let us not use an overwide brush here ... my favorite delusions happen to be for the most part canehjun speckies -g- ....
Ooops ! I had a feeling I had this coming from the neighbors of the Great White North.
While I would acknowledge that there has been some issues that have paid off, the general expectation is you have a higher chance than 90% you will lose.
Why I don't like the pennies ? Here is why:
1. The relationship between risk and reward is completely off the charts, against the case of the speculator.
Investing is inherently risky:
1.1 you have "Market Risk" (it applies to all issues)
1.2 "Stock specific risk" (those risks that apply to the specific stock you are analyzing).
1.3 In addition, (in the case of the Canadian (or any other foreign issue ~vs~ the US Dollar), you have currency risk (against devaluation).
1.4 Lack of liquidity, if the market dries up... forget it you are "gestÜck".
1.5 There is NO OPTIONS --a very important aspect of true speculating, even investing--.
1.6 There is no margin on these monsters therefore, it is all your cash. Margin is not necessarily evil; if you know how to use debt, then it yet is another tool to use. Be careful with margin, as much as it can help you, it can kill you just the same, use it sparingly and only in the golden opportunities that arise here and there.
2. Intense management: It is impossible to "invest" in any bb/penny. Why ?
Because it is not investing, it is SPECULATING.
This needs far too much attention, as you correctly indicated, these issues are for traders. Trading and investing are two different things.
In the best of scenarios, as a trader, you have to be well equipped both in the hardware dept. and in the software dept. (not to mention in the brain dept.) --MOST penny players are not even close to be in a position to invest properly, let alone be traders.
3. Speculating in these markets is foolish because:
3.1 the insiders have gotten the stock at FAR cheaper prices than your average investor has, even if you participated in private placements. --Watch out for warrants, they are killers when the stock tries to move up --tradable stock that become tradable after executing on some warrants is like a tsunami wave of sellers --guess who is buying ?
A = The delusional "investor".
3.2 then you have to fight the spreads of the market makers, slippage, and trading commissions costs
3.3 as far as the SEC or the equivalent of the Canadian authorities, it is an illusion... the best example has been the well publicized Mafia participation in the latest cases, besides, the SEC does not have the necessary fire power to fight all these sharpies eating bozo-investors. It takes too long to do the investigations, and rarely do the investor-bozos get their money back.
It is a feeding frenzy for securities and trial lawyers.
3.4 then you have section "whatever, whatever..." (sorry I forgot the number of the section, it has been a long time since I looked at one of these fleas). Anyway, through these sections, and if it is done right, there can be thousands of shares sold off-shore, outside of the jurisdiction of the sec. In this particular point I acknowledge my knowledge to be rusty since I don't do these fleas anymore.
I participated in four fleas 3 were winners and 1 was a loser, in balance I came out even, except I learned a lot, and so in the end for me it was a positive, but I would not wish it to anybody. --Unless of course to idiots like the ones who have visited recently.
Then again, when I think that there are people out there, completely convinced there are fiery hellish devils complete with horns and tails, convincing them of "the wisdom of investing" in the penny stock markets, seems perfectly logical.
Part of the experience was that I became convinced of the delusional character of the average penny stock player, a true trek in the brain of the citizens of moronia.
If you don't believe me, check out a couple of threads right here on SI:
The original one and only Circus of the Absurd, the FTELIANS (FTEL and then FCM) quite a story, and a place where I had a lot of fun making more than 90 % of the thread mad as hell --a trip! I did very well in this one.
George Papadopulos can testify of the certifiable behavior of some of the FTELIANS. *g*
Then check out DGIV, these guys were far more delusional than the FTELIANS, but here I was a true trader, and in 2 small transactions I made out like a bandit. I did not stay to find out more about these wackos since profit was the motive.
I also participated a couple of times in a Canadian co. Intrynsic (ICS.v) I did ok and I believe the company seems to be making progress, but I no longer follow it.
Then there is the AMAZOMBIES of Amazon Natural **another collection of zombie-investors**, amazombical thread. Hysteria and delusion was a prerequisite to invest in that company (no, I never invested in that one, I arrived too late for the rush).
The one loser I had was prior to my induction in the hall of the psychotics: Silicon Investor, so there is no history there to see. To my [questionable] credit, I was "seduced" into investing in that POS, by someone I knew well --but so what, in the end it was my decision and I screwed up.
Care to put your delusion up against my delusion? -g-
Not that I am trying to run away from a challenge, but in I am a very conservative investor/speculator. What I do these days is I place funds in blue chip tech companies, such as EMC, MSFT, CSCO, TER, ORCL, SUNW, INTC, then others a little more risky, such as HGSI, JDSU, NXTL, and the like....
Then... I play options but not from the buy side, rather from the sell side... heee hee heee ---> I like receiving the premiums.
Usually, I sell covered calls, next month contracts at strike prices 5 to 10 points above my entry level, it depends on the premium size, just check out some of the premiums on HGSI, JDSU, ORCL SUNW EMC and the like. Then I milk them to death...
Here is a good thread where I lurk: (Very knowledgeable guys there).
Subject 12574
When I get cocky (not often), I go naked, (sell the call without owning the underlying) --this can kill you in minutes, so I do not do this often. If we would put in religious terms, *g* it is the equivalent of the fear of god, and believe me there is a real hell if you make a mistake on a naked call. --So don't try it if you are not knowledgeable of all what is at play. Test it first.
Another way that I have play this (only when I really like the company, I sell naked puts. For this, you receive a premium. If the stock goes up, then you get the premium on expiration, and that is the end of the story. If however, the stock goes down, then you are obligated to buy the stock at the strike price, at expiration. Your cost is mitigated by the premium received. OTOH... if the stock under the sold naked put collapses, then you will get hurt, since you will have to buy it at the agreed strike price.
There is no risk free investment/speculating.
So for now I pass... since I do not have a "particular favorite", my sluts are those mentioned above and then I try to "pimp the hell out of them" by using the options, primarily, covered calls. Yes, they do call away the stock some times, but... if I like them I buy them back, the key here is the premium received, along with the diversified quality of the portfolio.
To determine entry points (and sometimes not to re-enter the stock if they call it away), I use a combination of:
Fundamental analysis is the primary filter. That defines the field where I will be playing.
Then I use: Bollinger bands, MACD, 50 day moving average, +DMI/-DMI and ADX and lastly RSI. all these on Candlestick charts.
I congratulate you in your achievements in the bb-fleas market, a courageous task at best ! I hope you continue to do well.
It has worked like a charm in the last 2 years. --Very happy, I guess this is what affords me to enter this circus and fight the evil ones HEHEHEHEHEHEHE.
By the way, and I don't mean to "rub" but...
Como esta el oro ? ha sido para los loros o no ?
jajajajajajaja....... <just joking.>
Oil has done well though... no ?
As you know, my opinion on gold is anti-Randian: It is the currency of the barbarians and medieval societies, today, technology, information, (and the ability to spread it quickly over a broad market), and an ever expanding base of free market, makes using gold an impractical. In addition, the central bankers have decided to collect leasing fees on their hordes of gold and so on... Not a friendly scenario in my eyes.
Notice to the gold bugs: I believe you are sincere in your belief of the needed "discipline from politicians and their use of fiat money.. blah, blah, blah....
Industry and commerce will advance in spite of those parrots, regardless of how idiotic they become, the free market has won, and from here on it will dictate many things, amongst those, I believe that it will determine that the price of gold will remain as a speculative commodity and as an industrial use raw material. NOT as a heaven of safety against inflation and war. But I know that you know best, I believe you ...(not) heeee heeee heee.
To the gold bugs at large : I will not try to convince you at all. Please do te same.
As for Elian and Capitalism, I hope that by the time Elian is a teenager Castro is only a historical memory. I do believe it will happen but it will be a rather slow process.
Anyway... good luck with the fleas --I mean it.
[edit] I liked your chart page, the one with the black background (I use Metastock and it is great). By the way that chart looks god, to bad it is only a penny. *g* |
