SiCKO!
I got to see Michael Moore’s new movie, SiCKO, last
night, which opens a week from Friday. Run don’t walk. This movie is going to be huge – and have a huge impact. At the screening I attended, 1500 people were
on their feet cheering through the entire credits.
GLDD WARRANT REDEMPTION
This one has
worked out well. If you paid 70 cents
for ALBA (now GLDD) warrants at the end of April, 2006, you
are sitting on a nearly 7-fold long-term capital gain. It’s probably time to sell much or all of it
in the next few weeks (read on).
If you bought
more August 4,
at 36 cents, the gain is 13-fold – but still short term. Should you wait until it goes long-term in
August?
Well, you
can’t. The company has announced it
is redeeming the warrants no later than July 19. That gives you two basic choices: sell
between now and then (even after ordinary income tax at the top bracket, it’s
close to a 9-fold gain); or pony up $5 a share to exercise the warrants (and
start the year-and-day long-term holding period ticking all over again).
If you happen to
be rich, especially if the alternative would be to pay short-term capital
gains, I’d pony up the $5 a share, exercise the warrants, and wait a year or
two or three, hoping to sell at $12 or $15 or something like that. If things go badly – well, you’re rich. Who cares?
But if the plot
plays out as it may, with dredging appropriations restored to historic levels,
leading to more work at higher margins, then you will have paid $5.36 (the 36
cents you paid for the warrant plus the $5 you kicked in to exercise it) for
what might be a $12 or $15 stock. No
“nine-fold gain, that,” of course; but still not bad.
Indeed, if the
stock stayed where it is for a year a day from the time you acquired it by
exercising your warrant, you would have “made” the same absolute gain ($4.32,
based on last night’s close), but by paying 15% long-term capital gains instead
of 35% short-term, say, you would have made about a 10% after tax return by
tying up the extra $5 along with the $3.17 after-tax bird in the hand you left
in the bush.
If you’re not rich, just grab most or all the
gain, maybe exercising a little just to keep enjoying your association with
this lovely little investment.
(I’m a little
rich, so I plan to sell what remains of the warrants I have that have gone
long-term, as well as some of the
warrants that will still be short-term, exercising the rest. How many?
Well, not so many I’d be too overweighted in this one stock.)
Hugh: “I’m just a truck
driver but right now I’m sitting on over $80,000 gain on GLDDW.”
F Music to my ears.
BOREALIS
From an Advanced
Explorations press release:
TORONTO, ONTARIO--(Marketwire - June
14, 2007) - Advanced Explorations Inc. (the "Company" or
"AEI") (TSX VENTURE:
AXI) is pleased to announce that the
Company has completed establishment of a
40 man exploration camp on the Roche Bay, Nunavut iron ore project. The
Company has mobilized two drills to
site and the contractor (Boart Longyear) is expected
to have the first drill coring by the end of this week and the second drill early
next week. The Company objective is to complete a minimum of 15,000 meters of
drilling before the end of the exploration season.
F Who knows? This is a whole lot riskier than owning
shares in the nation’s largest dredging company. But if we’re lucky, a few years from now
we’ll have the last laugh. And if we’re
not, we won’t care, really, because we only invested money in this one that we could truly afford to lose.
ALISON GOES GREEN;
YOU GO PURPLE
Okay. I promised it for today, so here it is – tomorrow.