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To: marcos who wrote (38288)	4/15/2007 4:28:06 PM
From: LLCF	Read Replies (1) \| Respond to of 78409

<you're talking about terms and not plays> Right... of course it IS actually "generally accepted in finance" that buying what is out of favor is a viable and some say THE strategy. Don't get pop culture, Henry Blogget, etc mixed up with acedemic finance. One of the first books one reads in finance is "Maddness of Crowds", or whatever that is. That said, that has nothing to do with valuing options and warrants, if one has somehow divined a strategy of finding missed in current options pricing I can get him/her tens of millions of dollars for it. <at a third or a quarter the price of the common they'd become attractive, above that not particularly, they are a time-decayable after all ... this being based completely on squint 'n guess estimation by a logger who never went to skool, but who kind of questions the validity of any method that does not take into account the potential of the underlying project ... only reasoning i've got, just don't understand the Black-Scholes thing at all ... and apparently it values the epm.wt.a and epm.wt.b at the same price, which doesn't compute imho, and i hold mostly the B-models, still think the As are worth maybe ten to fifteen per cent more, it's only when a larger discount is on the Bs that i buy them [which has been most of the last few months, actually] - imho the higher strike outweighs the slower time-decay at this point, and while that edge will decline over the months it will do so slowly at first> This is exactly what a proper options pricing model, and the understanding of it does for you. You don't have to "guess" what outweighs what. My point ISNT that Koan or anyone else shoudn't comment on what warrants he likes or doesn't, or WHY he does or doesn't... I simply point out that when he talks about "cheap" options or "expensive" options he doesn't know what he's talking about. What he's really saying is they look cheap to him because the stock is so undervalued. And that's great! Look at what I wrote about the sector and mispriced stocks when I started the warrant board: Subject 55130 All I'm saying is that it's helpful to use the proper verbage so as not to be confusing. Warrants and options values are always spoken of assuming the underlying stock is properly priced... when the underlying ISNT then that's great, but I think one should say that... they love the STOCK so much they are looking for high leverage in the options (warrants) if that's the case. dAK

To: marcos who wrote (38288)	4/15/2007 5:23:15 PM
From: Metacomet	Read Replies (1) \| Respond to of 78409

" ... only reasoning i've got, just don't understand the Black-Scholes thing at all ... and apparently it values the epm.wt.a and epm.wt.b at the same price, which doesn't compute imho, and i hold mostly the B-models, still think the As are worth maybe ten to fifteen per cent more, it's only when a larger discount is on the Bs that i buy them [which has been most of the last few months, actually] - imho the higher strike outweighs the slower time-decay at this point, and while that edge will decline over the months it will do so slowly at first." FWIW, I see this exactly the same way, and also hold only the "B" warrants. My intuition is that less than a quarter in strike price better be worth a year of time value or the underlying isn't worth looking at in the first place. Maybe that qualifies me as one of the boobs who shouldn't be playing with things he don't understand.....