Baltbear on Finance markets are like marshmallows

Brent Arends, writing for Market Watch–something he evidently may be doing more of now that the WSJ has closed its Boston office, (Murdoch@work)  asks s reasonably serious question:
:”Should you take advice from someone who writes for a living? ”
well, if it can be said that a medical doctor writes prescriptions for a living, then..yes.
a “doctor” of biology who writes press releases for a living…no.
a stock board poster trying on his own behalf or that of the dogs that pay him to create the illusion that a given ticker is going to double in a month…..definitely not.
ever.
did i mention “no way, no how”??
if not, i am remiss.
one of the first rules for real houses is that there is a chinese wall between the sell side and the buy side.
that is, those with the task of recommending to people what to buy from the house or the street are not to know what advantage there may be to the house in a price run-up, beyond normal common sense.
this is a condition that can never apply to the guy on abcd:amex who is telling you he bought last year, last month, last week, and will be buying more tomorrow, but he also wants you to compete with him in order flow. that statement by itself proves the lie.
prudent speculators, as noted in a previous column, will look for stock boards and see what intelligent information can be found–about the intelligence of the posters.
Arends is discussing the “plight” of o so poor writers, doomed to make $30 an hour thinking about what they want to think about–instead of making $75 an hour, like a plumber who wades around in slop that is not his own.
prudent speculators will be, if not wading, at least visiting the shore to see the investment profiles of those writing about a ticker. if the profile is pleas to others to buy, buy, buy, it may be time to step back.
people who want you to buy are people who want to sell. that’s understood at wmt, vzn, or mcd.
it needs to be understood as part of dd.

Posted under business

somebody asked me, on a random stock board
what books ti read to get better at reading an sec filing, and doing actual fundamnetal analysis.
using a case in point, i replied,

sec.gov.
reading filings.
on f/a..grahame&dodd…… sigh.
which will tell u to not get near btim, et al..so does not apply.
as i have said before, this is a “story stock”..and the dd is thence all about the story.

u are telling one to urself about future earnings. i am looking for a basis for such that can be measured (in f/a terms) plus some insane multiple to allow for hype.
(peter lynch tells the story of in the late 80’s going to japan over and over, looking to invest there..and always seeing evvvvverything overpriced.. and still going up… but then, one fine day, or 1/4…
http://finance.yahoo.com/q/bc?s=%5EN225&…
whatever u can find by lynch will be eminently readable. and whatever u can find by either adam smith, or that matter, das kapital (u probly want the translation…:-) ).
within those contexts:
1: why does btim keep frontloading filings? (giving data for periods after the reporting period).
2. why does btim not state, transparently, terms of financing?
3. why does btim keeeeep using warrants?
4. why is the patent estate not identified in filings?
5. how many units of cells must be sold to meet g&a, and cog? (i’m ignoring r&d)
what is the present mkt for such?
what is a reaonable growth rate in that mkt? 40% y/over/y? 60%
how come?
who are the cmpetitors?
can they indercut the price?
what >unique< advantage does btim have?
what s mangemtn’s track record at creating value for shareholders?
what is the track record of failures??
(failure is not a problem by itself…annny “story” stock will have plenty.
what do the >filings< ..not the press, say about that?
this entry is not about btim:ob.
it is about how to think about what you hear.
right now, i am sitting sipping some “expensive” coffee–that is, expensive in comparison to the rancid garbage from a folger’s can. this stuff retails for $27 a pound. how does it do that? by having desirable qualities that other coffees do not. it has a niche, which has grown, and can be supplied consistently.
any stock you are told about, no matter what the sector, intends to fill a market in a definable niche, in a better, more cost effective, or more widely distributable way.
if the filings and the company history do not show growth towads defined goals faster than the price is growing, it’s overvalued.
it might be a whore stock to trade. you might get affectionate about it, and want t take some home.
before u do, check for crabs. “crabs” in this case include terms like “about to” “beginning” “development stage” and most important…”debt.”
as the events of the last year show, debt does not go away.
debt/equity swaps are great…if u are on th low sde of the basis in your own postion. nothing to be afraid of. it showsthe financers still beleive in the ticker.
ever heard of rand mcnally? sure you have. for about 1/2 a century it was traded on the pink sheets. thus, if a ceo says a biz plan goal is to get onto a major exchange–be wary.
if the stock can’t get above 4 based on revenue potential seen by a broad market, what is the ceo going to do??
hehe…you don’t wanna know…or actually, you do, since u will either be able to trade the media game, or get traduced by it.
sec filings are in plain english. if they don;t seem like it, be careful.

Posted under business

here are the highlights of the 10k–which came out amazingly “early”. of course that can have nothing to do with my woofing about the biotime habit of waiting til the last minute.
The number of common shares outstanding as of February 26, 2009 was 25,213,569
that’s a 3 million share increase.
“As of March 10, 2009, there were 6,676 holders of the common shares”
was that increase in authorised discussed at the last annual meeting?
when was the last annual meeting?
“We intend to submit that amendment to our shareholders for approval at our next annual meeting.”
:” Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.”
lolol…
for thoughts on accounting and filing with the sec, see
http://baltbear-on-finance.com/stock-market-speculating-is-a-hold-up-shoot-them-with-x-barrels

and  lookie lookie…some amusing info about “big al’s basis”. wunderbar:
:”We paid Greenbelt $90,000 in cash and issued 200,000 common shares for services rendered for the twelve months ending March 31, 2007.  Greenbelt permitted us to defer until October 2007 paying certain cash fees that otherwise would have been payable earlier in the year.  In return for allowing the deferral, we issued Greenbelt an additional 60,000 common shares.  For the 2008 calendar year, we agreed to pay Greenbelt $135,000 in cash and to issue 300,000 common shares.  Greenbelt permitted us to defer paying the entire $135,000 cash fee until January 2009.  In return for allowing the deferral, we issued Greenbelt an additional 60,000 common shares during January 2009.  We have agreed to file a registration statement, at our expense, to register Greenbelt’s shares for sale under the Securities Act of 1933, as amended, upon Greenbelt’s request.  We also agreed to indemnify Greenbelt and its officers, affiliates, employees, agents, assignees, and controlling person from any liabilities arising out of or in connection with actions taken on our behalf under the agreement.

ok, 620k share at a basis of…..zero.
zero.

and: $225,000 in cash.
so, here’s the algebra problem:
a train leaves the nasdaq at 9:30 in the morning with 620k shares which can be sold at any price at all, and bought back at any price less than sold for;
a train leaves park avenue with $225k cash
to buy stock at any price and sell it for any amount more than was paid for;
what is big al’s  basis?
the answer?? 0 on more and more of the shares in his control+ 9% profit after trip tickets are paid for+ $225,000 in cash.
extra credit question:
if late comers to biotime should have to pay 4x more than al pays, what should be their basis?

Since inception, we have primarily financed our operations through the sale of equity securities, licensing fees, royalties on product sales by our licensees, and borrowings.

our total research and development expenditures were approximately $1,700,000 and our administrative expenditures were approximately $2,600,000.
The Credit Agreement permits us to borrow up to $3,500,000, and as of March 6, 2009, BioTime had outstanding Credit Agreement loans of $3,330,000.

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.

Currently, lenders may exchange their notes for our common shares at prices ranging from $1.25 to $1.50 per share,

and our ability to commence and complete the clinical trials that are required in order for us to obtain FDA and foreign regulatory approval of products, depend upon the amount of money we have.

so, taking “big al” lol..out of th equation, what is there for fair market price in the opinion of those who have access to serious due diligence???
1 1/4–1 1/2 ….divided by 1.12.

hmmmm.
that put’s a price amusingly close to 1 3/8..which got defended as a raw marker…
and verrry close to 1 5/32….right where the defense kicked in.

so, those who see that hextend >>>works<<< and give a dang aobut that;
who see that hetacool therefore >>might work<<;
who think that “dr west” matters one way or the other;
and who can overlook an over 20 year trip to the gorss receipts level, and overlook the r&d/g&a of this puppy;
now know what price to pay.
there are 2 ways to pay it:
call them up and ask when they are getting ready for the next level of dilution (which is alread oocurring by seling embryome stock)
or trade this puppy into accumulation s that u end up with shares closer to “big al’s” basis.
so..what is big al’s basis???

anybody notice what this burst of news, did for volume?? 9k thru 2 pm…another 7k tossed back and forth in the last 30 minutes to to create illusion?
http://finance.yahoo.com/echarts?s=BTIM.OB#chart2:symbol=btim.ob;range=1d;indicator=bollinger+ema(20,50,10)+psar+ke_it+volume+rsi+volumema(10);charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined
anybody notice that the whole “sector” as a “story” play now rests on the spines of 8 rats?

Posted under finance

This is a general piece for the prudent speculator. It is about a tool for measuring, at an amotional level some cold hard facts ypou are going to need.
A little history:
once upon a time when the people who said this liquidity crisis couldn’t happn hadn’t been born yet, every 3 months publicly traded corporations wrote up dozens to hundreds of pages of impenetrable beancounter language and sent it to the sec as “proof” of something.
Then, eventuallly, the sec said it would no longer accept “the dog ate my homework”, “10k? the mailmain must have lost it”.
(if an adult reader doesn’t think this kind of excuse is till being made, i offr the 10q of biotime, btim:obb which contains the statement that becuse creditors of the self-styled stem cell research company are in different parts of the country, it took an extra time period to give an honest statement of the debt. some weeks later biotime filed, and the debt had been restructured in a d/e swap showing a clearing price of $1. )
the sec said that a transparent and liquid market is the goal of regulation, and thus mandated electronic filing of text files with readable data.
in just a few years the sec got around to noting that the .txt files could be made almost unreadable by human beings, and that the goal of regulation is a transparent and liquid market. thus, filins in .html became required. (this gives a file that opens from the sec website through your browser window, and then “reads” like a piece of paper.)
as an example:
compare the effort of reading
http://sec.gov/Archives/edgar/data/876343/000091957409002146/d964196_13d-a.htm
with
http://sec.gov/Archives/edgar/data/876343/000095000502000064/p14825_s3a.txt

A while ago, the securities and exchange commission got serious about the idea that actually, since relational databases and accessing data from them has been around for 50 years, they might have value for thw actual owners of a corporation–the people that hire management that then thinks it is the ownership–and potential owners have a right to not read, but actually understand what the filings say, as internally consistent documents.
since lotus notes, excel spread seets etc had been around for about 25 years, average people could find the relationships that had meaning to them.
since in about 1998 there had been serious work done, in part by tim berners lee, to find algorithms which would describe relationship between relationships seen by others, there could be an extensible markup language….xml..
CAn you see a thought emerging in the pea in the brontosauric sec’s head yet?
can you begin to imagine that since adobe acrobat has been capable of making a .pdf that contains pictures, movies, music–a complete little “website” all in one document, secure and shippable and readable, for >>>4 years<<< that corporations wishing te trust and money of the american people could be obliged to make the critical elements inside their filings “clickable” so that people could jump through them making sure there was honesty in them?
thus, there came, after lots of “pick me” “can i buy your congressman a nice plane ride” ? etc… a defined “extensible business relational language.”
xbrl.
an sec filing in xbrl is as searchable as this blog.
and any prudent speculator deserves one.
looking at some new ticker? wanting to get a feel for what your dd can get you?
call investor relations and ask them abot xbrl. if the answer is “we’ll do it as soon as we wil be kicked off the exchanges if we don’t” no matter how that is phrased, walk.
away.
the phrasing can be tricky. recently i was told by one posssible whore to dance with that management was far too involved in creating new products to hace paid much attention to another burdensome government regulation. i’ll never get near that puppy, becuase i never short.
i was told by another that they are looking forward to providing xbrl docs to the sec, because it will reduce calls to i/r to only those that point the company to ever more transparent means of presentation.
in reality, most tickers that speculators can work from are not your friends. they see you as fruit to be smashed to give them the juice to party on.
with this knowledge in hand, you can rob them of the secrets of their failures, double speaks, waste, hype, etc, by taking an x-barreled shotgun to their filings.
if they don;t want you to have that weapon, they are not your friends.

Posted under business