Yep, that’s right, Money McBags had jury duty today and as a result, there will be no fucking column as he simply didn’t have time.

As for his foray in to the justice system, they tried to seat him on a 3 day lame ass civil trial but when he calmly explained to the lawyers that he is a misanthropic antithalian, they were nice enough to overlook him in the final jury selection.  That said, it still took most of the day which means Money McBags didn’t have the proper time to get to the market (it also meant traffic on Spankwire was likely down ~25%).   Money McBags did get home in time to tweet some shit out, but that is pretty much it.  So he apologizes profusely but he was just performing his civic duty.

If you all want content, feel free to hit the archives where there is more analysis and boobs than a Federal Reserve meeting.

Actually, Money McBags gets many emails a day and he tries to answer every one of them with the proper wit, elan, analysis, and Malene Espensen that his readers deserve (except for the ones soliciting money or telling him his penis is too small) and it is a shame that these emails do not reach the larger public because they can be quite prescient at times.  So fuck, below is a recent email Money McBags answered which hopefully will provide you with some content while Money McBags washes off the stink of despair and Fritos he has lingering on him from being around the proletariat today.

From 1/23/11:

Based on the commentary and analysis at the award winning When Genius Prevailed, you are clearly the preeminent investor/soothsayer of all things small cap.  Given that, I thought I would ask for your opinion on what appears to be a strange company that popped up on my screen, Daxor Corporation (DXR).  According to their homepage, they are an innovative medical instrumentation and biotechnology company.  Market cap is $40 mln and (this is where it gets weird) they have about $80 mln in cash, “receivables from broker”, and “available for sale securities.”  As best as I can tell, their medical device company is a front for a hedge fund.  The revenue from the medical device company is $1.7 mln from which they generated an awesome negative $5 mln EBITDA.  However, they paid out $1.35/share in dividends in 2009 as a result of income generated from investments.  In the 9/30/2010 10Q, they discuss shorting stocks, investing in utility companies and Citigroup, and put and call options.  Have you heard of them or performed any type of research on their stock value?  I was initially intrigued by the large discrepancy between the market cap and the cash on hand, but now I’m just curious to learn more about the company.  Thanks for the website.

Money McBags’ repsonse:

Looks like some weird ass shit on DXR.  Money McBags has never heard of them, but there are a lot of things he has never heard of, like Alabama Ice Tea or manners, so that doesn’t really mean anything.  Money McBags did a quick skim of their last release and there was this:

On September 17, 2010, the United States Securities and Exchange Commission (“SEC”) instituted administrative proceedings pursuant to the Investment Company Act of 1940 in an attempt to have Daxor declared an Investment Company. A hearing on the Investment Company issue was originally scheduled for November 8, 2010. A teleconference was held instead and it is now expected that the hearing will be held in the latter part of the First Quarter of 2011.

The Company feels strongly that its history of operations demonstrate that it is primarily an operating medical instrumentation and Biotechnology Company and not primarily an Investment Company. Daxor intends to defend its position before the SEC and if need be, in the courts.

So they appear to be using their status as an operating company for either some kind of tax advantage or just to fuck with people, Money McBags isn’t sure why (though he could dust off his CFA charter and put it to use, but that would require him to unstop his door), but obviously there is something advantageous about keeping up the charade (and Money McBags hates companies that try to skirt the rules).

Money McBags then skimmed their 10Q, just for shits and giggles and found these nuggets (and unfortunately not these nuggets):

“The only person involved in actively managing the Company’s portfolio is Dr. Joseph Feldschuh.  He spends between 25-30% of his time managing the portfolio and is also the Company’s Chief Scientist.  It was disclosed in the Company’s June 30, 2010 10-Q that he has no formal business training and only took one course in economics while in High School. He does not use computer algorithms to make his financial decisions and works with one part time assistant whose responsibility is to update the security positions. “

“To the best of the Company’s knowledge, of the 6,000 companies reporting to the SEC, it is unaware of any company except Daxor where a single individual supports the entire company by cash management, particularly when there are large, continuing operating losses.  The quarter ended September 30, 2010 was the 103 rd consecutive quarter where the fair market value of the Company’s available for sale securities were above historical cost.  If the Company had followed a policy of investing in Treasury Bills and incurred the same level of operating losses, Daxor would have been bankrupt by 2006 or sooner.”

“In the event that Dr. Feldschuh is unable to continue in his role of managing the Company’s investment portfolio, no new option positions would be initiated and Michael Feldschuh, the son of Dr. Joseph Feldschuh would assist in the process of closing the option positions that would be open at the time Dr. Feldschuh is unable to continue in his current capacity. Michael Feldschuh has eighteen years of experience as a hedge fund manager. The Company would then be limited to dividend income from it’s portfolio of available for sale securities. It is highly unlikely that this dividend income would be sufficient to cover the current level of operating losses. The Board of Directors would then determine what appropriate steps should be taken.

So you have an investment fund run by a 74 year old questionable doctor (he got one terrible review on this site, likely because he forgot to warm up his hands) who has no formal investment training (though formal training can be overrated), with a strategy of writing covered calls on utility companies (though why they own C makes no sense, and to be honest, Money McBags thinks C is a $0 so he would stay the fuck away from anyone owning it).  Money McBags is assuming he does this for the lower tax rate dividend income, but he is not 100% sure.

Not only that, but there is basically no volume on the name and this doctor owns ~75% of the shares.  So in short, Money McBags wouldn’t touch this with Peter North’s dick (and he’s not entirely sure what that means).  They have a bull shit business (and when they had a sperm bank business years ago (no joke), it looks like there was some fraudulent activity) and just some old ass doctor with no support picking energy stocks (though the fact that his son runs a hedge fund could mean something else is going on there).  Anyway, the only reason one would invest in this company is if one personally knew the doctor and was confident in his stock picking, otherwise Money McBags would just stay further away from this than he would stay away from Magic Johnson’s saliva.

Interesting find though, hope that helps.

Bottoms Up,

Money McBags

Money McBags should be back with a full column on Wednesday, but in the meantime, keep the emails coming (or just use the fucking comments section) as Money McBags is always happy to interact with his readers (especially if these are his readers).

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