I see fundamental problems with that analogy.
Problem No 1 - Soros' general theory of reflexivity states that sometimes it's not the fundamentals that drive the stock price, but the stock price can drive the fundamentals.
Example: Amazon.com fundamentals in the beginning were terrible...negative earnings, lousy sales, valuation on eyeballs, yadda, yadda. But as people bought Amazon and saw their valuation go up, they alerted other investors who jumped in as well...then Amazon made the news on CNBC...and that news generated publicity which increased Amazon's sales.
Sometimes hype around a stock can do wonders for the fundamentals of that stock.
Conversely, slamming a stock and besmirching its reputation can make it difficult of that company to raise funds and achieve critical mass.
Problem No 2 - there actually is a sure fire strategy at roulette at a Casino that ALWAYS works...it's as old as the hills and it's called doubling down when you lose on a bet on RED. Here's how it works:
Bet $1.
If it's black or 0/00 then double the bet to $2.
If it's red, then take your winnings and you're done, you came out ahead. But if it's black or 0/00 then double your bet again to $4.
Keep doing this...and eventually it will be red again and you come out ahead.
Go ahead and test it in any spreadsheet.
It works.
Except...there's one problem. Most roulette tables have a maximum. So if you happen to reach the maximum as you double the bet...then you're screwed. That's why it doesn't work anymore.
But dilution insurance is a similar strategy...except there's no limit. And it works too. If the company dilutes, then you can anti-dilute by buying more shares at the much lower prices.
But there's a catch. It doesn't work if at some point the share price does not resume an upward course.
All of this was explained and disclosed. Nothing shady or bad moral compassy about it.
Problem No. 3 Unlike Gambling where it's essentially a numbers game i.e. a game of odds...
...stocks are a bit different because it is more about speculation and who is right about guessing at the speculation.
But just because someone guesses right doesn't make that person a genius. It only means they guessed right and maybe a bit better than someone else. But NO ONE owns the market on the future. No one knows future without a time machine.
I like how some like to tout about how right they were...yada yada...but again...no matter how right anyone is or how wrong anyone is...it's speculation on the future...nothing is guaranteed.
And ERHC is a SPECULATIVE stock. It's almost as though some don't understand what the word SPECULATE means. It means you take stabs and educated guesses at the outcome of the stock.
Yes...some people will say that the roulette will yield RED 100 times in a row. And some will be upset that someone says that because they think it's "immoral"...but this self righteous people cannot GUARANTEE that there won't be RED 100 times in a row. It could happen. It's very, very, very, very, very rare for it to happen...but it could.
Just because it doesn't...doesn't make the person who said it can't a genius. Nor does it make them more moral than someone who said it might.
Because...no one knows the future. Period.
Krombacher
