Thursday, December 18, 2008

Stock Treasure at the Bottom of the Ocean?

As a very special parting shot from the ice storm of last Friday, two of my heating system water pipes broke and the heat was lost for the second floor of the house yesterday! I was able to get a crew in yesterday and those guys worked all day and most of today to fix the problem. Excellent service and they were real professionals. Hopefully that will be all for the drama department until the new year, but you never know!

Stock Treasure at the Bottom of the Ocean?
A while back I had mentioned a book I read called "Lost Gold of the Republic" by Priit J. Vesilind. The novel chronicles the search for and eventual recovery of the SS Republic, a steamship that was carrying a large shipment of gold and silver coins. This money was destined for the city of New Orleans after the Civil War to act as aid in reconstruction. The ship was lost off the coast of Georgia in a hurricane. The novel is great as it details not only the search for a long lost ship and all that entails, but it also sketches out the experience of many people that were on that fateful voyage.

Economic Disconnect focuses on the macro picture for the most part. I feel that if you have the tide figured correctly, finding stocks to buy is easier. I hardly ever disclose personal trades or ideas on particular stocks. I will this time so you can see how I think in a more short term sense.

The company I took a position in is called Odyssey Marine Expeditions, Inc (OMEX). This firm is the company that found the SS Republic, and has located many other ships that may harbor valued salvage. If you read the book you can appreciate just how good these guys are. The stock itself trades at about $3 today, and shows a market cap of $158 million. The stock trades pretty thin with average volume of 242k shares daily. (All data from Yahoo Finance Ticker report)

As I see it, OMEX is a lottery ticket. The stock is one lawsuit gone wrong on a claim from going to zero. Ships that are located may have nothing recoverable. They could run out of money in short order. This stock is a speculative play at best. If you are still interested, read on.

OMEX does what many of us can only dream about. Bringing up gold and silver from long lost ships can only be termed "wild". The science behind their search methods and the methodical nature of their work is impressive. Those criteria make the stock interesting to me. As a catalyst for me to buy though, I look to this headline from December 11th:
Press Release Source: Discovery Channel
TREASURE QUEST Captures Thrill of High-Stakes Hunt for the Ocean's Greatest Lost Treasures
Thursday December 11, 4:39 pm ET
- World Premiere 11-Part Series Kicks Off Thursday, January 15 at 10PM ET/PT
SILVER SPRING, Md., Dec. 11 /PRNewswire/ -- TREASURE QUEST takes the meaning of "cold case" to a new level - it's not always what you find, but what you find out. Discovery Channel and Odyssey Marine Exploration (OMEX), the world's only publicly-traded company dedicated to deep ocean shipwreck exploration, plunges viewers to the ocean floor as they track the unsolved mysteries of the deep sea in this 11-part world premiere series. The nonstop race against time, secret locations and international intrigue will make the viewer's pulse race and remind them of their childhood fantasies. For the Odyssey crew and the Discovery Channel production team, it is a dream job -- but not one without its major challenges. TREASURE QUEST premieres Thursdays at 10PM ET/PT, beginning January 15, 2009.

So here we will have an eleven episode show on Discovery channel that shows the company in action. While Discovery Channel is not a major network, the channel does have high viewership and it is certainly the kind of inquisitive minds like mine. This kind of coverage will surely engender some interest.

I couple the show exposure with a thinly traded stock, and I see an opportunity to make a short term move. Like I said, at this point OMEX is more a lottery ticket as there are just too many unknowns. But if you are looking for a short term play that has some imagination, this stock jumped out at me. As I said and with full disclosure I now own a position in OMEX.

Automatic Earth Article
I read a great piece today on the blog The Automatic Earth (hat tip Some Assembly Required blog). The writer named Ilargi hits the nail dead on the head many times. I recommend the full read here.
Excerpt:
Yesterday’s rate cut by Bernanke's Fed is the clearest -though by no means the first- signal that the entire gamut of political action has run its course, and it hasn't helped one bit. The answer: double or nothing. When one idea fails, 3 of the same ideas will surely solve the issue. They are gambling with other people's money, and that is always easy. It’s your money though, and the chances of winning are miniscule. They just don’t know what else to do. Every politician is a mini-Bernie Madoff. Addicted to power, fame, money and attention. The combined stakes we see today are at least a 1000 bigger than Madoff's paltry $50 billion.

But this is not the only way to approach the failed system. They could simply let the failed banks fail. You don't, as they like to make you believe, need those banks. You need access to your money. Your government can give you that. Instead, it tries to use your money to save banks you don't need. And those banks are so deep in debt that I can guarantee you all of your money will be lost, and the banks will still in the end go under. How to solve this? For one, expose all the losing assets in the banks. Let the ones who have too many bad assets die.

The whole thing is a great read.

Have a good night.

10 comments:

Anonymous said...

GYSC

Don't know why but what you wrote made this pop in my mind.

Eric Burdon & The Animals - When I Was Young (1967)
http://www.youtube.com/watch?v=Ryeqvr_qCfY

Kevin

Anonymous said...

Funny thought....

OMEX

just add a C and you have another interesting risk...

G

PS: I will be posting a substantial finding on the current state of affairs in FL. -- the good, bad and the ugly

getyourselfconnected said...

G,
hilarious! COMEX busting is still on watch. Did you get the job from last week?
Kevin,
That song may be the saddest song I have ever heard! Don't scare me!

Anonymous said...

GYSC

OMEX is a young mans stock, Us older fellers don't have that kind of risk tolerance anymore. If I want to gamble I go to Vegas. I hope they find gold by the way.

I don't know if I find that song that sad, my life is set up on the Me INC principal. 75/3, 25 years for learning, 25 years for earning, and 25 years for living off of what you learned and you earned. I'm in the last third of that equation. You are in the second therefore your risk tolerance is higher and you are still earning.

Kevin

Anonymous said...

Looks like the Prez just told everyone TARP $ will be going to the automakers. (0900hrs Friday)

Troubled Assets Relief Program...

Well I can see how it gets confusing with all these acronyms.

I could also see it as:

Troubled Automotive Relief Program

or

Troubled Agriculture Relief Program

etc ... etc...

G

PS: Maybe we should just do a countdown until the new admin takes office. All bets are off until that occurs.

Anonymous said...

Keep an eye on this one. Don't know what Gross is up to but these guys are running out of time.

Pimco snubs GMAC debt offer; bank bid may fail-WSJ
http://www.reuters.com/article/bondsNews/idUSBNG40247620081219

Kevin

watchtower said...

I know submissions for "Friday Night Rock Blogging" were not asked for but I heard Cheap Trick's "Surrender" a couple of days ago and I couldn't believe how much I enjoyed that song (hadn't heard it in a LONG time).

I would like to request it if not too much trouble.

watchtower said...

I know submissions for "Friday Night Rock Blogging" were not asked for but I heard Cheap Trick's "Surrender" a couple of days ago and I couldn't believe how much I enjoyed that song (hadn't heard it in a LONG time).

I would like to request it if not too much trouble.

watchtower said...

oops.

Sir Max Higgins said...

Bank of America and Mr. Higgins missing $millions, it can happen to you my, fellows Americans


More info at: http://maxhiggins.com/blog/