I began to wonder if anyone lurked :) Positioned in (JOES) under $.50 cents and think perhaps there is potential from current prices.
Sold out of MDIX at .67 with yet another nice gain in less than a week. Wish I had the nerve to stick more into those kind but I learned better than to risk over $20,000 in any otc-bb stock.. Even then, I have to REALLY believe I am within a $1,000 of the bottom. I think if MDIX backs off to the $.50 cent level or less perhaps I would be a buyer of the stock. Potential seems warrant stock value of over $1.00 to $2.00.
I have learned to CUT my losses at about $500, SELL chalk it up as trading overhead, works pretty darn well :)
I try to rate stocks based on how I personally see them. Could not anymore explain that statement than I can flap my arms and fly, except to give examples. In doing that, I would rate 5 stocks as
those examples:
#1. (FONR), in my view, the one with the most potential for upside gain of 500% to perhaps much more from current price, yet with the one with the least risk. Owning enough of this stock allows for TWO positions, A TRADING position & a CORE position. With plenty of confidence and expectations for both.
#2. (MSN), in my view, a stock with good potential for upside gain also of 500% from 9/16 price and also with moderate risk.
#3. (PRCY), Currently a small cap, now otc-bb, moderate potential of a double or more from the $.50 level with light risk.
#4. (JOES), I see potential for a double or more but because of being an otc-bb stock and the price near the 52 week low, I personally rate it a good trading stock with medium risk.
#5. (MDIX), potential seems to be in place for a high flyer from the $.50 range and because the stock has a good following, trading very good daily volume. However this is an otc-bb which is not even close to it's 52 week low and appears to hit a wall at the $.75 level, I consider a HIGH risk,excellent trading stock.
I would LOVE to be financially able to diversify with a few shares of each one of Bill Mathews (The CHEAP Investor) Recommendations but that is hard unless you trade a lot which I am doing.
AINN had a very nice move since The CHEAP Investor June 99 recommendation @ $3.62, hitting $5.75; NSSC shot from $2.88 to $4; DEXT moved slightly from the rec. buy @ $1.62 and could have been purchased a little lower @ $1.56; JOES drifted down from the rec. price of .56 to .43 Bid, found support and showing signs of recovery. I didn't have any more cash or I would likely be hung in JOES, as it turned out I was able to take a position in JOES @ .46
I have this formula for diversifying in Bill Mathews recommendations, which is geared strictly according to the price of the stocks. My reasoning is simple, I am confident enough in Bill's ability based on past performance, that I just look at price and use this formula, which is;If a stock is priced near $5, I'll take on 1,000 shares; priced under $5 down to $3 = 2,000 shares; Priced under $3 = 2,000 to 5,000; Priced under $2= 5,000 shares; Under $1.00 = 5,000 to 10,000 and priced under $.50= 10,000 to perhaps as much as 40,000 shares.
If an investor had purchased according to the formula above on just those 4 stocks from the June 1999 recommendations and used $26,422.50 as the buying power amount, here is how you would currently stand EVEN if you had not traded one single share.
AINN= 2,000 @ $3.63, currently up 29.13%
NSSC= 2,000 @ $2.88, currently up 34.78%
DEXT= 5,000 @ $ 1.63, currently ___even
JOES=10,000 @ $.44, down 21.43%
Total Gain 12.21% or $3,227.50 profit
Now! IF, I said IF GREED was left out while applying that $500 loss & then jump out, I call it TRADING OVERHEAD just like any business has overhead. Then all one need do to see if this strategy works is program in a portfolio with the formula of shares according to price of stocks and just SEE. I don't know how this would pan out with other recommendations BUT using The CHEAP Investor's recommendations I KNOW exactly the percentage of gain at any time. Of course is not taking into account that I would TRADE the swings which would only enhance those gains.
Trading those swings in the 4 rec. from the June issue would not have changed the above % gain very much BUT in many cases I know it would have made a HUGE difference. One good example of that would be VXTK rec. at $1.34 on the Hot Line at the end of 1998 and within weeks VXTK
shot to $6.50, backed off to $2.75, right back up to $4 and now trades at $3.62. BUT YOU GOT TO TRADE and learn how to SELL on the STALL before the FALL.
I write this stuff to try and help some who may be right where I was only a few years ago and also to keep my own strategy honed in order to avoid getting caught up in that old GREED FEAR TRAP.
My way is by no means THE ONLY way but this old owl would have to have some powerful proof and a long time watching to cause me to change my thinking. As they say "the proof is in the pudding" and
pudding is a LOT richer than when I started.
For any passing this way or perhaps directed here by others, you may choose to call
(847) 697-5666 and ask for a FREE copy of The CHEAP Investor.
Regards,
Malcolm
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