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interactive.wsj.com.
'Penny' Whiz Can Pick Winners,
If Mom Would Stop Bugging Him By TERRI CULLEN
THE WALL STREET JOURNAL INTERACTIVE EDITION
Daniel Miller knows the pressure of being an all-star stock-picker. You're only as good
as your last success.
His ability to pick winners from the hazardous world of "micro-pennies," stocks valued
at less than a penny a share, has won him an ardent following on the Internet. And the
pressure is always on to come up with the next big idea.
Daniel spends 10 to 12 hours a day hunching over a computer in a small room in
Teaneck, N.J., pouring over on-line message boards and stock charts, scanning
company Web sites and the latest filings on the U.S. Securities and Exchange
Commission site, and blasting out reports on his findings to more than 100 on-line
investors who subscribe to his daily e-mail newsletter.
That is, of course, until his mother barges into his bedroom and orders him to turn off
the computer and get to bed. At 14, even Wall Street whiz kids need their rest.
Daniel "Dovi" Miller
Daniel has earned his reputation as a consistent provider of "DD," Internet shorthand for
due diligence -- in-depth research and analysis of a company's fundamentals -- on the
Silicon Investor Web site's (www.techstocks.com) stock message boards.
"On-line it's so easy to come across people whose recommendations and hot-stock tips
get instant recognition and credibility if even one of them prove to be true," said John
Bajkowski, editor of Computerized Investing, a newsletter for individual investors
published by the American Association of Individual Investors. "But blindly following the
advice of someone on-line is a recipe for disaster."
To be sure, Daniel has taken his own lumps in the penny-stock ring. His first investment
in a micro-penny stock called Startronics tumbled 80% soon after he invested $1,000.
But Daniel quickly learned from his mistakes, taking the time to thoroughly research the
background of the bargain-basement stocks he likes. He's since managed to recoup all
his losses and then some playing penny stocks, often by investing no more than $15 a
pop. Daniel trades only micro-pennies, he says, because they give him the most bang for
his very limited bucks.
On-line investors who "lurk," or hang around stock message boards without
participating, in the penny boards Daniel frequents have found that they can reap fat
returns following his lead.
Daniel's most recent pick, MPTV Inc., a Newport, Calif., developer of time-share
ownership resort properties, convinced a lot of message board participants of his
influence in the micro-penny stock arena. Its stock was trading at about two cents a
share when it came across Daniel's radar.
One of Daniel's reliable sources, John Coviello, a Somerset, N.J., technical writer who
goes by the Silicon Investor alias Rock_nj, sent him an e-mail about the company,
Daniel says, "saying it was coming out with some news about a huge Vegas deal." He
did some further checking into MPTV and said what impressed him most was the
company's principal asset: Lake Tropicana, a multimillion-dollar resort property located
next to the MGM Grand Hotel/Casino and Theme Park in Las Vegas. "Not many
penny companies have multimillion-dollar assets," he said, adding that rumors of an
impending news release from the company clinched his decision to make it his daily
stock pick on July 9.
Volume in MPTV's stock rocketed, soaring to more than 25 million shares on the OTC
Bulletin Board on July 10, as news of Daniel's stock pick was circulated by daytraders
and momentum-stock players on the Silicon Investor and the CyberWhispers stock chat
Web site. "Check out MPTV," was a common refrain on the Silicon Investor message
boards that day, "it's Daniel Miller's latest pick." MPTV's shares more than doubled
from 1.9 cents a share to a high of 4.1 cents in intraday trading on July 10, before
closing at 2.7 cents. Friday, its stock closed at 2.2 cents a share, up 0.003.
A phone call to a number listed as MPTV's California headquarters went unanswered,
and officials couldn't be reached for comment at Lake Tropicana.
Trading Since He Was 12
When he's not in school, Daniel spends much of the day conversing on-line in chat
rooms and on message boards with fellow investors and brokers that he's come to
know as friends. Daniel's been trading on-line since he was 12, when his father first set
up a custodial account for the boy at E*Trade Group. "He was really interested in it,
and my wife and I thought it would be good for him to learn about investing," said his
father, Leon.
Interested turned out to be an understatement. The boy became immersed in the stock
market, reading investment tomes voraciously, watching finance news shows on
television and, whenever he got the chance, sneaking off to his school's computer lab to
check his stock portfolio on-line. "On my graduation bus trip to Washington, D.C., my
friends kept kidding me about how I was running to the nearest phone at every
bathroom break, thinking I was homesick," he remembers. "I was really checking my
stocks."
Daniel's not completely stock-crazy, however. He plays basketball for his school's
team, and enjoys spending time hanging out with his friends his own age, both on-line
and off.
Older brother David, 19, introduced Daniel and his brother, Uri, 17, to the world of
investing five years ago when he received three shares of Public Service Enterprise
Group stock as a bar mitzvah gift from his great-aunt. David, who wasn't very interested
in stocks and investing, explained to his more inquisitive siblings how to read the stock
tables in the newspaper.
It was Uri who distinguished himself as the family's first stock-picking all-star. After
winning several regional essay and stock-picking contents, he entered and won a
contest sponsored by E*Trade Group in 1994. His prize: $50. Uri now earns
significantly more managing an investment portfolio for family and friends valued in the
neighborhood of $40,000.
That's quite an accomplishment for a teenager. But don't expect to see his kid brother
rush to pat him on the back.
Sibling rivalry takes on the form of a Wharton finance debate in the Miller household.
Uri, a passionate Warren Buffett disciple, believes that reliable, large-capitalization
stocks are the surest way to long-term investing success, while Daniel argues that
micro-caps are the only way to create wealth quickly.
"Warren Buffett made $30 billion investing in big company stocks and never once
touched a penny stock," Uri lobs across the dinner table. "In 'Beating the Street,' Peter
Lynch said he invests in stocks under $5 a share and he's done a pretty good job
himself," Daniel fires back. "Peter Lynch couldn't have invested in stocks under $5, he
managed a $52 billion mutual fund," counters Uri, warming up for battle. Their father,
Leon, a veteran of such skirmishes, just shakes his head and sighs.
"I often smile to myself when I see some posts directed to him in which it appears that
the writer has no inkling that he/she is talking with a 14-year-old youngster," says one
poster who uses the alias Eagle01 on the Silicon Investor boards. "He's going to be one
very smart and probably rich guy as he 'ages.' "
"Most people don't believe I'm just 14," Daniel agrees with a shy smile. "Some people
accuse me of being a stock hypster who just pretends to be 14."
Indeed, several message-board participants interviewed for this article voiced doubts
about Daniel's real age, and nearly all urged the publication to meet with the boy
face-to-face to verify that he is what he claims to be.
Others, however, tend to go a little overboard in their regard for Daniel's youth. "Daniel
Miller, get to bed this very minute!" one person playfully responded to a post the boy
made as midnight approached.
Mom Judith, a preschool teacher and part-time real-estate agent, and pop Leon, who
runs his own store-cleaning business, say they hope their son's interest in the stock
market will one day lead to a financially secure future, although his father jokingly insists
that Daniel will be allowed to pursue a career in finance "just as soon as he finishes med
school."
For now, however, the couple would be very happy if they could just get Daniel to turn
off that computer and get to bed. |
