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LOUSY PREDICTION! PART 8:
In summary, I was wrong about my March 10th prediction in 2005 – very wrong. But, I believe I was just very early. I’m content with my present market neutral position and it will not change before a catastrophic drop in the markets – no matter how long it takes.
Len
LOUSY PREDICTION! PART 7:
As I said before, Brinker indicated many times that we are in an “8-20 year secular bear market” which began in 2000. There are always cyclical bull markets within a secular bear market. He still believes we are in a cyclical bull market within a secular bear market. However, it must be pointed out that the average length of time for a cyclical bull market is 29 months. We are now OFFICIALLY in month 47 (since the lows of October, 2002).
We have not only exceeded all previous lengths of time for cyclical bull markets, but are way above the average gain for cyclical bull markets – which is 53%. Today, we are +63%. Furthermore, this is the longest period of time in stock market HISTORY that we have not had a 10%+ correction. We are borrowed time. But, why shouldn’t we be? Every thing else about this economy and expansion is borrowed.
http://www.investorshub.com/boards/read_msg.asp?message_id=8026789
Len
LOUSY PREDICTION! PART 6:
I’m still fully confident that the markets are going to crash at some point. Obviously, I thought they would by now. The housing market, world geopolitical risk, aging baby boomers, national and personal debt, are all crazy aunts in the attic. There are more issues such as derivatives, pension plans, increasing disparity between rich and poor, health care industry and may other issues.
Sooner or later this economy is going to take a major, major hit – greater than anything we have ever seen – at least since the 1930’s IMO. It is based upon smoke and mirrors – and outright lies. It is a house of cards and WILL collapse. It is only a matter of when. I will be there to pick up the pieces – and not my own. That’s assuming I don’t shoot myself first because it is too painful to watch.
I continue to recommend holding 1/10 ounce gold and junk silver (meaning bags of silver coins from 1965 or before).
Len
LOUSY PREDICTION! PART 5:
I have no regrets. I rode the train from late 2002 (absolute lows) until halfway through 2005. The VAST majority of the low hanging fruit had been picked by that time. Any VMC’er realizes the massive difference between the number of microcaps that had earnings, cash, no debt, great growth a ludicrously low prices in 2003 and even 2004 compared to 2006.
In all probability, the small cap phenomenon has ended. As economies slow down, money first gravitates to large cap stocks and then, finally, to other markets. Declining small cap stocks are the first shot across the bow of almost all cyclical bull markets. The reason is simple. Small caps get the cream that is skimmed from an overly exuberant economy. The first thing to be eliminated is that exuberance.
Therefore, I may have missed additional profits in the past year from microcaps, but I will not be the one to lose what I have made. No chance.
If I have to wait 1 year or 100 years until the next major market low, I will wait.
Len
LOUSY PREDICTION! PART 4:
I have made good and bad predictions. Just as my March 10, 2005 prediction for a DOW high was lousy, my predictions on the housing bubble – which began with my starting the BUBBLE (now RUBBLE) board on June 1, 2005 was extremely timely. So, far virtually everything I have harped on about housing has come true and there is much more carnage to come IMO. I’ve made good predictions about oil prices doing down, both the day after Katrina as well as recently when oil appeared to peak.
There are other predictions I’ve made with individuals – some have been right, some wrong. It is not an exact science. But, in one sense we ALL make predictions every time we buy a stock. I believe I have done a good job calculating both lows and highs on most stocks in my universe.
Nevertheless, the single most referred to prediction that I made on VMC was the March 10, 2005 DOW high. It is time to make sure that I’m unequivocally clear that the March 10, 2005 prediction was wrong and certainly resulted in me losing potential profits.
Len
LOUSY PREDICTION! PART 3:
I began reducing my exposure to stocks with my prediction and eventually got to 80% cash by late 2005, where I had remained until recently. I intended to short the market 20% as a hedge against the 20% long positions I continued to hold. I was going to do that upon Brinker’s call that the cyclical bull market had finally ended. He has yet to make that call. This summer I decided to short 10% (half) on the Q’s as a hedge against the remaining 20% long positions that I held. I then intended to short the remaining 10% to become completely market neutral. Instead of shorting another 10% of the Q’s. I have sold another 10% of the longs.
My present position is that I’m 10% invested in stocks and 90% in cash and 10% short the Q’s. I’m 100% market neutral. Furthermore, I will remain 100% market neutral for as many years as is necessary until the next October, 2002 (or March, 2003) major market lows. They will happen again. I will be there with cash when they do – but not before. I have zero interest in being invested in the markets at this point and there is NO CHANCE I will be invested in the markets other than the small percent I presently am until the next major market low.
Len
LOUSY PREDICTION! PART 2:
At this point Brinker's entire fundamental premise that I based my prediction on (though he did not agree that the cyclical bull had been reached – and still doesn’t – is now essentially debatable. The premise is that we are in a secular bear market for "8-20" years beginning January of 2000. No secular bear market would allow for new highs 6 years into an 8-20 year period or else it could hardly be called a "secular bear market" - at least in my opinion.
However, the DOW is probably not the index to use for determining (or confirming) a secular bear market. It should be the S&P 500 - which is still miles (-14%) below the record of 1553 (1339 now). And, the S&P 500 is what Brinker most closely follows, though his historical analysis is predicated upon the DOW - and all historical analysis of previous cyclical bull markets within secular bear markets have been done with respect to the DOW. Thus, at least to some small degree, the entire secular bear market (as defined by Brinker) must be called into question with today's new DOW high.
In any event, on March 10, 2005, the high for the DOW reached 10,905. Today, it peaked at 11,776. That is 8% above my predicted peak - and despite recent underpeformance of VMC stocks, clearly over that time, VMC stocks significantly outperformed the DOW.
Len
LOUSY PREDICTION! PART 1:
Well, let's start off with the short version. In early March, 2005, I predicted the DOW had topped for this cycle - that being a cyclical bull market in a secular bear market (Brinker philosophy).
Obviously, the cyclical bull market did NOT end in March of 2005 as a new DOW high was reached today - which superceded the January, 2000 high. Today's high was 8% above the March, 2005 high.
http://www.investorshub.com/boards/read_msg.asp?message_id=8615098
Len
Post:
I can't say what month is best for microcaps (historically), but the best month for the markets is January. Here is a post I did on the subject.
http://www.investorshub.com/boards/read_msg.asp?message_id=7894687
Len
January effect an interesting theory related to small and micro caps. Basic theory states Jan is month with the highest average return...most frequently in microcaps. Empirical studies to support this but im to tired after a long week to take the analysis to the next level. zzzzzzzzzzz
After reading the prior posts on Jan/Nasdaq perhaps January is the best month all around.
Repost of message I wrote off value microcap board.
Value Microcaps returns through 4/15/05 for 2005.
Commentary: Last week when I posted the returns of the self made index they were up 20% for the year, and now they are only up 11.69%. The index dropped approxmately 7% this week, so this gives you an idea of how bad the performance this week was that the average stock dropped 7%, but let me say that we didn't need an index to confirm that the market stinks right now, just reporting the index like I do every friday after the close, although plugging the # in some of these stocks (ones I own) wasn't the most pleasant thing I did.
Stock Symbol % Change
ACRG.OB 34.12%
ADGO.OB -8.15%
AFPC.OB 18.85%
AHOM.OB 8.67%
ALDA 24.92%
ANII.OB -6.25%
AOBO.OB -1.96%
APES.OB -43.16%
ARIS.OB 9.57%
ASI -10.04%
ASPN.OB 23.22%
BPTR.OB -12.50%
BSIC.OB 84.93%
BUKS.OB 12.31%
CAMT -37.36%
CGCP.OB -15.25%
CGNW.OB -7.89%
CHAR.OB 43.75%
COVR.OB 8.33%
CRV -17.96%
CRWS.OB -12.73%
CTIG.OB 26.32%
CTT 4.86%
CULS 26.71%
CXTI.OB -16.67%
CYDS.OB 93.55%
DAAT.OB -12.81%
DCAP -35.10%
DGIX.OB 47.06%
DNDT.OB 50.00%
DXPE 2.08%
EDAC.OB 35.00%
EGY -10.61%
ELTK 97.66%
ENUI.OB -7.69%
ERS 12.86%
ETEC.OB -40.41%
EZEN.OB 79.61%
FORD 202.63%
FPPC.OB 77.17%
FRD -40.69%
GACF.OB 29.27%
GBCS.OB 15.79%
GMAI -24.49%
HCAR.OB 48.15%
HEMA.OB -18.71%
HOM 1.27%
HQSM.OB -28.85%
HURC -18.85%
IAIC.OB 32.50%
IIIN -30.23%
IMPL.OB 4.84%
ISAC.OB 83.33%
JMIH.OB -9.68%
LKI 0.95%
LMIA -13.31%
MCZ 47.62%
MDF -21.20%
MFRI -43.87%
MGRP.OB 17.09%
MIG 4.41%
MMRK.OB 28.95%
MPAD.OB 31.36%
MUSA -10.89%
NEGI.OB 32.56%
NKBS -21.16%
NPTI.OB 172.11%
NWD -10.00%
OHRI.OB 62.79%
OUTL -1.79%
PDGE.OB -4.61%
PHPG.OB -22.40%
PIHC.OB 41.30%
PLUS -9.82%
PTA 2.39%
PYOL.OB -31.26%
RESC -7.89%
RIMS.OB 14.49%
RTWI 11.80%
RURL -13.33%
SHOE 112.21%
SIMC 2.71%
SVLF.OB 0.00%
SWTX.OB -17.50%
TCCO.OB -27.50%
TGCI.OB 31.03%
TGIS.OB 31.21%
TIII 20.92%
TMFZ.OB -3.85%
UAHC -15.66%
UCIA.OB 12.99%
USNU.OB -16.00%
USOO.OB -13.27%
WEX 9.41%
WIRX.OB 44.10%
WMCO.OB 6.40%
WNI -1.15%
WTEK.OB 60.71%
ZEUS -41.34%
ZONS -54.30%
Aver. Return 11.69%
market straegies I use.
My favorite strategy is to jump on a good earnings annc and ride it up. It offers the opportunity for quick gains.
If i miss out on the initial run i will wait for a pullback and accumulate for the 2nd leg which doesnt offer the immediate gratification but seems to offer a very safe risk ratio. If it has an initial run you can bet it will receive more interest after a pullback most of the time. The lower the pps the more dramatic the gains from a percentage standpoint so my favorite stocks are profitable below .10 pps with o/s below 100 mil.
Another strategy i like to use for longer term holds is to buy stocks that will end up with a p/e ratio in the future but currently do not have one. CGNW ATVE SYTE all currently fit this mold. In the near future losses will be replaced with gains and the stocks will start showing up on stock screeners when value buyers are looking for low p/e stocks.
A strategy i have just started to use is to buy stocks that i like from a value standpoint on weakness after the filing of a form nt-10q/nt-10K. I bought enui at .32 last week after the filing of nt 10Q. Hqsm, if it drops any more will offer the same opportunity. Atve same thing. A late filed financial statement doesnt affect the value of the company from a fundemental basis and offers the opportunity to purchase undervalued companies at an even cheaper pps.
A strategy i intend to imploy in the future (after i build up the value of my account to a significant level) is to buy undervalued stocks that pay a dividend for scalps and lifetime dividends. The way this would work is to read all earnings annc's. When i see a company that pays a significant div annc improved earnings that i believe will result in an increased pps i would then purchase a position. Wait for it to hit my target price. THen sell enough shares to recoup my initial investment and hold onto the remaining free shares for lifetime dividends. These typically are longer term plays that take time to move to the target price but a portfolio of lifetime dividend payers obtained for free has always appealed to me.
Some current strategies i use and some strategies i intend to employ in the future.
How's April? lol
SSKILL: Worst Month:
September is negative on average, but so is July - just not as bad. The best three are January, December and November.
http://www.vtoreport.com/nasdaq/nasdaq-month.htm
You can make just about an entire year's returns on that 3 month period alone. In fact that 3 month period averages +8%.
http://www.vtoreport.com/nasdaq/nasdaq-3month.htm
Len
Run, now we are starting to get this board up and running here. Now to answer your question last year I was up about maybe 1% after October, but finished up approxmately around 40% on the year because of outstanding November and Decemeber on my individual stock portfolio. I've also had a Decent January, and a very good February, and a not so great March but am up in 2005 as well. Now to refer to market seasonality/market timing, I agree if you look back historically you will find that if you were in the market from Novemeber to February you would get a good chunk of your returns. However, if you look back historically I think every month in the market averages to be up except one think its either September or October not sure which one. So historically it is possible to make money every month if you know what your doing. I do not trade by market seasonality, because although there is a strong connection to better returns in certain months compared to others, I still have made money in the past in those other months too. However, the more concerning thing to me is why you were down 30% over that time period, which basically means I would evaluate what stocks I purchased during that time period? Did something go terribly wrong (like had a lot of money in one stock and it plummetted), Did you churn your portfolio to often growing impatient with your stock positions, only to see them rebound after labor day last year. Was your DD not as good, and didn't pay attention to market because you were preoccupied with other matters. If I were you I'd go back and evaluate because although you may have been down over that time period you should haven't been down 30%, something had to be severely wrong with your stock picks or strategy to cause that much of a drop, and in my humble opinion it wasn't market seasonality that caused that type of a drop in last years market which wasn't that bad, but maybe your problem was something else? Of course this is just my humble opinion, and I'm not saying market seasonality doesn't exist, but it doesn't explain those type of returns.
MDF-Form 4 on 4/1/05
There are six new Form 4 filed on 4/1 by the ceo,coo, cfo, etc. acquired the company stocks. I hope this is a good sign for the pps to continue its recovery near term.
Market Timing- Seasonality
I wonder if anybody trades the market seasonality as one of the strategies. I have learned that to be in the market from late Nov to April would maximize the investment returns over the years; and to be in the market from May to October will provide the least returns. Last year I stayed in the market all year and my portfolio was down 30% during May to September. Looking back I really should have been in cash then and take a good vacation.
On the other hand during summer there may be some good bargains in the market to initiate small positions if you have cash.
I would like to know other people’s experiences on this board with regard to the market seasonality.
This is a repost from the value microcaps board, which I wrote, although this is a little more stock specific then I would like to put on this board this gives you an Idea of how the value microcaps have done in Q1, and this is my little index of how this style of investing is doing.
Value Microcaps list with Q1 returns
Notes:
1) All stocks here are microcaps.
2) These stocks have been accepted by the board as value, or were considered value in the beginning of the year.
3) Rate of Return was done by the sum of all the returns divided by the 100 issue here, To get an average return.
4) Although these are not all the stocks we talk about they are a nice size microcosm of our stock universe.
5) These stocks represent a broad range of sectors and give us a good idea how the value microcaps have performed so far.
Stock Symbol Share Price Share Price % Change
(3/31/05) (12/31/04) (Q1)
ACRG.OB $3.96 $2.96 33.78%
ADGO.OB $1.45 $1.35 7.41%
AFPC.OB $1.49 $1.22 22.13%
AHOM.OB $3.98 $3.46 15.03%
ALDA $16.90 $15.25 10.82%
ANII.OB $3.42 $4.00 -14.50%
AOBO.OB $1.42 $1.53 -7.19%
APES.OB $0.82 $0.95 -13.68%
ARIS.OB $2.60 $2.30 13.04%
ASI $14.90 $16.34 -8.81%
ASPN.OB $2.88 $2.11 36.49%
BPTR.OB $0.95 $0.96 -1.04%
BSIC.OB $1.50 $0.73 105.48%
BUKS.OB $0.85 $0.65 30.77%
CAMT $3.35 $4.47 -25.06%
CGCP.OB $0.64 $0.59 8.47%
CGNW.OB $0.36 $0.38 -5.26%
CHAR.OB $2.50 $1.60 56.25%
COVR.OB $0.70 $0.60 16.67%
CRV $6.52 $7.35 -11.29%
CRWS.OB $0.52 $0.55 -5.45%
CTIG.OB $0.56 $0.38 47.37%
CTT $13.95 $11.10 25.68%
CULS $11.16 $7.00 59.43%
CXTI.OB $0.97 $1.14 -14.91%
CYDS.OB $0.32 $0.31 3.23%
DAAT.OB $2.70 $2.81 -3.91%
DCAP $5.59 $7.75 -27.87%
DGIX.OB $1.50 $0.85 76.47%
DNDT.OB $0.30 $0.18 66.67%
DXPE $5.10 $4.81 6.03%
EDAC.OB $2.10 $1.60 31.25%
EGY $3.83 $3.88 -1.29%
ELTK $4.32 $1.28 237.50%
ENUI.OB $0.40 $0.39 2.56%
ERS $4.55 $4.12 10.44%
ETEC.OB $1.36 $2.45 -44.49%
EZEN.OB $2.05 $1.03 99.03%
FORD $12.99 $4.18 210.77%
FPPC.OB $2.95 $1.27 132.28%
FRD $6.83 $10.79 -36.70%
GACF.OB $0.74 $0.82 -9.76%
GBCS.OB $1.10 $0.95 15.79%
GMAI $10.07 $12.37 -18.59%
HCAR.OB $1.20 $0.81 48.15%
HEMA.OB $1.44 $1.55 -7.10%
HOM $1.61 $1.57 2.55%
HQSM.OB $0.21 $0.26 -19.23%
HURC $13.95 $16.50 -15.45%
IAIC.OB $0.50 $0.40 25.00%
IIIN $15.02 $18.06 -16.83%
IMPL.OB $7.90 $6.20 27.42%
ISAC.OB $7.35 $3.90 88.46%
JMIH.OB $0.30 $0.31 -3.23%
LKI $11.41 $9.51 19.98%
LMIA $5.42 $5.41 0.18%
MCZ $1.62 $0.84 92.86%
MDF $2.25 $2.83 -20.49%
MFRI $7.17 $11.10 -35.41%
MGRP.OB $6.87 $5.85 17.44%
MIG $5.25 $4.99 5.21%
MMRK.OB $4.85 $3.80 27.63%
MPAD.OB $7.25 $4.40 64.77%
MUSA $19.59 $18.55 5.61%
NEGI.OB $3.10 $2.15 44.19%
NKBS $3.73 $4.30 -13.26%
NPTI.OB $3.90 $1.47 165.31%
NWD $0.84 $0.90 -6.67%
OHRI.OB $5.25 $4.30 22.09%
OUTL $7.88 $7.82 0.77%
PDGE.OB $1.50 $1.52 -1.32%
PHPG.OB $1.17 $1.25 -6.40%
PIHC.OB $2.01 $1.38 45.65%
PLUS $11.67 $11.81 -1.19%
PTA $2.24 $2.09 7.18%
PYOL.OB $2.90 $4.35 -33.33%
RESC $20.68 $20.67 0.05%
RIMS.OB $0.83 $0.69 20.29%
RTWI $10.62 $9.32 13.95%
RURL $5.29 $4.95 6.87%
SHOE $5.83 $3.03 92.41%
SIMC $4.40 $4.06 8.37%
SVLF.OB $1.46 $1.44 1.39%
SWTX.OB $1.38 $1.60 -13.75%
TCCO.OB $4.55 $6.00 -24.17%
TGCI.OB $4.00 $2.90 37.93%
TGIS.OB $1.93 $1.41 36.88%
TIII $1.93 $1.53 26.08%
TMFZ.OB $3.09 $2.60 18.85%
UAHC $5.77 $6.31 -8.56%
UCIA.OB $1.99 $1.77 12.43%
USNU.OB $0.21 $0.25 -16.00%
USOO.OB $0.90 $0.98 -8.16%
WEX $4.60 $4.04 13.86%
WIRX.OB $2.80 $1.95 43.59%
WMCO.OB $1.34 $1.25 6.80%
WNI $6.09 $4.35 40.00%
WTEK.OB $0.54 $0.28 92.86%
ZEUS $17.88 $26.51 -32.55%
ZONS $3.18 $6.63 -52.02%
Average Return 19.79%
Commentary: As you can see although the market has suffered a decline the value microcaps as a whole have done well this year. And although the past month hasn't been the best this index of value microcaps have returned roughly 20% in the first quarter. These stocks were picks mostly by other board memebers and have been perceived by value either in the beginning of the year or are percieved to be value right now.
I will share with everyone my trading strategy. I typically holds stocks from a couple of months to a year or so. The time horizon is not set in stone, but for me thats generally when my investment hits my price target.
I believe everyone when entering a position should with a price target range. Which means you have the highest price you think the stock could go and the minimum profit you think the stock will make and you will take if the postion is successful. The reason why this price range targets are important is you need to compare this investment to other investments to see what is the better investment in your opinion, since we don't have enough money to invest in every stock in the world. How I pick a price target range is kind of conservative. 1) PE at high range you try to match to the industry average, where as generally the low range I generally like to give a PE of 10-15, but the company only realize that if it is growing profits and revenues, although I do invest in some cost cutting stories that turn profitable, they are not my favorite investments. Now I must make clear we are not married to these price target ranges, and their are other things that go into them that are kind of subjective (my gut feeling). The reason why we are not married is sometimes we make a mistake and the stock simply will never live up to expectation, consequently earnings could go through the roof and stock could then be worth twice what you high end price range is so we don't want to corner ourselves into a price range to sell a stock, but rather just use it as a guide to help us determine what investments are better for us to make.
I generally invest in the value microcap arena, and am a rather frequent poster on the value microcaps board. I tend to believe that value microcaps are the way to go, and have been pretty successful with them. I tend to invest in small companies with pe less then 10 that are growing earnings and revenues. I generally hold between 10-20 stocks in my portfolio at anytime. And currently that goes up and down, when I find opportunites in the market, or stocks have become fully valued in my opinion then I sell them. I'm not using the buy & hold strategy, and I'm not day trading either I'm rather just waiting for the valuation of a stock to be reached, once it does that I'm gone.
Currently I hold a cash position of about 53% that tells you a little bit of how I currently feel about the market. From the fallin dollar, to rising oil prices, to the rising deficit, to the threat of inflation spiking, and the FED raising rates higher then anyone may expect. These things are what the market is dealing with, and it doesn't mean all of these bad things will continue to play out or get worse, but they are all a risk to the market, so therefore a risk to the individual stocks one holds. Generally though I keep around a 20-25% cash position when I'm feeling good about the market, and about 10-15% when I'm really bullish. And although those market moving events are part of the reason why I'm in so much cash, the other part of the reason is it is getting a little harder to find value microcaps that meet my criteria then is was 2 years ago to find them. However, that doesn't mean they can't be found because their are enough opportunities out there in my opinion. I must admit I do buy a lot of the OTC securites, but do not buy pinks, because they are much more risky in my opinion.To give you an idea of the types of stocks I mean by this CGNW.ob is a value microcap, but that fits under the cost cutting mold, more then the revenues, and business growing. The reason why we like this is if the second half of their fiscal year duplicates the first half the stock is basically at 3.6 times earnings, which is too low and should be trading at 7 or 8 times in my opinion and if we get some growth (we are getting a little, but need more then we might get a multiple of 10-12). Where companies such at PDGE.ob and IMPL.ob are more about growing revenues and earning through growth of their businesses obviously their trading at higher pe about 10.5 and 8 respectively from a trailing perspective.These stocks, because of the growth they are experiancing deserve more of a 10-15 pe. So these stock give you a little idea of what my strategy is in terms of actual stocks. The last thing I want to tell everyone is you need do a lot of DD in the value microcaps arena or any stock type for that matter, you just can't buy something because someone says so, even if they have a great track record. If you do this you will most likely get burned, and although a lot of people like to blame others they should be truely blaming themselves if this occurs.
This gives you the structure of my strategy as well as some current feelings on the market, yet should be considered pretty broadly, because if I really explained myself I'd be writing a book. LOL. Keep in mind all of this is just my humble opinion.
SSKILLZ - good idea for a board.
I am and have been for awhile, a Bob Brinker follower. I mostly follow his timing model and for the bulk of my investments, am more than happy to get total market returns, while avoiding the major selloffs. These 5-10% corrections are not what he plays, to hard to jump in and out of them. I see no reason to switch from this strategy until he retires, or it starts to fail me.
Value Micro's are a sideline at this point for me and may eventually grow to a larger portion of the portfolio as time and interest allow. Family first (very little time required to do his strategy), Microcap research second!!!!
Good Luck all...
Definitely go with OIL and ONLINE POKER GAMES:
Oil stocks: QOIL, ABLE, GEOI, FUEL etc
http://www.investorshub.com/boards/board.asp?board_id=3735
Online Poker games: BGTO, GGTS
SSKILL:
Good to see this. I will probably do a comprehensive statement about my overall strategy just so that it is in one place and I can refer to it in the future. This is a good place for that.
You need to post a link on VMC.
Len
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