PROJECT Fact/OTC (sm) - an OPEN INFERENCE APPROACH to basic OTC/BB studies
Ok I'm self posting this because I got some responses by PM (private mail). I think this approach is no secret. Who want may join should post here, maximum is 10-20 people to keep the effort manageable.
PROJECT : joint completion of FACT/OTC (sm) databse - a valuable tool for OTC/BB and post-Chapter 11 stocks. Effort of this will be shared mutually (Excel spreadsheet with 1500-2000 ticker list and structure data). Ticker list is fully completed, structure data only partially, here joint effort could be valuable
GOAL : to assemble a standardized arsenal of information to assist You in finding OTC/BB picks in the exploratory (pre-DD and basic FA phase).
MOTIVATION : it took me 500 hours to assemble my toolbox. Looking back - if I had known the tools of the trade in the beginning then I only would have spent 150 hours. Even so this could have been reduced by a shared project approach. That's what this is about. - to cut back the 150 hours further
REASON : self-reliance instead of hype, inappropriate promotion and pump & dump picks that others may play on You. A "Call to arms" tactic.
I would ask everybody to keep this dialogoue as public as possible, Since I got many questions similiar to the one I'm posting the response to here it would be easier on as all if we make it a little more public. That's what threads are for - I mean from succesful procedures we learn all and anybody can contribute freely to improvements. This also gives hypsters and pump & dumpsters an alert not to treat others as ignorant or prune to manipulation as they have been doing in the past, some sort of a "call to arms. Feel free to post every question or quip that may arise openly here.
Just to give a general impression, my specialty WERE techstocks til GaBard and others pointed me to post bankruptcy situations. I'm an inclusive mind, so I also dabble into OTC stocks - right now I'm 50% invested into OTCs. Anyway, I planned to shift my focus to post reorg (emergent from Chapter 11) companies. This is a niche, it's a bit more safe than OTC (infrastructure & financing, & downstream operation already in place) and the only specialty here is that those companies are often climbing a "wall" of doubts because no broker covers them. I mean things like NRGG, DEPCC, that already left the OTC and made it to the Nasdaq.
Ok, now to to adress some questions to me:
1) Symbol - universe: Is a "specialty" of my TA software. I'm using Omega- Supercharts 4.0 product (Nasdaq: OMGA). They supply You with a symbol universe for the whole Nasdaq, NYSE, AMEX, Canada stock exchanges. However no symbol universe for OTC companies is included. Means You have to create it Yourself, is tedious. All tickers have to be entered manuially (1500 !)
2)a) How do I store my database ? Tables right now in Excel, might change later (MS-Access 97).
2)b) First I got all the tickers for OTC-BB stocks less than $2.50. There's a site where You can selectively download "queries" and I used OTC/$0-2.50 as discriminating variables. Free site is: stocktools.com.
2)c) Next was a way how to infer news as to criteria I selcted. Costs $7 per month and it's very comprehensive: "news filtering": newsalert.com
2)d) Then I checked bankruptcy plays from the filtered news and from a site: bankrupt.com
2)e) OK all the sources above were included into the database in Excel. Good here is a "segmentation" approach. I assigned category-tags to all the news-contents "M..Management, F.. Financing, D..Dilution, P..Partnership, C..Contract, RS..Reverse Split, I.. Investigation (SEC), S..split, RV..reverse merger, A..ACquisition) etc. and have a column in the Excel spreadsheet where I place that info. It's a tedious job for 1500 tickers but I'm completing this over time. Don't need to do that instantly That data set can grow over time. This could be reagarded as some sort of "PROTOCOL", should give You a heuristic feel about what's going on on a quick glance. Remember this is pre-FA phase, You are just SEARCHING for picks.
2)f) Also important is to find out whether a company is NON-REPORTING, in the process being AUDITED (e.g. becoming a reporting entitty) or REPORTING. Reporting companies can be found with the SEC-EDGAR (link below). Also those that have "profile" or "SEC-Edgar" link attached in Yahoo can be considered reporting but that doesn't mean that those without a "link" from Yahoo are non-reporting (non-inverse relationship <g>) There should be a field in the database to describe this status of each company.
2)g) Very important in the Excel spreadsheet is that You provide for stock structure data: column headers like "Shares authorized, issued, float, Preferred authorized, issued, float" are very important. They help You with basic-"inferential"-DD. Also makes sense to get some of the recent asset, liability, cash and sales (quarterly) data - taken from last 10Q. This helps You in finding shells (almost no revenue) and seperate good from bad shells (debt levels). The share structure data help You find where issued is less than 50 million and authorized is less than 100. Preconditions (!!) in finding good movers. You can find EDGAR SEC filings at: sec.gov. Non EDGAR SEC reports (important - they carry the naughty companies) can be obtained at: sec.gov. Also important: check convertible instruments and warrants. Especially floorless preferred or debentures can be dangerous to a bullish long position.
2)h) Portfolio sites: this tool is of great value. Not what most might think for (organizing the own portfolio). No - the special value here is because of the news-link available at some sites I mean. Especiallly easy for my Excel Tables is this Yahoo-Portfolio feature. Up to 200 tickers per portfolio are possible. And You can CUT-AND-PASTE from Excel to Yahoo ticker list ! This is great stuff. You can create a new "VIEW" in Yahoo that shows You 52-week high and low and movement parameters over last day. In this way You are alerted by the market not by hypsters promoting a stock. Only weakness on Yahoo is that the "average volume" feature wouldn'T work for most OTC stocks. Well, the newslink is there too - that aides Your search for stock picks ("inference"). I use Yahoo because it provides Newslinks and You can cut and past from Excel to Yahoo portfolio ticker list without having to type in ticker after ticker.
3) RealTime trading log: I'm using standard Real Time Quotes right now not a trading log but I planned to change that. I'll find out the facts about RealTime trading log providers at a later time. It seems a bit easier than an agent collecting it (should be faster). RT means that it is up to date when I want it but I wouldn't have to do that necessarily. I enjoy a busy phase right now. But I planned to change that in a month or so because I don't want to be a victim of the market. It kills time. I wasn't looking into this one yet.
I will further refine my approach. Stress lies in "inference" -e.g. having the market & news telling You instead of gurus. That's the INPUT of any FA / DD that should follow.
4) especially on OTC/BB stocks: check all search engines You can find. Also check for stinky stocks. Good site for these are: stockdetective.com and smallcapinvestor.com
5) important: Cut-off criteria: Huge Authorized (>100 million) without adequate growth plan, history of dilution, huge issued (>50 million). SEC investigation with merit, bad refernces, no respected-company link, no product or market, extensive promotion firms, promoting people selling stock or doing 144s etc. They are reasons to STOP wasting time DDing a company and move to others. Your time is valuable - time is money. Many stocks out there. Not only the one with 800 million authorized and 80 million issued.. <g>
6) Now what You are doing. The system above can assist You with any play in mind. Beware that extensive DD has to be undergone for long-term holds and the cut-off criteria have to be satisfied. For momentum plays, the Yahoo portfolios may help You too. Don'T DD them - waste of time. Know when To get out of momentum plays ! A glance at your database will tell You immediately the basic stock structure. Changes in the future will be announced in annual releases so they can be readjusted..
BTW: it took me 500 hours to master and streamline the process and find good shortcuts. I would guess now with the knowledge I inferred from my proceedings I would need 150 hours for the same task. It's all about rationalization. Together this may take us all less than 5-10 hours each and the results are same.
All interested pls. write PM to me or post here..
best regards
CROSSY
carpe diem ! |
