Dr. Bob!
I had missed this post until I just saw a new response to it...
I had been thinking nobody anywhere on these threads but me was crazy enough to be playing with these babies.....I was
for the most part too ashamed and embarassed to admit throwing actual cash at any of these pennies...These threads
(not a knock) mostly analyse the glamour stocks in vogue, it
appears quite beneath these threads to discuss them seriously. For the most part, they have no fundamentals, no earnings, not proven companies. They are speculative, risky.
Now that I see YOU have an interest in these microcraps, I don't feel I need to be locked up in the funny-farm. GGG
Actually, I got ideas on pennies, and I'm anyone...so, I think I'll just mention some.
First, when I started investing (equities) in June, 1999, I thought it would be best to "invest" in the perceived strongest companies (csco and such). I found if I was patient, hung on when things looked bad, I could at least achieve a 10% gain in a couple months. I did not use charts at the time. I did not use a computer. I never owned a computer before Jan. 2000. At the time, I was reading IBD and watching the New High list daily. It occurred to me that although more established companies surged from 5-25+%
on a new high day, there were cheaper stocks in 2-5$ land which were putting in 50% - 300+% gains in sometimes as short
as a day (esp. closer to the bubble top). When I finally got that computer in Jan 2000, I found S.I. site and used the
Stock Screener in place of the IBD New High list as the newspaper was received by me well after the markets opened and by the time I had hand posted my desired data and then checked out the companies, I found I was
usually late to the party. At the time, I spent many hours diligently investigating any prospective company to somehow logicly assess risk. Now, I can honestly say the research was
all a big waste of time as the truth is, when a stock's price is rising, "fundamentals" are always appealing and justify the decision. Only when you see a stock that trades for example $4.00 at the top go down to .03 at the bottom do you realize that fundamentals mean diddly-squat. Fortunately, they were not all that dramatic and I certainly didn't wait for the bottom to get out. ggg The nice thing about the S.I. Screener (by the time I realized what it was -ggg) was I could set my parameters: price, technical considerations like stochastics exiting oversold, %K,D crossovers, etc. AND, I could get my data BEFORE the market opened and play my game at the open. By the time I really got good at it though, it was late Feb and as we all know, the game was about to change in a big way. One of my best trades back then (sigh) was AFFI. It was at about a buck.
I bought many thousand shares. In less than a week, it was
a 5 bagger. Then...outa there...on the search for the next one. When the game was over, there were virtually no stocks on the search results for so long....I quit looking until recently I noticed some of those POS stocks I still had on my IQ Chart watchlist have been perking up just recently. I watched DWCH go from .31 to over $1 in a couple days. Unfortunately, I did not play it as I was too stupified and in a state of disbelief that it happened. Well, it seems the
whole Russel Index has rallied and has already broken the
downtrend line (from the sept top) ahead of the Nas and is
nicely putting in a textbook pattern of higher highs and lows.
What this tells me is either the MM's are manipulating these
POS again (they do anyway-that's why FA is USELESS) and this is a fakeout...or we are really at the end of this downtrend
(for the time being).
Anyway, it is clear, when one looks at a long-term chart for many of these cheapies, many have been around for years and it also becomes clear that they seem to have a cycle, repeating the spectre of boom and bust, over and over.
Also, these advances on the individual stock charts seem to have three stages...1)an initial breakout 2) after flag forming, consolidating a breakout to a new plateau 3) repeat and rinse #3 breakout is the deusy - often resulting in 100-500 % gains in a couple days!.
Finally, after the dance is over, the part of the equation I know, understand and can play in the future, is the BUST.
When the market starts falling victim to the bear, SHORT is the only way to play them. They ALL bite the dust. (Flack - where were ya when I needed ya! GGG)
I think it is quite possible this game may indeed have started up again and I see I will have to revisit my ole friend the stock screener. I will certainly look at your list on the charts and tomorrow I will post to you the link for the template I was tweaking and using last year.
See what happens when you ask anyone for ideas? Sorry....
Best Regards,
Eichler
P.S. I realize I am quite inexperienced in terms of years of
active duty...but I make up for it by being able to use more that the average number of brain cells at a time, and I am
very good at GAMES. Once I figure out the rules, I can play a mean game. I think other ideas regarding the micros as you call them will come back to me, if you are interested. Very
long day for me though, I think for now I'll call it quits. |
