The result of all this homespun activity is Bankruptcy Values, one of the quirkiest institutional newsletters in the burgeoning field of bankruptcy investing.
Let others on Wall Street huff and puff over the prospect of investing in well-worn bankruptcies like Continental Holdings or Revco. As editor and publisher of Bankruptcy Values, Mr. Boland travels off the beaten path, seeking old-fashioned bargains among the most obscure veterans of Chapter 11. "I take a rigid value approach," he said, after hushing the cats and fielding the phone. "In fact, the popularity of a situation is a sure sign to me that it's getting dangerous."
And those signs are proliferating sharply these days, Mr. Boland warns, as more Wall Street players flock to the distressed securities game. "The business is attracting a lot of people whose very presence is lowering the returns. This business is a seesaw, and we are in a terrible swing downward right now."
Some of the companies Mr. Boland follows, while hardly household names, have had spectacular recoveries after leaving Chapter 11. He was an early investor in the various securities of the Todd Shipyards Corporation, which filed for bankruptcy protection in August 1987 and emerged on January 22 in reorganized form. As the company cleared the courthouse door, Mr. Boland continued to recommend its stock, which was trading around $4 a share. But the shares have traded as high as $5.875 in recent weeks, and Mr. Boland said last week that he now thinks they are a trifle expensive. "I wouldn't be an aggressive buyer here, unless I knew something was up," he said. "And I don't."
There have been duds in Mr. Boland's portfolio, too, companies that went from obscurity to oblivion. "This is a business where there is so much risk in everything you do that you have to be prepared to look like a fool for a long time before something works," he said. "And sometimes, you just stop and try something else."
In some ways, that is how Mr. Boland came to be producing Bankruptcy Values. An editor at the Baltimore Sun and then a senior editor at Barron's, he struck off on his own in 1983. First came a book on Wall Street personalities, and then his first newsletter, Value Investing in Special Situations. Through it all, he managed to work primarily from his attic office in the narrow brick townhouse he bought nearly 20 years ago in Baltimore's Fells Point section.
After the 1987 crash, Mr. Boland scrapped his first newsletter and focused on Bankruptcy Values. But his latest picks have already left bankruptcy behind. That's where the values are, he said.
Unfortunately, many of his favorites are low-priced and volatile stocks that trade infrequently and are largely ignored by analysts. Acknowledging those risks, Mr. Boland insists on an extremely diverse portfolio and does a lot of first-hand, albeit reluctant, research. He shuddered as he described a trip through the Nevada sandscape to check out the Mego Corporation, a recent pick.
But the trip confirmed that Mego, the successor to a bankrupt toy manufacturer, is "a real company, with real assets and real earnings." And real glitter, too: Mego's chairman and one of its large shareholders is Robert Nederlander of the Nederlander Group, whose investments include a big chunk of the Great White Way and the New York Yankees. Another big investor and board member is Wilbur L. Ross of Rothschild Inc., one of the best-known creditor negotiators in the bankruptcy game. With the company's share price roughly equal to its earnings, and considerably lower than book value, Mr. Boland has been buying the stock and advising clients to do likewise.
Mr. Boland is also recommending a casino company, the Elsinore Corporation, whose tattered past includes ownership of the failed Atlantis casino in Atlantic City. The company's chief asset now is the dowdy Four Queens casino in Las Vegas, but Mr. Boland thinks aggressive management could spruce up the share price considerably.
That happy prospect seemed likely last year when Elsinore caught the eye of Harold Goldsmith, the co-founder of Merry-Go-Round Enterprises, the retail clothing chain. After acquiring nearly 20 percent of Elsinore, Mr. Goldsmith announced in January that he planned to seek control. But on February 13, he was killed in the crash of a chartered jet approaching the Aspen, Colorado, airport.
That tragedy raises a host of uncertainties for Elsinore, Mr. Boland said. "The main question now is where his Elsinore shares will go." He added: "In aggressive hands, it could be positive. And the stock is very cheap on a cash-flow basis, so I'll stay with it and wait for a spark. But there aren't many Harold Goldsmiths around."
The management factor also figures in Mr. Boland's view of the Texscan Corporation of El Paso, a cable television equipment manufacturer. Mr. Boland recommended the stock last summer but grew cautious last month when William H. Lambert, the company's chairman, proposed a management buyout. No price has been disclosed, he noted, although the company's shares have climbed to nearly $8, from around $6. "It's an arbitrager's business from $8 on," he said. "I've been a seller at these prices."
Mr. Boland doesn't spend all his time poring through corporate casualty lists. He travels with his wife, Mira; to his astonishment, he loved Paris, he says. He fusses with the lawyer next door over the backyard landscaping. And somehow, between bankruptcies, he finds time to write mystery novels. His latest, due out soon from St. Martin's Press, is set on Wall Street but is obviously not autobiographical: it is called Easy Money.
Ethan Cross, one of those rare fellows who finds time both to write novels and to donate his skills to the International Thriller Writers Association, interviewed me in the late fall of 2011 in connection with the publication of my book Hominid. Here is a slightly shortened text, from the ITW's on-line publication The Big Thrill.______________
Publishers Weekly stated that author John C. Boland “excels in rendering epiphanies.” And his new novel, Hominid, is no exception as it explores evolution, genetics, archaeology, and a centuries-old mystery. I recently had an opportunity to interview the author. Ethan Cross: Many of your past books have been mysteries. How would you classify Hominid? Mystery, thriller, scientific thriller, etc.?
John Boland: Hominid is a science thriller that develops as a series of mysteries: what happened among early colonists on Ewell Island? why were three of them buried in lead-shrouded coffins? why were a four-year-old child and her father murdered? why is the mother’s coffin empty? who is sponsoring the island excavation and why? The big question comes a bit later, and it concerns deviations in the child’s DNA from the normal human genome.
E.C.: Is Hominid entirely fictional or is it based upon actual local lore and legend?
J.B.: It’s fiction with many factual reference points—starting with the discovery in St. Marys City, Maryland, twenty years ago of three lead coffins buried in a church dating from the 1660s. The use of lead coffins wasn’t uncommon in England, but it taxed the resources of an early American colony. So the reality was fascinating. I shifted the location to a nearby island, where St. Marys dissidents in fact had settled, and created the “local lore” that the buried family were viewed in 1700 as “devils.”
E.C.: Where does “science faction” end and “science fiction” begin within the novel?
J.B.: Publishers Weekly called the novel “science fiction,” but I don’t regard it as such. The science is well-grounded. The key speculation is fictional, but it’s also consistent with what we know about Darwinian evolution. The pressure on scientific research by government is also factual—as is the misuse of science by government and other institutions, witness the eugenics movement in the United States that led to forced sterilizations. So there’s a very dangerous mix of competing interests and beliefs.
E.C.: Hominid deals with the discovery of a new humanoid species through the unearthing of some colonial-era cadavers. Is the book focused upon the mystery of what happened in the past or are there current dangers that arise because of the discovery?
J.B.: The dangers appear in the first chapter, when a young archaeologist is killed in the deep excavation and the main character almost loses his life. The role of the past is to provide evidence of what has been happening for perhaps millennia, unseen and unsuspected: the development of a human variant that threatens to supplant us. This raises the philosophical and moral question: Threatened by extinction, would we stand aside and let evolution take its course? Or would Homo sapiens sapiens launch an extermination campaign against the newcomer?
E.C.: What kind of research did you do for your new book?
J.B.: The research was fun. I visited genetic testing labs. In New York, I toured Cold Spring Harbor Laboratory. I read dozens of books on evolution and speciation. The challenge was to keep the research out of the novel—the idea was to tell a good story that wasn’t inconsistent with what is known. There is a reading list at the back of the book in case anyone is interested in this fast-moving branch of science.
E.C.: Was there anything particularly interesting that you discovered during your research that didn’t make it into the novel or something that you’d like to highlight?
J.B.: The key thing made it in, and I’m intrigued by it. That is, how plausible the idea is of a human mutation developing within an island population, and secondly how rapidly evolution occurs under strong selection. There’s a fellow at the University of Chicago whose work suggests that one very useful gene, the “lactase” gene that permits adults to metabolize milk, has penetrated most of the European population in about seven thousand years. I speeded things up for the novel, but I wonder by how much? We had a tiny hominid cousin, Homo floresiensis, living in Indonesia as recently as thirteen thousand years ago. I’d better add right now that Hominid isn’t a treatise on evolution: it’s a thriller, full of immediate conflict, a love story, and a lot of mayhem.
E.C.: What are you reading now? What are some of your favorite books/authors and who has had the greatest influence upon your own work?
J.B.: Right now, in truth, for some reason I’m reading the old Perry Masons. They’re almost straightforward “story.” I can picture Della Street from the TV series, but Gardner sure doesn’t tell us what she looks like. I liked the early Dick Francis novels a great deal, probably for bad reasons: there was quite a dollop of sadism in them, but the hero always pushed ahead, and the romantic subplots appealed to me, especially in Nerve. I loved some of Geoffrey Household’s thrillers: The Courtesy of Death (which also has an archaeological aspect) and Dance of the Dwarfs. Intelligent, elegantly written thrillers. Among contemporary writers, I admire John Sandford and Lee Child, both of whom produce smooth, fast-moving prose. On the science front, I’m reading a superb book by Richard Dawkins, The Greatest Show on Earth, which should be part of every high school science curriculum.
E.C.: What’s something that you’ve learned about the publishing business that you weren’t expecting?
J.B.: That sixty or more literary agents can decline to represent a novel that gets a starred review in Publishers Weekly.
E.C.: Do you have any advice for aspiring (or struggling) writers out there?
J.B.: They should read the answer to the preceding question. It cuts two ways. And for heaven’s sake, develop a good income outside this field.
E.C.: Are you currently working on a new book? Can we get a sneak peek?
J.B.: I spend a fair amount of time writing short stories for Alfred Hitchcock’s Mystery Magazine. One novel I’m tinkering with is altogether different from Hominid. It’s called The Man Who Knew Brecht, has an artist heroine, and deals with murder growing out of old far-left political activity. (And apropos the previous question: if you want to self-sabotage a writing career, write novels that explore widely different themes and settings. I’ve found this works very well.)
George Ebey took time out from his other work to interview me on the publication of my pseudonymous novel Death in Budapest. The interview appeared in the International Thriller Writers' online bulletin on January 31, 2012.
George Ebey [quoting Publishers Weekly]: "When Wall Street banker Patrick McCarry’s firm makes him the scapegoat after a hedge fund disaster, he manages to find a new position in London running a small investment business. Assigned to handle Chester Holt, an American looking to open a factory making engines in Hungary, McCarry learns on arriving in Budapest that his new client is actually in the arms business. Members of the American intelligence community fear Holt may be pouring fuel on the continually combustible Balkans, sending McCarry down a dangerous path with twists straight out of a John le Carré novel."
I recently caught up with author James Ross to talk about his new espionage thriller, Death in Buapest.
What motivated you to set your story in the Balkans? Does this region hold a specific interest for you?
James L. Ross: I visited Budapest with two other journalists and had the comical pleasure of being accused on Hungarian TV of being “from Langley.” It was too absurd, and too much fun, not to work into a novel at some point. My accuser has a cameo as Folkestone or something like that. In fact he was a British newspaperman named Ecclestone. There are other bits of low-level reality in the book. The basement strip club, Dolce Vita, was much as described. The paranoia of the country reflects reality as closely as I could understand it. The nationalism seems pervasive. The economic disorder that serves as a backdrop to the novel is progressing nicely. Unlike my hero, I wasn’t shot at, and the only bureaucrats I met behaved themselves.
G.E.: The narrator of your story is described as having a sardonic wit. Can you talk a little about the virtues and challenges of molding humor into a thriller story?
J.L.R.: That’s a good question. I don’t think there’s much room in a serious novel for humor, even of the dry or sardonic sort. If I used it in a serious book, I would assign it to a character who is trying to evade some sort of reality, the drunken fool who hopes loud laughter will cover something up. Death in Budapest is meant as light entertainment. I tried to anchor it in the real world, but it’s for fun. My first model was Adam Hall, who wrote the high-speed Quiller novels. I wanted to see if I could propel a story fast enough that the reader would be well into a new chapter before understanding what had happened at the end of the previous one. So there are a lot of very fast cuts. The other model was a series of romps that Victor Canning wrote. I’ve forgotten his hero’s name, but he appeared in light thrillers such as The Melting Man. Dry, bitter humor can work in either of those type stories. And I also wanted the book to be very cold-blooded. The downside of that–you didn’t ask but I’ll say it–is that the rewards for the reader are limited. There’s no warm-fuzzy sense of justice done or any other value achieved.
Maybe I should back up to the issues of wit or humor. They’re different things, you know. There’s no humor–at least none intentional–in Death in Budapest. A couple of my books have been described as acerbic. That’s probably a good word here. My novel Long Pig, from 2011, which managed to avoid being reviewed, was acerbic in its depictions of movieland and politics, but the spirit was deliberately mean and nasty. It has one of my favorite character epiphanies, when the hero concludes that if he can’t help anyone, at least he can fuck someone up once in a while. In Death in Budapest, there’s something of that attitude when McCarry decides that “a [hypodermic] needle and soft music” are the usual treatment he can expect from the intelligence clowns on the scene. He doesn’t get the soft music.
G.E.: You’ve written numerous stories for Alfred Hitchcock, Ellery Queen, and others. Did you start off writing stories such as these before making the leap to full-length novels?
J.L.R.: Well, other writers have leapt. I move at an invalid’s pace. My first story appeared in Hitchcock’s in 1976. My first novel was published in 1991. So you see, no natural talent here just waiting to erupt.
G.E.: When Death in Budapest hits the shelves, what’s the best compliment you could hope to receive?
J.L.R.: Kirkus gave it to me in 1994, when they said Death in Jerusalem "roars along like a BMW in heat.” The Publishers Weekly review of Budapest was heartening, and possibly generous.
G.E.: Publishers Weekly said, “Fans of hard-edged spy novels will hope that this outing for disgraced Wall Street banker Patrick McCarry is but the first of many from Ross.” Is this outing the first of many?
J.L.R.: Probably not. I don’t know how other writers can produce essentially the same story–or at least the same type story–in book after book. It’s absolutely necessary for branding, I know. But it would bore me. When I was eighteen, I spent a few months watching guys do piece work stamping out molds in an iron foundry. Why do that with a word processor?
He’s got a scriptwriter lady friend who’s twenty years younger than him. He knows he’s an anachronism, knows all his points of reference are out of date, takes small comfort in the scriptwriter’s occasional reference to him as “Studkins”—suspecting she’s joking. This is the kind of character I like, because I’ve known people a little like him: over the hill, doubting that the past meant much. Hayes knows he can’t reform the Washington system. He knows he bought into a lot of b.s. as an army helicopter pilot. He had an epiphany in prison that his old beliefs were like water going down the shower stall drain. So then the complication: a political fixer back in D.C. thinks Hayes is leaking a damaging story about the war-hero President. Since it’s a story Hayes may have picked up from a gay sergeant who served with the President in Vietnam, this could be a little worse than a Swiftboat tale. The sergeant is conveniently deceased. Now the political fixer sets out to shut Hayes up.
What I liked to imagine was: How would a guy like Hayes, at this stage in his life, deal with people who believe he’s a pushover? I knew a guy more than twenty years ago who had been at the U.S. compound during Tet, and some of his background made its way into Hayes’s. Hollywood and D.C. people might be a little recognizable. I didn’t want to write a roman a clef, but I like stories that have at least shallow roots in things I’ve known so they have life beyond the immediate needs of the plot.
The original story had neither Marley nor espionage. Entitled “Just Like That,” it imagines a man at a California resort meeting by chance a woman he had known decades earlier. (Marley does this, too, but not by chance.) “Just Like That” has no real plot. Its focal character lingers in a poolside chair long after dusk, when the air is cooling, and resists a suggestion he go inside because he fears that if he acknowledges the passage of the day the next thirty years’ worth of days will flit by “just like that”—as it seems the previous decades’ worth have done. It was an exercise in melancholy but not a well-built story.
I’ve done this many times. “Killing Morris Gimple,” from the June 2014 Hitchcock’s, drew its title character from a non-mystery called “I’m Not Enjoying This.” Here the seams may show, as the viewpoint shifts back and forth between Morris and the young female detective who is protecting him. (Readers are entitled sometimes to hate writers.) In “Out of Her Depth” (AHMM, December 2009), several pages of a novel that never got far provided the opening, in the third person, for a private-eye story told in the first person. (The first-person pages got written straight-through, just like one is supposed to do.) In “Marley’s Havana” (AHMM, March 2011), the opening scene at a Cuban nightclub was adapted from yet another novel fragment.
A reader, already muttering, might ask “Why?” There are usually two reasons. One, if there’s a theme I like, sometimes it’s possible to lift it from a form that hasn’t worked into the more structured form of a mystery story. Two, and more common, I often want to give a second chance to some fragment of remembered reality: an afternoon at a desert resort, several grumpy days on a Gulf Coast beach, an evening at a nightclub in Havana.
I don’t get much chance to talk to other writers. So I haven’t compared methods. But I wonder how many sausage-makers are out there.