 0 basis.
if ur trading, make the nut.
if ur a prudent speculator, make the nut, make ur necessary apr, and/or have shares @ 0 left over.

something so-called “investors” almost alllways fail to realise is that there is no inherent relationship
between risk&reward.
just as they fail to realise there is no inherent relationship between goods&services and the attributible earnings to common.
just as trhere is no relationship between potential “social value” of i/p, and the desire of mgt to send $$ out to those who bought from the investors.

once that is understood, then, there can be quite a few pretty girls at the bar, and the night may be young.
to goto the concrete, adls.ob put out a press release today indicating that if a proposed fed solution to a federally perceived problem evver creates another tranche of corporate welfare, adls already has its medicaid card in hand, and is going to go stand in line.

is that an “event”??? nope. and given adls.ob behaviour over the past couple months, it’s not even news.
it’s an oddly dressed chick trying to flag down cars to “borrow a cigarette.”

fd: clients in adls.ob.

Posted under business

“In 2005, Nicholas Negroponte  — co-founder of the Massachusetts Institute of Technology’s Media Lab — unveiled a prototype of a $100 laptop for children in the developing world. India rejected that as too expensive and embarked on a multiyear effort to develop a cheaper option of its own.

Negroponte’s laptop ended up costing about $200, but in May his nonprofit association, One Laptop Per Child, said it plans to launch a basic tablet computer for $99.

Sibal turned to students and professors at India’s elite technical universities to develop the $35 tablet after receiving a “lukewarm” response from private sector players. He hopes to get the cost down to $10 eventually.”

MIT’s Media Lab should be one of America’s “elite technincal universities.” One upon a time it was–and still, probably, is.

In comments about this cited news release, at yahoo, the overwhelming response from Americans was that noting is made in America, this device will suck, it’ll be a cool toy. that last comment was the most intelligent, because those who made it usually said that their buying one would support the project.

Evidently, based on pure numbers, pure quant, pure “science” says that MIT made too many decisions that supported profits for the “cool people”.

The MIT  project depends on $100 per unit subsidy from taxpayers of some kind.
:”India plans to subsidize the cost of the tablet for its students, bringing the purchase price down to around $20.” That’s not a difference of just $85 per unit, it is a critical difference of 60% vs 100%.
There is an obvious Forex-like arb in currency conversion, but the % is what it is, and nothing else.

This device from India probably won’t have the panache and real world support of an i-Pad.
Assuming it works 1/3 as well, a retail buyer can get 5 of them, and run them til they break,
and be a full 50% ahead of buying an i-Pad.

But, without cultural changes, they won’t be “cool people.”

America is becoming a nation of “cool people” who have nothing but their self-absorption, living on borrowed money.  o, wait–it always was. the “money” was first the entire capital wealth of the first natrions people from the Quahog to the Lakota. Then it was the entire prodictive output of 100,000,000 slaves and “push” delivered “immigrants” (as opposed to the African slaves who were “pull” delivered.)

and then, in a “better” world, leaving people where they were, and importing their capital assets–neo-colonialism–and then, for the past generation, just importing their money–at interest.

What has America exported to balance this? belief systems it didn’t want. these were workable belief systems, as India, China, and others have shown. but they just weren’t cool anymore.

When the prudent speculator sees some stem cell stock going overseas to get work done, this is not because the USA can’t do it…but because the insiders at that puppy are working for “coolness”–profits on the books. the question then is where does this coolness flow: to the insiders or to common stock. The easy way to measure is whether the non-USA partners are putting skin in the game, or is the “foreign outreach” based on tax scams and buddy-buddy “cool people” partnerships.

Posted under business

i confine the title a little, for the spyders from google.

as noted about fnm…and prudent speculators who followed my thought a bout it made another above buffet roa recently on it…
there a class of equities one can only justly call whore stocks.
if u have the $$ to risk, they can show u a good time, leave u diseased, and aren;t going to be brought home to meet the folks.
they are often “story stocks”–but then so is fnm, the story being “housing makes america great.”
the prudent speculator stays cold enuff to examine the dd of serious money, when that dd is >seeable<
that is, subject to speculation.
i recently saw an article which gave me some dd from some very competent investigators.
here it is:
:”$3 billion for stem cell research, as authorized by California voters in 2004. Of the $1 billion awarded so far, more than a third — $358 million — flows to Bay Area laboratories.”
so: here is an asset pool, $3bb over 3 years. $1bb a year.
the holders of the asset pool get a benefit no matter the play, since the $$ will be spent in california, creating some cash flow from which the state will take a cut, and the state will be fulfilling its underlying contractual obligation of their being a stake from which to take a cut.
that already makes this a rigged game, one which people who are not from california derive no certain benefit. thus, following this play is already less prudent than it is for californians.
but, hypothetically, let’s say you have $30,000 out of ur working capital to put to stem cells. In itself, that should indicate that you have working capital far higher than $30k, since “stem cells” are by no means the only game in town.
let’s go verry speculative fwd thinking, and say ur totally future loaded, with $500k to work.
there’s solar, biofuel, stem cells, “media”, materials science.  that’s 5…so $100k in each.
so, $100k is to $1bb is easily workable.
a lot of cirm’s $$ will go to universities, again because as long as $$ are in motion in this direction, cirm will be a beneficiary. let’s call it 2/3. that further rigs the deck against you, but it is a price of  doing business as a speculator, obligating you to then get ruffly 3x the ror that cirm gets.
so, you might reasonable say that if cirm puts 1% of its funds on a bet in which you can participate, if you put 3% on the same bet.
if cirm says a corp with a publicly tradeable stock gets 1.6% of it’s $$, then u can, after your own dd, say that 5% of your %% is parity…$5,000 in the example being used.
anything above that suggests the hubris that the speculator knows more than cirm does about stem cell possibilities for making $$ flow.  that decision range is utterly imprudent–utterly stupid.
on the other hand, crim does not care at any given moment what is going on.
therefore, one can “dance” with a given stock, in/out, as long as the commitment is no less prudent than cirm’s.
and now u have a playable whore stock.

the next step is to examine where $$$$$ place their dd. that can be read from filings, and expreses as the basis at which financial insiders are in, with whatever yout own voodoo tells you about black-scholes and the actual events transpiring…not the news releases.
if a year ago, insiders were in at a dime, then paying more than $1.20 is bowing the knee to them. if the stock is trading at 2 7/16, one can trade in/out until a basis close to 1 1/4 is in the port.
thinking that you are not entitled to such a basis is just drinking the  kool-aid offered by the cult leaders.
buffet says it’s better to pay a high price for a great company than a low price for a good one.
but then, he’s talking about stocks with actual events, actual; cash flow, actual markets, and not “stories”.

Posted under business

The prudent speculator will generally listen to what management states as goals.
Somwhere in the s3 there will be something about “we intend to make widgets. there are already widgets out there, and so we may not succeed. we expect to succeed because we have a new way to make widgets.”

Under sec law, random people may attempt to raise a $million under a 504, which functionally only needs to state the goals of raising a mil for some purpose to be later identified.

Generally, people become medical doctors to practice medicine, and people get nasdaq licenses in order to move stock on the nasdaq.

Interestingly enough, as part of the cloning/stemcell/corpsicle, infuse groundgog genes into the brain thinking of the collateral group around dr west of biotime, there is another hybrid:

:”One of the main goals this year for West is to get BioTime traded on either the American or Nasdaq stock exchange.”

http://www.insidebayarea.com/business/ci_12211685

The prudent speculator might think the main goals of a deeply in the hole biotec would be to develop product and revenue stream. That’s one of those antique ben graham ideas that the modern trader knows to avoid. the goal of a development stage biotech is to sell stock, even if it’s been a development stage company for 17 years; actually, especially then.

The prudent speculator might think that a ceo who doesn’t clarify for the press that a “purchase” of shares recorded in a 14d was actually the registration of shares granted as a penalty for failure to meet loan covenants, and as a result as at a basis of 0.

The prudent speculator might think that when the ceo, dr. west, states that
“We’re optimistic that we’re going to be handsomely profitable in a short while,” and is talking about a company that was required to tell the sec in a 10k that if it didn’t refinance debt and obtain further on april 15, it would not be able to continue operations, and told the sec in an 8k on april 17th that its net credit lines had not fundamentally changed, and had had to issue free stock as a penalty, that the “handsome profits” come from selling stock, not from doing biotech product development, especially if said cmpany had once before had a board member (ron barkin, former attorney) publicly state earnings estimates based on a mix if sheer fantasy (instant full market acceptance for off label use) that would be priced in violation of fda guidelines concerning pricing equivalent product.
barkin was gone shortly after that.
how much longer will dr. west and his secrets of immortiality be hanging aorund alameda?

Posted under business

According to biotime sec filings (btim.ob)

:”Current loans under the Credit Agreement bear interest at the rate of 12% per annum and will mature on April 15, 2009, at which time the outstanding principal balance of the loans plus accrued interest will be due and payable. Our ability to continue in operation depends on our obtaining a renewal of the Credit Agreement that will extend the maturity date of the loan and increase the amount of credit available to us.”

so, it is now april 16th. yesterday, the market reacted intelligently to the known facts (thew ones that deny the nonsense of obama= stem cells = west = btim biotime = $$$).

let’s compare this puppy to the largest commercial real estate fir in the usa:
:”"When we did not achieve the necessary amount of agreement on the bond solicitation, at that point we recognized that it was conceivable that we would not get the time outside of bankruptcy that we had hoped for to work on a restructuring,” General Growth President Thomas Nolan told Reuters.”

has biotime bothered to tell the 4500 or so shareholder anything about , generically, “how it’s going” ?
well. no.
that woiuld be silly.
they got the shareholders money. well, no..they didn’t.
the insiders got the shareholders $$$ by being able to short an open box; thereby regaining their risk capital and absorbing, steadily, all of the financioal advantage.
wo else benefits?
let’s go back to the mall bankruptcy:
:”"We will see a significant rise in delinquent and defaulted mortgages in commercial real estate above and beyond what we already experienced,” said Sam Chandan, president and chief economist at research firm Real Estate Economics”
this is something that might be less true in the swams near san francisco where biotime shareholders have spent a largish amount of money in a locked lease that contrbutes to real estate profits, not bodily health.

a fast look at an overly simple 5 day chart gives some clues:
http://finance.yahoo.com/q/bc?s=BTIM.OB&t=5d&l=on&z=m&q=l&c=

imho the fact that btiome could not successfully publish to the sec and the public the reults of the negotiations which it stated must be completed by april 15
says that biotime is playing a losuing hand and willfully misrepresenting itself to the “investor” who will fall for the pitch.
the prudent speculator will require some transparency, and stay away until that transparency is present.

Posted under business

for an easy chart:

http://makemoneyathomeadnetwork.com/link/fanniemae

(an easy way to cut a 120 character url to fit)

do we see it?

would friday have been an intersting day to trade into accumulaton?

http://makemoneyathomeadnetwork.com/link/fanniemaefriday

is 5/8 gone? maybe… i’d be keeping some limit orders in place there.

Several limitorders. and if any filled i would set them as limitsells @ 13/16.

and reload.

the numbers i offered here a few days ago still stand, even if they have generically moved up 1/16 already.

Some years ago, an associate from Philly msg’d me in a yhoo stock chat room…how can you make any money buying stocks where a 1/16 is a big move? my answer? u buy lottttssa it.

negative notes: kuwait cancelling deal with dow. israel/hamas. life in general.

Sir John Templeton: “I buy when there’s blood on the streets.”

positive notes: fnm taking possession of rent houses and maintaining good renters in place, thereby giving itself a little “real” cash flow, which will probably become value add to potential seculative housing buyers.

who wouldn;t pay a little more for a distressed property if there was a solid record of rents rec’d?

the 20% decline for Christmas sales (excluding food purchases, which were used to create a 4% drop) in retail etc indicate debt reduction and cash accumulation, since 20% is (so far) above the drop in payroll $.

t/a people of my trianing would be getting warm feelings over those 2 charts.

Marl Mobius (successor to Sir John) :”I cum when i see blood on the streets.”

ok. thank you for sharing…using limits and pullouts for a condom, fannie mae appear to be evver so worth buying a drink..and some money in the juke box.

Posted under business

One of those real market stories the current mess tends to overlook, alon with other kinds of fraud, is a strategy best described as “doing whore stocks”. i got the term from a former associate, whi went by Tokyo Mex, and speculators who have been around will recall him..or not.

there’s the girls you take home, and the the girls you don’t. it’s not a philosophy for me in re dating, but it has advantages for speculators.

Currently, one of the better ladies of the decade is just out of rehab for her crank habit, fanie mae, fnm.

And today, her rehab center sent her a solid prescription for her methadone… about $10 billion worth.

And it;s late at niht, and she’s sitting down there at the end of the bar, and all the good girls are home woth broken hearts. Do you buy her a drink? She’s shown a heckuva good tme to the first guys wo gave her a cance.. a double off the bottom.

in the middle of the idiocy that is passing for an auto bailout…housing…we remember housing don;t we? that thing nobody is gonna have if somebody doesn;t get some real jobs made??

here’s a hypothetical strategy  for prident speculators with ethics for leaving something to their children and grandchildren w/o too much burden, and a chance to “do the right thing”.
Take a few dollars of speculator money that would otherise go to some “hot tip” about stem cells or solar cells or prison cells, and buy some fnm here around the 5/8 –3/4 mark.
If without any screaming on cnbc it took a sudden hard drip, possibly grab another chunk, because it would be a sign that some major smart money was trying to shakeout human beings and be a lion to eat the whole elephant (see the last article).
if the indicated trend line holds, in a while there will be shares to sell at over $1–where fund managers with ethics will be able to nibble, and more at the $2 mark, if it happens.
A speculator who took loose cash and threw it directly into a bet on housing health is contributing to that health.
a prudent speculator who bought (and these are utterly hypothetical numbers) 10k shares
at 5/8 or so, and sold 4 k shares at 1, and 2 k at 1 1/2, and 2k at 2 over a 3 year hold would have??
hmmm.. $6250 at risk. 4k + 3k + 4k back over 3 years. 11k back. 11k- 6250 = $4750 cap gain, long term..apx a 20% annual ror…which is major league for real houses,
>and< would still be holding 2,000 shares for the grandkids…
(disclaimer: this is neither investment advice, nor an offer to buy/sell. this is an idicator of how serious money got to be serious. i hold no fnm and do ot plan to purchase any over the next 3 years…because i never buy a stock where i dnl;t know the whle story…and “housing in america” is too big a story to understand).
Truly nimble traders can of course beat these numbers usihg the “trade into acumulation” model with more compression…or lose their tails…
but, there’ a story about prudet speculation, and a beat up whore at the end of the bar.

Posted under business