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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Davy Crockett who wrote (17067)	8/18/2003 11:55:13 PM
From: LLCF	Read Replies (1) \| Respond to of 39344

I forgot to mention the REASON the Black Scholes model [or any model for that matter.... including insurance, etc. which is what option 'premium' really is] is so powerful. It is precisely because they expire. The great equalizer, worth zero or parity. Unfortunately companies don't expire... often enough anyway :) Also, this kind of leverage is rare in the world... warrants on stocks trading at $1??? Stocks likely to have bi-polar distributions [ie. soar or bust] to boot??? UFB at these prices really. If someone wanted to do some leg work for us warrant lovers, they would figure out which stocks had: 1.) drill programs working on potential bonanzas... 2.) Where one loves the potential, but the company has bet the ranch, or is likely to get killed if they fail [Caldero anyone?]. 3.) Low # shares out... mkt cap I suppose. 4.) Highly leveraged. You get the picture... warrants are actually worth a LOT MORE on companies that are highly leveraged and potential boom and busts. DAK