I agree with your philosophy about finding undiscovered companies before they become recognized. However, at market tops there usually is excess speculation on story stocks. While I haven't been at it since 1968 I do invest professionally and its how I make my living. As a general rule I don't post on message boards.
However, I am concerned when people place insane evaluations on stocks that are highly speculative. Personally, I wouldn't invest in Yahoo, Excite, or Netcom. I also wouldn't post anything negative about those companies because despite what I think long-term about their earnings potential the companies are legitimate, well managed companies.
It seems like today all a company has to do is announce a product that is related to the internet or increasing bandwidth and speculators will immediately value that company at 500 million dollars.
I probably am dismissing IAUS without enough information. However, after looking at other emerging technologies ISDN, ADSL, ATM, fibre-channel, Biotech companies, fiber-to-the curb, there is a long process that occurs between developing a new technology and bringing it to market. Also management is often more important than the new technology because you need adequate financing, marketing, and manufacturing capabilities.
A company that shamelessly hypes their products, with a weak balance sheet, that chooses to unveil their technology at a news conference rather than obtaining patents and establishing relationships with telcos just doesn't seem to being going about business in the normal fashion.
One last analogy and then I'm out. I have a small portion of my funds in IPIC a biotech firm with a several products-an obesity drug and a drug that limits the damage to stroke victims. The stock is expensive with a billion dollar market cap. However, the Board of Directors and research team is a who's who's list of researcher's and doctors. They have alliances with major pharmaceutical companies and they're in varying stages of FDA approval with their products. In fact Redux, their obesity drug just gained FDA approval. So despite the fact that the company is pricey I'm willing to invest because the story is compelling and I believe they have the right people in place and are meeting the milestones neccesary to be successful.
If a biotech company annouced they had an obesity cure, where the president of the company had been out of medicine for fifteen years, had no patents, had not started the FDA approval process, had no alliances with major pharmaceutical companies, had only spent $35K on general and administrative expenses two years ago with nothing going to R & D and was unveiling their drug on June 27th I wouldn't value their company at $400 million dollars. Even if the drug worked it would be years before it came to market and by that time IPIC, Amgen and whoever else who have similar products in the pipeline would own the market place.
I'm honestly not trying to be smug and I have no agenda other than a hope that someone won't lose their shirt investing in this company. To be honest after reading their investors packet I wanted to short as many shares as I could find but since they're a bulletin board company I can't.
These boards are great for idea generation. Unfortunately they are also great for spreading false information, hype, and trying to lure in the guy looking to buy the next Iomega.
Eddie
Last time I comment on this company. |
