Baltbear on Finance markets are like marshmallows

here are 2 dialogs to answer that ever popular question:

how do you give quantification to the future?

A day or 3 ago, isco.ob concluded a deal. the deal has terms. they are readable….but not yet filed with the sec (isco is draggy on that…)

the deal involves $10mm. to which i commented: so what?
the deal appears to value isco’s i/p at this moment at $40mm…to which i said, that’s a large “what.”

a sometimes intelligent person asked me:

:”Are you for real balt??????”

very much so…

:”(during these particular times), ”
u mean when capital is buying junk paper at rates that ensure the double dip???
are u watching the spread between t-bills and corporate junk?? that tells the prudent speculator that cash inflows for speculation are masssive. (people who think of tv as a news source get confused by the dow not being 18ooo or whatever, and think that means that there’s no capital to be had…but the ability of industry to float crap bonds at <6% says plenty of $$$ is chasing a home..)

:”does not dilute we shareholders,” if it had it would be negative….and not “so what”…
(people who think buying retail common shares of a puppy with no ebitda is “investing” usually end up double and triple counting any positives. “no change” = 0 …..not +.

:”comes through on it’s promise ” –if that isn’t pretty much a given, it’s worth 0.
so it gets no points for being above 0–it was already there.
(this same class of speculators and gamblers are so used to enabling mgt failure that mgt competence is read as a miracle. that is, mgt failure is the fault of a “weak market” “investor ignorance” “obama/bush/fda/reptiles from outer space, and mgt competence is a miracle who needs all our money—in spite of the obvious fact that retail purchase of common puts >>>no<<< money into corporate treasuries. it does make it much easier for insiders to raise capital by showing actual investors what the mkt is as they roll over their positions.)

:”while still being a developmental stage company”
that’s the btim koolaid on your breath…a puppy that has been “development stage” since 1992…

:”the company is pulling rabbits out of it’s hat ”
if i thought that…i’d tell clients to dump asap… there’s only so many rabbits in any given hat..

:”That is a big WHAT in my book. Bought more today.”
that’s nice. tiredof probably has a bridge in ft washington he can lease you cheap…if ak gets  a cut.
(that’s a reference to btim.amex, whose ceo holds himself out as the world’s #1 expert on stem cells, regardless of harvard, warf, etcetcetc… )

:”I would like to hear some of the directors that are responsible for closing these deals speak. ”
i want them to keep their mouths shut and keep working…but be able to do better than have i/r brag about minimal compliance on date of a 10q…

:”As far as ip goes, not possible to put a price on it yet”
that’s compleat nonsense. if u can;t put a price on something, the price is 0.

:”but 40 million? Ridiculously low. ”
well then, isco got screwed, didn;t it????
and all the ydydyydaaa smoke u said first means nothing.
(btim, frinstance, trades in part based on a putative valuation of a patent estate it >leases<, and of patent applications that are years from approval..and therefoire value @ ??? $.0.00 ..until cash flow from those patents is measurable.

:”You have 10 million people in need of corneas ”
that’s already been thoroly discussed..and comes down to 1 point:
that’;s nice–how much $$$ do they have?

:”it looks like we are there already” not to anyone who knows the drill. (actual IND, phase i,ii,iii, etc will require…2 years? 4? how many millions in paperwork??? enough for another tranche of funding to be necessary. but..in my analysis, isco can get seriuous and have the next tranche be > 1 7/16–which makes any buying now at retail the equivalent of “insider prices.”)

:”I could go on and on as I did before regarding all the other potential.”
yes…as you have, many times, without even beginning to do any actual dd…

:”The ip is likely worth much more then 40 million.”
whatever….then scream at aldrich how the krauts shafted him….

i am working from the data at hand:
somebody is excecuting a biz plan.
somebody who knows the biz says full access to 20% of the i/p is worth $10mm..

prudent speculators will note that this is a solid deal…and run their numbers, and run their voodoo.
and will be accumulating hard.

is the difference between these 2 pov obvious?? yeah. and yet, that poster is long isco, and i have clients long isco.

he’s long because isco management miraculously found $10mm.
i;m long because intelligent people ran a valuation, and thast valuation supports a price closer to 1 1/2 than 1…

he’s long isco because they’re going to growing eyeballs any day now.
i’m long becuase isco is steadily closing in on actual prodict and praxis that will lead to sales higher than overhead.

each decision i am making is based on a quant. that quant may be difficult to see—but if it can;t be seen, it’s worth 0.

no matter what the talk.

story stocks are about the odds of walking the talk.

from another board, a closely related discussion…what’s the “story” and what quants are there.
this one is a high point (in re the reduction in venom from a pawn of insider $$…) that also may help clarify to the prudent speculator what due diligence is.

:”BTIM sells stem cells and takes an interest in the upside of the discovery that may be created”
btim is certainly free to make such contracts with anyone who would fall for them….
on the other hand, millipore doesn’t.
:”Had You attended the annual meeting you would have known that, ” at the last ..lol..annual meeting, 9 months prior, numerous shareholders left with the understadning of how important rgi/nih direction was–and mikey was doing dog&pony on it—just a few days before nih said no.
and then it was never the plan at all.
now it is true that anytime mikey/garfies/ak/neal want to they can give judy $35 on her debit card and another “wholly owned subsidiary to…” can appear.
:”what makes Harvard the expert? only your opinion…”
rotfl….
u forgot to dis warf….
:”when anything comes Out in the Media, Dr West is the first person”
cuase he takes the call, knows how to put on makeup and can do 8 second soundbytes.
how come when there is a real peer review conference on stem cells, mikey is always too busy hyping whatever puppy he’s doing to have actual work to present?
:”plan to be the picks & shovels supplier dictates constant predictable cash flow, thus steady long term growth, once again, ”
yup. totallllly. yup. u betcha..of course, that discounts ur opening point, unless dealing with somebody so broke that they pay for picks and shovels by offering a shares in the mine…which is not predictiable cash flow.
:”just like anything the components cost bucks and one company can get rich creating the components, to deny that is foolish…”
yes. one company can–if it has both first mover and quasi-monopoly…like 65% of potentuial mkt share… it’s sometehing i read for when i’m looking at proposals.
or–if it can be made cheap enuff, and then have a ginormous markup for convenience.
:”Millipor picked Biotime,” not in evidence as to who went to whom… even if mil initaited, yeah, they were adding stem cells to the mix..a 150 page catalog…which was 150 pages thick when btim signed on to have 2 items in it.

:”post their names,”
post urs…u impotent boytoy poser…

:”look at calculators”…yeah..go ahead..look…i watched the price of a hot handheld ti move from $1200 to $10 for the same functions over 8 years…and to $1 over the next 5.
cars? tata is on ther mkt at like $2600….

:”and Balt not all lottery tickets are a buck,” i’ll take ur word for it…not a part of my portfolio strategy…

:”and insiders continue to invest more funds,”
yup. so determining >>>>their basis<<<< is the issue.
and those who like this puppy should be trading to get a basis like that of insiders…which is close to 0.

(this cannot be stressed enough. the prudent speculator should not be lazarus at the gate, waiting for a dog to lick his wounds. the prudent speculator does not homage the insiders and grant them some natural right to more profits. if insiders will finance so that gthey are functionallly in @ $1–then prudent speculators will trade to that basis. “buy and hold” is an abomination–a false god that lets the pumpers, bucket shops, and insiders keep drawing their bonuses at the speculator’s expense, usually by telling him he is an “investor.” )

:”so he helped me make over 1000% on my money, not you.. ”
u’ve reported before being in this puppy at 4ish ion the way down…or 4ish on the way up the first time after ak came on board…

but u are in fact making the critical point again: those in this puppy <2 have reason to like it a lot.
that has nothing >>>>at all<<<< to do with it at 5 3/8…

(another example of the same problem. the most generous estimate i can give for btim prices 2 1/4. insider finance games keep it above 4. the principal insider is in close to 0. so unless this puppy were offered at <2 1/2….it’s overpriced. can you buy 5 1/2, sell 7, keeping enough shares to share a few odd lots at insiders prices? then, if you like this puppy, go for it. if not, then you’re cannon fodder for the gamers.)

:”sees upside 100 times where the stock is today”
nope…he sees 100x growth in gross revs for the sector.

(Another point that cannnnot be stressed enough. the common stock of a given equity is not the sector, and historically, about 85% of everything goes broke without affecting the sector’s long time story arc. the prudent speculator is invited to read the history of railroad industry financing…hehe)

the issue is how much of that goes to btim ebitda..

that’s “worth” 1 7/8–2 1/2… ak will keep this puppy 4 — 6 with occasional spikes..and keep getting shares at $0 net..

prudent speculators will do the same.

if its 100% your money, your ability to beleive stock board “guidance” is set at 0%.

so…yes. you can quant a fairy tale. one piece of straw at a time.

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

Prudent speculators will often be accusede of all kinds of things.

Here’s an example of a simple baltbear being accused (in a rd person remark)
“. I personally think he has an agenda which I have told him directly and the negativity toward the investments of ISCO”

readers familiar with my pov on isco will note i have 2 clients in isco.ob at this time. They got there “because I said so.”

But i expect isco to head towards 2 1/2— a near double… and then drift towards 4… after it >proves< something.

That gives me an “agenda.”

and there it is….
new readers are invited to note a poster or 6 here and there muttering about prices north of 4…without having read the filings that formed isco in the first place….this same alleged heavy duty hitter thought isco.ob was ipo’d on its own name. Thinking such a thing means they have never read the filings, which shiw it being a double reverse merger shell property.

There’s nothing wrong with that at all. Such a procedure can save thousands of dollars in useless fees to lawyers and other scum. But since this is not exactly ancient history, and is publy available from the sec, >not knowing it<< is a signal of something–specifically, lack of prudence.

i say this is a place to start nibbling, isco.ob because 2 1/2 is coming back… and that’s “negative” in the minds of those who, over and over, say “it’s different this time” whther this time is real estate, the internet, stem cells, “plastics” –going back to “tulips.”

when everyone agrees it’s time to look for the koolaid pitcher that is feeeding it. those who doubt this are cordially invited to read the chaerts of aig, fnm, wamu (o wait, it’s wamu>>q<<) citibank, et al.

personally and professionally i don;t think >>anyone<< is without an agenda.
the issue is…what >>is<< the agenda, and do you benefit or suffer by working for/against it…

as an example of objectivity let’s taqke this statement about the market size for synthetic corneas :”going blind or had vision problems that could be rectified by a pair of corneas, I would pay just about anything.”

uhuh…so, that only says u have $$.

it is a fundamental law of econ that u cannot spend more than u have + what others think u can pay back…unless you steal.

so,tards dd, what % of “10mm people need corneas” can get their hands on …let’s call it, just to be as long as possible on isco…. $3000????

data? source of data?

i can cheeerfully see isco licensing the tech so that somebody in bumphreakistan gets eyesight, and isco gets
~$15 per event.
that might be 3mm custoimers over 10 years @ let’s go conservative and say 50mm o/s….. 9 cents a share >>>straight to the bottom line<<<<…

and people get to see. and isco gets to have a reasonable “fair value” of 4-6…

but pumpers don’t get houses by the lake.

and that is why so many voices here see me as a “basher.”

when somebody wants you to listen to their investment strategy, ask for their agenda. If they say they have none….run away.

mine is based on observing this item of “laws of a baltbear”
“some want to be sharks, some want to be dolphins–nobody wants to be tuna.”

if you are nobody–feel free to see if i’m available for consultation.

fd: 2 clients long isco.

Posted under business

In a day or three, depending on how the euro is doing as people begin to realise that false claims of progress will always be undone by inefficiencies and corruption, i’ll be talking about the most dangerous words in the speculator’s environment: “it’s different this time”.

recall the crazy valuations in the days of the net bubble?

at the time, it was “different this time.”

recall the “artificial blood” stocks of 98-99?

at the time it was “different this time.”

recall mortgage deals of 2005-2008 as the real estate industry sold off its assets??

at the time it was “different this time.”

i recently picked up a reasonable enough fee for explaining to a guy managing a fair chunk of other people’s money what “the big deal” is with stem cell stocks, from gern to isco.obb.

and is different about pricing them for speculation than is true about f, or ge, or mot…and what was the same, because the ojne thing always true for the prudent speculator is that it is never different this time.

Posted under business

those following fnm as a proxy for the economy (and who followed my suggdstions on it)
re-acuired a chunk of fnm when it broke back below $1.
one dollar is a magic marker for fnm. currently it is trading  just under 1 3/16. (new readers are asked to note that i still run charts by the normative trasing currency, the “bit”: 1/8 of $1.)
currently the so-called press is caught up in looking at bernanke’s lack of interest on accepting responsibility for the failure of regulators to regulate. that is in fact a critical problem. fixing that problem is its own issue.
“fixing housing” is yet another problem. with 30% decline in pricing in some critical markets, with bottom only beginning to be in sight, let alone formed, there’s lots of need for right-offs, re-papering, and generic games that will leave fnm common as wall paper.
the difference here is that the mkt will eventuallly sort thru housing. it may take 5-20 years.
at some point, the us treasury will be acquiring fnm stock @ 1. and bleeding it into the mkt…or it will be forgiving the debt. if the mkt requires that forgiveness, things suck.
the treasury bet is that it will profit from the wts (unlike some other tickers, where warrants are used to game the mkt) and will be bleeding some stock into the mkt in slow intervals.
so..if fnm a buy @ 1 3/16??
or is it time to cash out on the recent buys @ 31/32?
those who bought at 31/32 have 40% apr for the year locked in now for that part of their risk capital sectiojned to real estate.

Posted under business

In a recent discussion about some newly issued warrants I had to explain “time value” to  somebody about to be worked over by the bucket shop punks who specialise in pumping the “next big thing.” This year it is tem cells. Next year…who knows? Prudent speculators take risks. They do not however take risks on the promises of ceos, board members, or bulletin board touts. They take their risks on the assets. The assets may be nothing but intellectual property, or a clear road on howe to get some. That’s what makes “story stocks” such an interesting arena. But sooner or later, risk management and reality collide with story-telling. At the point, the road to cash flow, appreciable assets and management style become critical.

As the economy picks up (as i predicted in February, a soft bottom is beginning to form in September) at the same time that credit card defaults are also again on the rise, as banks continue to keep credit tight, i anticipate that “real estate” is going to begin the process of recovering as a speculative sport. It will only be profitable for the bottom feeders. The heroic bottom feeders have been at work for 6 months. Those are the folks who had cash on hand in February and March, and bravely bought those residential properties that looked like they were going to be part of urban war zones. I salute them.

Remember Warren Buffet? Somebody told me there was nothing to learn from him. I laughed, since i recall BOA, and Tino de Angeles. Buffet understand being a prudent speculator, exceopt when he is overly prident, as he admitted a few years ago about selling MCD, because he thought the underlying real estate was being overpriced.

But it;’s a lot better to be wrong about something like that than to be wrong about overvaluing an unexecuted biz plan that depends on leased patents and paint on the tape for success.

Posted under Videos From Youtube

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

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