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Author: TMFMillerTime Big red star, 1000 posts Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3179  
Subject: Re: now 'n later Date: 7/6/2007 1:56 PM
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Chuck, glad to have your company... those are some good thoughts on both the posts.

Do you know what my biggest problem with ACUS has become? It's the fact that, and your imply this, you just can't really afford to take a really meaningful position in this stock. When MRK tanked, I could comfortably put 25% of my money in it. With ACUS, no matter how much I study and no matter how much I know... it still boils down to an FDA decision that I cannot predict with certainty (very frustrating).

I do disagree with one of your "bullet points".

On the issue of an efficient market responding so fast to news...
I've said all along that the smart investor should just wait on the sidelines until and if Imagnify is approved. Indeed the stock may double or triple on the day of approval... but there will still be loads of far safer upside to come.

I'm reminded of a recent discussion I had on the Berk board about W Buffett and his incredible move of putting a third of his partnership assets in AXP... and my impression that he made that move straight into the teeth of the salad oil crisis and how ballsy a move that was. I may have slightly misinterpreted that story.

It is likely that the crisis served to focus Buffett on AXP and that he certainly did take his initial position straight into the teeth of the storm... but he did not put 1/3 of his assets in on the first day. The inital bets were likely far less. Then as the liability issues clarified.... then he really dove in. He got the majority of the position before the market at large appreciated the fact that liability was drastically less than it had appeared at first blush.

The same sort of manuver might well apply to ACUS. If Imagnify is approved... after that first big bump in the equity price.. that'll be the time to triple up. There will be loads of upside left as it becomes clear to a skeptical market what the real potential for a perfusion contrast agent is.
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