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Re: the big guy post# 114629

Saturday, 06/18/2011 4:34:19 PM

Saturday, June 18, 2011 4:34:19 PM

Post# of 312102
I think you are really wrong on JBII. Most technology startups are nowhere near this close to massive success. Let me summarize:

Tech startup companies fall into two basic categories.

The first category are companies producing a revolutionary product that has no current market and they generally need to spend significant money on marketing. This is a very risky endeavor because the product may not catch on due to lack of interest or insufficient/poor marketing.

The second category is companies that are producing a product that other companies (usually much larger) are also going to produce. In this case they perhaps have a better mousetrap but have formidable competition. It is very difficult to beat companies with greater resources.

JBII fits into neither of these categories as they are producing a valuable commodity product that nobody else can produce with these kind of margins. They have virtually unlimited free feedstock to enable them to create fuel with massive margins. Their marketing costs for fuel are very low relative to most startups.

Also, the products produced by technology startups often have problems with obsolescence which is highly unlikely for JBII.

JBII is a simple investment thesis:
1. They are getting feedstock for free and can produce at massive GM that likely will ultimately be greater than 90%.
2. Their machines are very inexpensive thus their overall operating margins are very high. Likely these operating margins will ultimately be much higher than 50%.
3. They are producing a product that already has very high demand.
4. As far as we know, nobody else has been able to do this with these outstanding economics despite many people trying very hard for years.
5. It is relatively easy for them to scale their business enabling massive profits.
6. JBII has overcome many big hurdles (permitting, mass production of product, and initial sales). To a great extent, their future success is just a function of their execution.

In short, JBII IMO has very high odds of success.

Mike

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