"Why Buy Now?"
July comes to an end. Another disappointing month for the OTCBB. Just a
few months ago there seemed to be an endless wave of energy that flowed
into OTC stocks. Many investors have become more cautious, considering
numerous aspects of a company's business before deciding to invest their
money with them; others have been scared off from the market altogether.
Many are waiting on the sidelines, hoping to jump back in at just the
right time.
Meanwhile, the summer doldrums continue and show no sign of a near-term
end. August has historically been a month of low volume, another factor
that may be holding back investors from buying. Every day companies
continue to set new 52-week lows, endlessly traveling through a downward
spiral. Investors in such companies become frustrated and worried,
leading many to decide to "get out while they still can."
Then there are those who travel the path less taken. Those who look for
value and buy it up; those who "buy at the point of maximum pessimism."
While this may be a risky approach, the rewards can speak for themselves.
Have you ever looked at the chart of a company and longed to have bought
at its 52-week low? Believe it or not, that was very likely the point of
maximum pessimism, the point at which all shareholders questioned their
investments and the bashers prophecized doom.
While it's extremely difficult to predict the bottom for any stock, it's
not so difficult to research it. Look at the company's SEC filings,
analyze its assets, liabilities and shareholders' equity. See if they
have any debt. See if they have the necessary financing to continue their
operations. See if revenues have increased or decreased this past
quarter/year and by how much. See if new shares have been issued.
All in all, it's important to see why investor sentiment has changed so
abruptly. Emotions play a crucial role in the stock market. Investors
tend to overreact to situations; from this, we are sometimes presented
with stocks that may be heavily oversold. I don't have the statistics at
hand but I'll go out on a limb and say that more shares in the OTC have
probably been sold these past few months than have been bought. Likewise,
more shares were probably bought this past winter. This presents us with
stocks that may be either oversold or undervalued.
This is the reason we continue to present you all with new investment
opportunities. While they may not yield instant results, I'd like to make
a prediction: when volume in the OTC shows any signs of coming back, many
investors will jump back on the bandwagon. Many of these stocks will
experience sharp inclines when the "panic buying" sets in. This may very
well leave many investors wondering why they weren't buying during those
slow summer months.
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The above is a stated opinion and shall not be construed as any kind of
investment advice.
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Have a great week!
The BlazinPicks Team
Brought to you by Metromedia Research Group LLC
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