I am happy to be posting on Daniel Miller's Angelfire site as a supplement to the
“Rande Is. . . HOME” thread found on Silicon Investor here:
Subject 24011
On the HOME thread, we focus on forgotten undervalued gems with pending events,
technicals or other circumstances that will hopefully spark a fire under
them. Then, when the rest of the world “discovers” them, is when we like to sell for maximum gains.
These are generally Nasdaq listed stocks between 1 and 15 dollars.
Thanks to Daniel, we now have an outlet for some great under a buck stocks that otherwise might get lost in the shuffle. These “penny” picks can be Nasdaq, OTC:BB, Amex or NYSE. Note: I consider some stocks on the bigger boards to be “penny stocks,” even though they are over 5 dollars, due to their “high hopes and lack of revenues.” These would be the exception to the under 1 dollar rule.
Preferences:
My picks will often have no momentum yet. I tend not to daytrade, but prefer swing
trades, holding from 2 days to 3 months before selling. I also bottom fish.
I will try to make a designation between a “short swing,” a “long swing” or a bottom fish
gamble for the long term future.
OTC:
I have never seen an OTC stock move on to the big boards and stay there before. There are many that will claim that their pick is going to 20 and higher. Dreamers and suckers are often one in the same. If I smell a scam, I will say so. I don't tolerate pump and dumps, especially those cannibals who prey on newbie internet traders. This arena is risky enough as it is.
We want to be SMART traders. In my opinion, 60 percent of OTC stocks are scams, 30 percent
should be out of business, or should be considered hobbies because they have no idea how to
run a company. . . and 9 percent are honest companies trying to make a living.
But it is that final 1 percent that we will be focused on. Real companies, with real products and customers and real revenues that translate into earnings [now or soon]. . .and verifiable assets located in the continental U.S., not some casino located on a ship somewhere in the Mediteranean Sea.
What I avoid:
I have learned to steer clear of reverse splits, reverse mergers, shell companies playing the shell game, offshore debentures, etc. Also, Canadian companies, Las Vegas based or Nevada corporations, Denver based, some South Florida based and some Dallas based companies are a no-no. No minerals or fossil fuels. Companies that refuse to file with the SEC “Non-reporting” will not be discussed. This gives them a license to lie. The goal is to reduce the risks inheritantly associated with penny stocks, as much as we can.
After skinning away the tons of fat and fluff, we hope to have a small chunk of good meat left. . .worth the money. A diamond-in-the-rough. . .an undervalued, forgotten or beaten down gem. . .
With all that said. . . .best wishes to all as we explore perhaps the most exciting arena in all the market
. . .under a dollar.
Rande Is
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