Forgot I had a GTC order in and got taken out @.92

in ACST @ .54 for a bounce, down over 30@ on trial update news. Could have bought @ .58 when the trial issue was first announced (1-13) and went up to over .75.

How penny stocks work:

http://www.techlawjournal.com/seclaw/81029.htm

Use of interstate commerce for purpose of offering for sale

It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof.

http://taft.law.uc.edu/CCL/33Act/sec17.html

Looks like that was a boneheaded move. We'll see how it plays out I guess.

Picked up 200K STHG @ .0031 on the news

Back out @ .007. Didn't turn out so bad after all.

This ones gonna end up bad. Slap fingers....sell dammit, don't hold.

In ASFX @ .0034. Way late to the party but think it might go farther.

Changed my mind, back out @ 4.43 ,happy with the gain for a 1 day trade. 1575 shares, around $950 profit after comms.

Picked up some CROX @ 3.80, should have been buying sooner but longer term (6 months or so) should be good.

hitman,

MDIN hasn't split yet, but could come @ any time with no warning...meaning it would be strictly a gamble that the house could call you on at any time. Very risky.

Others like PDMI? Not off the top of my head. What got my interest in it was the convergence of lots of new posters in a short period of time. I already had it in my favorites so when I saw that I knew there was a good possibility of something happening. Even I didn't think it was going to go as far as it did and almost pulled the trigger yesterday when it looked like it was stalling out. Again more posters showed up so I took the gamble and held off. Sold out right before the close because I'd made out good and not trying to be the "greedy hog who gets slaughtered".

I don't play the pennies very much any more, but if I see a promo starting or, like I said before, a bunch of new posters showing up before a run, then I might throw a little at it.

I don't follow any pennies enough to make a recommendation to buy one.

mdin is @ triple 01 has the reverse split happened yet.

Do you know of any others like pdmi

my e-mail address is hitman0020@live.com

Don't typically give that out...especially without knowing to whom & why. If you have something to ask, you can do so here, nobody reads this board, lol.

Can I have your e-mail address please

Back out @ .0039. Don't trust it.

Picked up INAR @ .0037 -shakerzz promo

Back out @ 1.07 for a quick $500-comms

In GNBT @ .97, 5K shares.

Fucked up that this was deleted. It goes right to the core of what the defendants were charged for...

Blatant manipulation.



It's ok, I have a copy....

Deleted...Imagine that...

Post Date: 5/27/2009 2:43:08 AM in reply to 38146834 by uranium-pinto-beans
Board: SEC Charges Eight Participants in Penny Stock Manipulation Ring Reason: Off-Topic
I've been on boards you've railroaded before, so you know exactly what I'm talking about.

Taken out of DYN @ 1.55 by a limit order

In for more DYN @ 1.28, looks like it could have a good bounce.

Advice for Young Investors
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Delicious Digg Facebook Fark Newsvine Reddit StumbleUpon Technorati Yahoo! Bookmarks Print By Ben Steverman Ben Steverman – Thu Feb 12, 8:08 am ETRelated Quotes Symbol Price Change
^DJI 7,845.55 -93.98
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Two 22-year-olds are just starting their careers and beginning to save and invest. One devotes half his salary to quickly paying off student loans, with the goal of saving money to travel the world. The other dabbles in stocks, while planning to buy a home. Which one is starting out on the right foot? Neither? Both?

Learning to invest is hard enough. Now try doing it during the worst recession in a generation and the biggest financial crisis in a lifetime. If you're a young person with money to invest, however, you can consider yourself lucky. You have income at a time when the jobless rate is rising rapidly. If you're just starting out, you avoided -- so far -- huge losses of the sort that drastically changed the retirement plans of many baby boomer parents.

No Easy Answers

But the current environment naturally leaves a beginner confused about how to invest. The tough housing market means real estate looks cheap, but it's also an unreliable investment. After the financial market's problems of the past year, the same can be said for stocks, bonds, and other investments. Are they a bargain or a dangerous trap? At the same time, the financial crisis and widespread layoffs seem to argue for playing it safe. But how much cash can really fit into your piggybank or under your mattress?

BusinessWeek asked experienced financial advisers for some advice to young investors. Experts don't always agree, but all agreed on one piece of wisdom: There is no easy answer. The right investing plan depends on your personality and your short-term and long-term goals, advisers say. Consider the two young investors mentioned above. On the surface, they're similar, but they're going about saving and investing very differently.

Alex Engelman is 22 and works at a market strategy consulting firm near Burlington, Vt. He distrusts the stock market and he doesn't plan to buy a home anytime soon. "I'm all about mobility in my twenties," he says. Instead, Engelman plows half of his income toward one goal -- paying off student loans that once totaled more than $20,000. "I don't want debt hanging over my shoulder," he says. When the loans are paid off -- before the end of the year -- he'll start saving cash so he can pack up and travel.

Robin Jordan, also 22, works in marketing at a retirement planning firm in Santa Barbara, Calif. He doesn't plan to move away anytime soon, and is seriously considering buying real estate. "The rent I'm paying right now to live in downtown Santa Barbara is more than the monthly payment on my parents' mortgage in northern California," he says. "I look at home ownership more as an investment than as a lifelong commitment," he adds. Meanwhile, Jordan is also starting to dabble in stock investing -- setting aside 20% to 30% of his savings to buy individual stocks and another 50% for broad index funds. He's trying to diversify his portfolio, but has noticed that's hard to do because many funds require minimum contributions.

Both young men may be pursuing plans that are perfect for their particular circumstances. There are, however, some general principles of investing and saving that it pays to be aware of. Advisers offer these tips:

1. Cash, cash, cash. Both Engelman and Jordan said they're not yet saving much cash from month to month. However, nearly every financial planner will tell clients the first priority is an emergency cash fund. Before you can invest for the long term, you need enough to cover your current needs, they say. It's important not just if you lose your job, but for covering any eventuality from a major car repair or moving expenses to a pet's -- or your own -- surgery. For years, many clients resisted this advice, says Leisa Brown Aiken of Timothy Financial Counsel in Chicago. They preferred to be making money in the stock market or spending more on a future or existing home. Now that stocks and home prices have been pummeled, there's been "a big sea change" in attitudes, Aiken says.

The insecurity of many jobs these days also prompts more saving. "People are getting wise: You've got to have money in the bank," says Robert Timineri of Total Return Advisory in Oroville, Calif. The goal is keeping the cash handy so you can get it in an emergency. Many online banks pay out relatively generous interest rates on savings accounts.

But how much to save? A bare minimum starting point is one month of expenses, but ideally a fund should cover three to six months of expenses. Timineri used to advise each adult should have ready access to $10,000 in cash, but, because of the bad economy, he has boosted that to $15,000 to $20,000.

2. Enough insurance? One other base that needs to be covered before serious investing starts is insurance. Robert Oliver of Oliver Financial Planning in Ann Arbor, Mich., says most young people don't have enough disability insurance, which covers living expenses in case you're injured and can't work. "As younger people, your main asset is yourself, your ability to earn over a lifetime," Oliver says. A disability puts that in jeopardy, but the basic disability insurance offered by employers is rarely adequate, he says.

3. Should you buy a home? This might look like a great time to buy real estate. Home prices are falling, mortgage rates are low, and Congress is debating rich incentives for first-time homebuyers as part of the pending economic stimulus package.

But there are problems: Credit standards are tighter and it's harder to get a mortgage by putting only 5% or 10% down, a practice that was common a couple years ago. Also, if your job situation is tenuous, this might not be a good time to take on a heavy debt load. Using your emergency cash fund for your down payment defeats the purpose of such funds. Plus, you'll probably need that cash once you move in. "Owning a home is expensive," says Paula Hogan of Hogan Financial Management in Milwaukee. Maintenance on average costs 1% of the value of the home each year. "That can take a new homeowner by surprise," she says. The housing bubble misled many Americans about real estate investing. Taking into account maintenance and the long history of home values in the U.S., the annual return on a home might be only 1%, says Kristopher Johnson of Timothy Financial Counsel in Wheaton, Ill. A home purchase might be the right choice, but it's often a decision made for nonfinancial reasons. "I view my home as an expense," Johnson says. "I need a place to live."

4. How secure is your job? The U.S. unemployment rate is inching higher every month, with thousands of layoffs announced each week in a range of industries. "At this point, I don't think anyone's job is secure," says Jorie Johnson of Financial Futures in Manasquan, N.J. Even teachers are facing layoffs. "Anyone who feels too comfortable is doing themselves a disservice."

The security of your job matters because it affects how much risk you should feel free to take in your investing portfolio and how much cash you should hold. One oft-repeated guideline, says Aiken: "Is your earnings stream more like a bond or a stock?" Though the financial crisis put these distinctions to a test, bonds are supposed to be reliable, while stocks can be volatile and unpredictable. A person or couple with jobs that fit in the bond category can afford to take on more risk in their investments.

5. How much risk can you handle? If you're saving for the long term, you probably have time to ride out market turbulence and, in 30 or 40 years, rack up some nice gains even from risky investments. That's how it's supposed to work in the abstract, anyway. In reality, the ups and downs of the market can leave you anxious and cause you to bail out of investments too early. "Some can't take the heat," Kris Johnson says.

Thus, the amount you should invest in, for example, risky stocks is driven partly by your personality, Jorie Johnson says. Lately, investors have gotten a taste of just how bad conditions can get. "The last six months have been a good test of risk tolerance," Oliver says. If you can't sleep at night when your nest egg loses 40% of its value, a more conservative portfolio -- for example, more bonds and less stocks -- may help. Engelman, for example, admits equity investing doesn't fit his personality. To him, he says, "There's something intrinsically unreliable about it."

6. Equities are risky. Equities, or stocks, do better than most other investments over the long term. The problem is that equities sometimes go through long periods -- the 1930s, the 1970s, the past decade -- when values barely budge and even fall substantially. That has sparked debate over how appropriate it is to risk retirement funds in the stock market, and, if so, what portion of a portfolio should consist of these risky assets.

Any amount of money you need soon, i.e., in the next five or ten years, should not be in stocks, advisers say. Even a decade is too short of a period for some conservative investors.

Young people have an advantage here because they have longer until retirement. Jordan says he doesn't mind betting on stocks because "while I'm young, I still have time to recover those losses." For young people in their twenties, 50% or more of a 401(k) or other retirement plan could go into equities. But, says Aiken: "The key is not time period, but the resiliency of their ability to earn income." Young people have decades to earn back money lost in bad years like 2008.

The classic antidote to the riskiness of equities is bonds. However, that didn't work last year. Funds based on U.S. Treasuries -- safe government debt -- saw outsize gains, while corporate bond funds registered huge losses. "A lot of people got caught by surprise," Jorie Johnson said. Bonds may return to their calmer behavior eventually, but in the meantime bank certificates of deposits and inflation-protected Treasuries, or TIPS, are other safe alternatives.

7. Get started. Retirement can feel like a long time from now, but money invested now can compound year after year. "Compounding is a very powerful thing," Oliver says. "Even if it's just a small amount, time is your biggest ally." Also, young investors can learn and even make mistakes while the stakes are still low, Hogan says. Almost all experts advise clients to take full advantage of an employer that matches retirement contributions. Doing otherwise is leaving money on the table. Jorie Johnson advises saving 10% of your income no matter what. Get started now, because while your income may rise in the future, so will your responsibilities and spending, she says.

8. Do everything. "It's important to do everything," Jorie Johnson says. This means you've got to juggle it all, financially: pay down debt while saving for both short-term and long-term needs. "You have to make sure that every month you're putting money aside for each goal," she adds. Without that balanced approach, you're likely to focus on one goal -- like buying a house -- and never meet the others -- like setting up an emergency fund or saving for retirement.

9. Be flexible. Timineri, who advocates setting aside a larger-than-usual cash reserve, says the financial crisis and stock market collapse have changed the rules for investors. "I don't have the faith that I used to have (in the financial system)," he says. For now, he's allocating a maximum of only 50% of portfolios to stocks, and telling clients to wait before making any major moves. "No one thinks this is going to be over in a couple months," he says. In other words, this may not be the time to set up a financial plan that you stick with for life. A little caution and flexibility may be warranted for the time being.

10. Can you save and invest too much? It's rare that young people can set aside too much money for the future, advisers say. More often, clients need to be reminded of the risks of saving too little. "If you don't save (a certain) amount, you're never going to be able to stop working," Aiken tells clients. "That often motivates them."

But how do you balance your present happiness with future needs? Bob Smrekar of Wade Financial Group in Minneapolis says some clients save very aggressively, living a lean lifestyle because they want to retire by age 55. "If that's what their goals are and that's what they want to do, more power to them," he says. Other of his clients prefer to travel while they're young and healthy, even if they're well aware that expensive trips may delay their retirement.

Obviously, advisers say, it makes sense to spend now on college or graduate school. Even if it delays the start of your retirement investing, another educational degree could add substantially to your income over a lifetime. "Your life today is just as important as your life in retirement," Oliver says. "But the difference is you're not going to have some earned income in retirement. It's all about that trade-off."

With each paycheck, young investors must weigh a variety of goals, for the present and into the future, against each other. It's a balancing act made even more difficult by these unstable times.

NG (S) - AGLV .0001

MSG#35149023

Posted by: sludgehound Date: Friday, November 14, 2008 1:27:04 PM
In reply to: None Post # of 6921

humor defined for debased Pennies

PENNY STOCK PLAYERS DICTIONARY

AF's - Audited Financials; documents so rare, so precious, that mere mention of their future appearance can cause spectacular price appreciation (See also: Next Week).

Available Funds - a number inversely proportional to the investment merits of the stock you are considering for purchase.

Average Down - what to do when your stock has dropped far below your Mental Stop.

Basher - the ultimate compliment; a person of considerable wealth, wit and skepticism. Will never critique a bad stock, only good ones. (See also: Paid Basher)

Big News - the cause of much anticipation among Stuckholders; if and when released, causes massive Naked Shorting, which is the only way the Market Makers can prevent the price from rising (to the Moon).

Boca Raton - an island of integrity and sound financial advice in the Florida swamps.

Boiler Room - an old documentary about the lost art of reeling in a Sucker by telephone.

Cellar Boxing - a game played by Market Makers when they get bored with pulling the wings off flies.

Cert - an official-looking document that proves you lost money.

Cert Pull - a reliable way to insure that Stuckholders remain so.

Credit Card - an excellent source of funds for non-marginable Emerging Growth Stocks

DD - the process by which you convince yourself to buy a bad stock (courtesy of "serfdom").

Economic Darwinism - the process by which Pink Sheet Stuckholders are relieved of their money and removed from the financial ecosystem, thus insuring that they will never become wealthy enough to cause real damage.

Emerging Growth Company - an implausible story about a hypothetical business.

Emerging Growth Stock - a scam.

Ex-clearing - the red button on the trading terminals of all Hedge Funds that allows a trader to manipulate a single stock, or the entire market, yet avoid detection by any compliance, audit, regulatory or taxation authority.

God Bless (when used at the end of a letter to shareholders, subscribers, etc.) - proof that the author is sincere about wanting to take your money, reluctant to serve a prison sentence, or both.

Greenwich, CT - Hedge Fund capital of the world, home to many Naked Short Sellers; the only portal into Hades with regular train service from mid-town Manhattan.

Gullibler - see Sucker

Gut Feeling - (before you buy an Emerging Growth Stock): a hunch that this will finally be the multi-bagger you have been searching for; (after you buy an Emerging Growth Stock): the urge to vomit.

Hedge Fund - any group of two or more people with more money and brains than you.

Investor Relations - a liar who is unable to hold down a steady job.

JV - an arrangement between the promoters of two or more Emerging Growth Stocks, with the sole intention of inducing Suckers to buy, and shorts to cover; a meaningless document.

Janet Shell - part cyber-sleuth, part vampire, she clones rats in a secret underground lair and can destroy an Emerging Growth Stock by simply moving her fingers. Sued by the SEC, Amazon and Business Week, she fled her Texas trailer park and is now living in exile in the former Soviet republic of Italy.

Letter of Intent - a letter sent by one party to a second party, usually made public with the sole intention of inducing many third parties to purchase an Emerging Growth Stock. (See also: MOU, JV, Big News, Next Week)

Level II - an electronic stream of data that will enable you to lose more money, faster than ever before.

Locked and Loaded - "I have doubled down more than once on this pig, and if it doesn't go back up very soon, I am in deep, deep trouble…"

Long and Strong - "My irrational belief in this dishonest promotion will not be shaken by assertions of fact."

MM - Market Maker; the Ferrari-driving 24 year-old who emptied your account, one trade at a time.

MOASS - the Mother of All Short Squeezes; when predicted as imminent, a guarantee that your stock will drift lower for the rest of time.

MOU - a letter sent by one liar to another.

Margin - a quicker way to send your entire portfolio to Money Heaven.

Margin Call - the market's way of telling you to stop trading and buy no-load mutual funds.

Melchizidek - a business-friendly domicile for Emerging Growth Companies (see also: Utah)

Mental Stop - an arbitrary point below your purchase price, and always adjusted down to be below the current quote. (See also: Stop Loss)

Mine - a hole in the ground with a liar at the top (Mark Twain).

Mining Company - a group of liars.

Mining Company (Exploration Stage) - a group of liars who have not yet agreed what to lie about.

Mining Company Stock - expensive toilet paper.

Money Heaven: the final resting place for the capital of retail Spec-o-lators. (See also Greenwich, CT.)

Money TV - a platform for fraudulent stock promotion, hosted by paid shill and convicted goat-fucker, Donald Baillargeon.

Moon - frequently-promised price-point for Emerging Growth Stocks; a mineral-rich celestial body, ripe for exploration by Mining Companies.

NSS (Naked Short Selling) - a helpful service provided by Market Makers to lower the price of your stock, so you can buy more at bargain levels (in time for the MOASS).

Next Week - the time frame for the release of the Big News. Always Next Week, never This Week.

NITE - Knight Trading, the largest Market Maker of Emerging Growth Stocks, and the party responsible for your lack of investment acumen and poor trading skills.

OS - Outstanding Shares, like the National Debt, a large and ever-increasing number, but with more immediate negative effect on Stuckholders' wealth.

Optomistic - this mis-spelling of the word optimistic reliably indicates the victim has not yet realized the extent of his losses, or the depths to which the company's management or IR person will go to deceive him.

Paid Basher - one already rich from not wasting their capital on Emerging Growth Stocks, and able to pull down many additional billions by criticizing YOUR stock.

Penny Stock - a business so unprofitable, so mis-managed, so dishonest, that no bank or VC would lend them a cent (see also: Emerging Growth Stock, Mining Company).

Penny Stockholm Syndrome - the love that dare not show a spouse the brokerage statement (see also: True Long).

Pink Sheets - an electronic stock exhange whose secret objective is the transfer of wealth from Suckers to Hedge Funds and executives of Emerging Growth Companies.

Positive DD - what the CEO/promoter/IR person tells you on the phone (but is unable to put in writing); frequently involves Big News, which may arrive as early as Next Week.

Press Release - (when issued by a Real Company) an announcement of material interest to the financial community, intended to goose the stock price; (when issued by an Emerging Growth Company) a collection of exaggerations, lies and errors of omission, intended to goose the stock price.

Reverse Split - the market's way of letting you know your stock is a loser.

SEC - huge, lavishly-funded regulatory agency, whose secret objective is the transfer of wealth from Suckers to Hedge Funds.

Short - the natural enemy of the Sucker;

Short, Naked - see NSS

Spec-o-late - to throw one's capital down the Stinky Pinky Toilet; to engage in wild financial fantasies that will never be realized.

Steve Cohen - (pronounced: Cth'ul'hu) Hedge Fund manager and notorious Short; very camera-shy, due to the fact that he has actual horns growing from his head.

Stinky Pinky - see Emerging Growth Stock

Stinky Pinky Toilet: the place your money goes. (See also: Money Heaven)

Stop Loss - an invitation to a Market Maker to take your money.

Stuckholder - holder of a position in a Stinky Pinky where the proceeds from selling would be less than the commission.

Sucker - anyone long a Penny Stock for longer than it takes to go to the bathroom.

Things that make you go HMMMMMM - prelude or finale to a message-board post consisting of well-researched links that clearly prove the price weakness in a particular Stinky Pinky is due to a vast conspiracy by a secret alliance of Hedge Funds, Market Makers, central banks, the supreme court, Raging Bull, Paid Bashers, the Vatican, the SEC and DTCC, the House of Saud, George Soros, the Smoking Man, etc.

Time Travel - a technology found only in the business plans of Emerging Growth Companies.

Trailing Stop - a trading technique designed to protect profits, seldom needed by investors in Emerging Growth Stocks.

True Long - the con man's best friend.

Utah - a business-friendly domicile for Emerging Growth Stocks.

Vancouver - a street in Canada where your broker worked before he moved to Boca Raton

Wall St - a really old movie with Michael Douglas that portrays the softer, more sentimental side of finance (see also: Boiler Room).

Zero Bid - the market's way of letting you know your stock is a loser.

http://freedomfunds.net/edu/pinkdict.html

Added more ARGN @ 2.66 today.

Should have held the WMB, but oh well, profit is profit. 20.50 today.

Out WMB @ 18.30 & DYN @ 3.78

And final position @ 2.04 This is for long term. Average should be about 2.60 now.

More ETFC @ 2.87

Got WMB @ 15.90 & DYN @2.91

Gotta try some more ETFC @ 3.18

Posted by: timhyma
In reply to: None Date:5/13/2008 7:05:31 AM
Post #of 37199

Repost from the big board:

Why Investors Fail

by John Mauldin
May 9, 2008

In this issue:
Why Investors Fail: Analyzing Risk
Investors Behaving Badly
Tails You Lose, Heads I Win
Ergodicity
Why Investors Fail
Becoming a Top 20% Investor
Investors Behaving Badly
South Africa, Laguna Beach, and Canada


This week I am in South Africa and am not as connected as I would like to be due to meetings and slow Internet, so we are going to look at some material from my book, Bull's Eye Investing, which I think is more pertinent than ever. And since lately there has been rather large growth in the readership, there are a significant number of new readers for whom this material will be fresh. When I originally wrote much of this, the markets were coming out of the bear phase of 2001-2. I am adding a few comments in [brackets]. I trust you will find value as we look at the problems that investors face in the struggle to maximize portfolio value.

Like all the children from Lake Wobegon, I am sure all my readers are above-average investors. But I am also sure you have friends who are not, so in this chapter we will look at the reasons why they fail at investing, and how they should analyze funds and determine risk. Hopefully this will give you some ways to help them. I will show you a simple way to put yourself in the top 20% of investors. This should make it easier to go to family reunions and listen to your brother-in-law's stories.

A big part of successful Bull's Eye Investing is simply avoiding the mistakes that the large majority of investors make. I can give you all the techniques, trading tips, fund recommendations, forecasts, and so on; but you must still keep away from the patterns which are typical of failed investors.

What I want to do in this section is give you an "aha!" moment: that insight which helps you understand something about the mysteries of the marketplace. We will look at a number of seemingly random ideas and concepts, and then see what conclusions we can draw. Let's jump in.

Investors Behaving Badly
The Financial Research Corporation released a study prior to the [2001-02] bear market which showed that the average mutual fund's three-year return was 10.92%, while the average investor in those same periods gained only 8.7%. The reason was simple: investors were chasing the hot sectors and funds.

If you study just the last three years, my guess is those numbers will be worse. "The study found that the current average holding period was around 2.9 years for a typical investor, which is significantly shorter than the 5.5-year holding period of just five years ago.

[While the research below is from a few years ago, recent studies show exactly the same, if not worse, results. Investors in general are not getting any better.]

"Many investors are purchasing funds based on past performance, usually when the fund is at or near its peak. For example, $91 billion of new cash flowed into funds just after they experienced their "best performing" quarter. In contrast, only $6.5 billion in new money flowed into funds after their worst performing quarter." (from a newsletter by Dunham and Associates)

I have seen numerous studies similar to the one above. They all show the same thing: that the average investor does not get average performance. Many studies show statistics which are much worse.

The study also showed something I had observed anecdotally, for which there was no evidence. Past performance was a good predictor of future relative performance in the fixed-income markets and international equity (stock) funds, but there was no statistically significant way to rely on past performance in the domestic (US) stock equity mutual funds. I will comment on why I believe this is so later on.

"The oft-repeated legal disclosure that past performance is no guarantee of future results is true at two levels:

1. Absolute returns cannot be guaranteed with any confidence. There is too much variability for each broad asset class over multiple time periods. Stocks in general may provide 5-10% returns during one decade, 10-20% during the next decade, and then return back to the 5-10% range.

2. Absolute rankings also cannot be predicted with any certainty. This is caused by too much relative variability within specific investment objectives. #1 funds can regress to the average or fall far below the average over subsequent periods, replaced by funds that may have had very low rankings at the start. The higher the ranking and the more narrowly you define that ranking (i.e. #1 vs. top-decile [top 10%] vs. top quartile [top 25%] vs. top half), the more unlikely it is that a fund can repeat at that level. It is extremely unlikely to repeat as #1 in an objective with more than a few funds. It is very difficult to repeat in the top decile, challenging to repeat in the top quartile, and roughly a coin toss to repeat in the top half." (Financial Research Center)

This is in line with a study from the National Bureau of Economic Research. Only a very small percentage of companies can show merely above-average earnings growth for 10 years in a row. The percentage is not more than you would expect from simply random circumstances.

The chances of you picking a stock today that will be in the top 25% of all companies every year for the next ten years are 1 in 50 or worse. In fact, the longer a company shows positive earnings growth and outstanding performance, the more likely it is to have an off year. Being on top for an extended period of time is an extremely difficult feat.

Yet, what is the basis for most stock analysts' predictions? Past performance and the optimistic projections of a management that gets compensated with stock options. What CEO will tell you his stock is overpriced? His staff and board will kill him, as their options will be worthless. Analysts make the fatally flawed assumption that because a company has grown 25% a year for five years that it will do so for the next five. The actual results for the last 50 years show the likelihood of that happening is very small.

Tails You Lose, Heads I Win
I cannot recommend highly enough a marvelous book by Nassim Nicholas Taleb, called Fooled by Randomness. The sub-title is "The Hidden Role of Chance in the Markets and in Life." I consider it essential reading for all investors, and would go so far as to say that you should not invest in anything without reading this book. He looks at the role of chance in the marketplace. Taleb is a man who is obsessed with the role of chance, and he gives us a very thorough treatment. He also has a gift for expressing complex statistical problems in a very understandable manner. I intend to read the last half of this book at least once a year to remind me of some of these principles. Let's look at just a few of his thoughts.

Assume you have 10,000 people who flip a coin once a year. After five years, you will have 313 people who have come up with heads five times in a row. If you put suits on them and sit them in glass offices, call them a mutual or a hedge fund, they will be managing a billion dollars. They will absolutely believe they have figured out the secret to investing that all the other losers haven't discerned. Their seven-figure salaries prove it.

The next year, 157 of them will blow up. With my power of analysis, I can predict which one will blow up. It will be the one in which you invest!

Ergodicity
In the mutual fund and hedge fund world, one of the continual issues of reporting returns is something called "survivorship bias." Let's say you start with a universe of 1,000 funds. After five years, only 800 of those funds are still in business. The other 200 had dismal results, were unable to attract money, and simply folded.

If you look at the annual returns of the 800 funds, you get one average number. But if you add in the returns of the 200 failures, the average return is much lower. The databases most statistics are based upon only look at the survivors. This sets up false expectations for investors, as it raises the average.

Taleb gave me an insight for which I will always be grateful. He points out that because of chance and survivorship bias, investors are only likely to find out about the winners. Indeed, who goes around trying to sell you the losers? The likelihood of being shown an investment or a stock which has flipped heads five times in a row are very high. But chances are, that hot investment you are shown is a result of randomness. You are much more likely to have success hunting on your own. The exception, of course, would be my clients. (Note to regulators: that last sentence is a literary device called a weak attempt at humor. It is not meant to be taken literally.)

That brings us to the principle of Ergodicity, "...namely, that time will eliminate the annoying effects of randomness. Looking forward, in spite of the fact that these managers were profitable in the past five years, we expect them to break even in any future time period. They will fare no better than those of the initial cohort who failed earlier in the exercise. Ah, the long term." (Taleb)

Why Investors Fail
While the professionals typically explain their problems in very creative ways, the mistakes that most of us make are much more mundane. First and foremost is chasing performance. Study after study shows the average investor does much worse than the average mutual fund, as they switch from their poorly performing fund to the latest hot fund, just as it turns down.

Mark Finn of Vantage Consulting has spent years analyzing trading systems. He is a consultant to large pension funds and Fortune 500 companies. He is one of the more astute analysts of trading systems, managers, and funds that I know. He has put more start-up managers into business than perhaps anyone in the fund management world. He has a gift for finding new talent and deciding if their "ideas" have investment merit.

He has a team of certifiable mathematical geniuses working for him. They have access to the best pattern-recognition software available. They have run price data through every conceivable program, and come away with this conclusion:

Past performance is not indicative of future results.

Actually, Mark says it more bluntly: Past performance is pretty much worthless when it comes to trying to figure out the future. The best use of past performance is to determine how a manager behaved in a particular set of prior circumstances.

Yet investors read that past performance is not indicative of future results, and then promptly ignore it. It is like reading statements at McDonalds that coffee is hot. We don't pay attention.

Chasing the latest hot fund usually means you are now in a fund that is close to reaching its peak, and will soon top out. Generally that is shortly after you invest.

What do Finn and his team tell us does work? Fundamentals, fundamentals, fundamentals. As they look at scores of managers each year, the common thread for success is how they incorporate some set of fundamental analysis patterns into their systems.

This is consistent with work done by Dr. Gary Hirst, one of my favorite analysts and fund managers. In 1991, he began to look at technical analysis. He spent huge sums on computers and programming, analyzing a variety of technical analysis systems. Let me quote him on the results of his research:

"I had heard about technical analysis and chart patterns, and looking at this stuff I would say, what kind of voodoo is this? I was very, very skeptical that technical analysis had value. So I used the computers to check it out, and what I learned was that there was, in fact, no useful reality there. Statistically and mathematically all these tools -- stochastics, RSI, chart patterns, Elliot Wave, and so on -- just don't work. If you code any of these rigorously into a computer and test them they produce no statistical basis for making money; they're just wishful thinking. But I did find one thing that worked. In fact almost all technical analysis can be reduced to this one thing, though most people don't realize it: the distributions of returns are not normal; they are skewed and have "fat tails." In other words, markets do produce profitable trends. Sure, I found things that work over the short term, systems that work for five or ten years but then fail miserably. Everything you made, you gave back. Over the long term, trends are where the money is."

Becoming a Top 20% Investor
Over very long periods of time, the average stock will grow at about 7% a year, which is GDP growth plus dividends plus inflation. This is logical when you think about it. How could all the companies in the country grow faster than the total economy? Some companies will grow faster than others, of course, but the average will be the above. There are numerous studies which demonstrate this. That means roughly 50% of the companies will outperform the average and 50% will lag.

The same is true for investors. By definition, 50% of you will not achieve the average; 10% of you will do really well; and 1% will get rich through investing. You will be the lucky ones who find Microsoft in 1982. You will tell yourself it was your ability. Most of us assign our good fortune to native skill and our losses to bad luck.

But we all try to be in the top 10%. Oh, how we try. The FRC study cited at the beginning shows how most of us look for success, and then get in, only to have gotten in at the top. In fact, trying to be in the top 10% or 20% is statistically one of the ways we find ourselves getting below-average returns over time. We might be successful for a while, but reversion to the mean will catch up.

Here is the very sad truth. The majority of investors in the top 10-20% in any given period are simply lucky. They have come up with heads five times in a row. Their ship came in. There are some good investors who actually do it with sweat and work, but they are not the majority. Want to make someone angry? Tell a manager that his (or her) fabulous track record appears to be random luck or that they simply caught a wave and rode it. Then duck.

By the way, is it luck or skill when an individual goes to work for a start-up company and is given stock in their 401k which grows at 10,000%? How many individuals work for companies where that didn't happen, or their stock options blew up (Enron)? I happen to lean toward Grace, rather than luck or skill, as an explanation; but this is not a theological treatise.

Read The Millionaire Next Door. Most millionaires make their money in business and/or by saving lots of money and living frugally. Very few make it simply by investing skill alone. Odds are that you will not be that person.

But I can tell you how to get in the top 20%. Or better, I will let FRC tell you, because they do it so well:

"For those who are not satisfied with simply beating the average over any given period, consider this: if an investor can consistently achieve slightly better than average returns each year over a 10-15 year period, then cumulatively over the full period they are likely to do better than roughly 80% or more of their peers. They may never have discovered a fund that ranked #1 over a subsequent one- or three-year period. That "failure," however, is more than offset by their having avoided options that dramatically underperformed. Avoiding short-term underperformance is the key to long-term outperformance.

"For those that are looking to find a new method of discerning the top ten funds for 2002, this study will prove frustrating. There are no magic short-cut solutions, and we urge our readers to abandon the illusive and ultimately counterproductive search for them. For those who are willing to restrain their short-term passions, embrace the virtue of being only slightly better than average, and wait for the benefits of this approach to compound into something much better..."

That's it. You simply have to be only slightly better than average each year to be in the top 20% at the end of the race. It is a whole lot easier to figure out how to do that than chase the top ten funds.

Of course, you could get lucky (or Blessed) and get one of the top ten funds. But recognize it for what it is and thank God (or your luck if you are agnostic) for His blessings.

I should point out that it takes a lot of work to be in the top 50% consistently. But it can be done. I don't see it as much as I would like, but I do see it.

Investing in a stock or a fund should not be like going to Vegas. When you put money with a manager or a fund, you should think as if you are investing in their management company. Ask yourself, "Is this someone I want to be in business with? Do I want him running my company? Does this company have a reasonable business objective? What is their edge that makes me think they will be above average? What is the reason I would think they could discern the difference between randomness and good management?"

When I meet a manager, and all he wants to do is talk about his track record, I find a way to quickly close the conversation. When they tell me they are trying to make the most they can, I head for the door. Maybe they are the real deal, but my experience says the odds are against it.

It's about not settling for being mediocre. Statistics and experience tell us that simply being consistently above average is damn hard work. When a fund is the number one fund, that is random. They had a good run or a good idea and it worked. Are they likely to repeat? No.

But being in the top 50% every year for ten years? That is NOT random. That is skill. That type of consistent solid management is what you should be looking for.

By the way, I mentioned at the beginning that past performance was statistically useful for ascertaining relative performance of certain types of funds like bond funds and international funds. In the fixed-income markets (bonds) everyone is dealing with the same instruments. Funds with lower overhead and skilled traders who aggressively watch their trading costs have an edge. That management skill shows up in consistently above-average relative returns.

Likewise, funds which do well in international investments tend to stay in the top brackets. That is because the skill set for international fund management is rare and the learning cost is high. In that world, local knowledge of the markets clearly adds value.

But in the US stock market, everybody knows everything everybody else does. Past performance is a very bad predictor of future results. If a fund does well in one year, it is possibly because they took some extra risks to do so, and eventually those risks will bite them and their investors. Maybe they were lucky and had two of their biggest holdings really go through the roof. Finding those monster winners is a hard thing to do for several years in a row. Plus, the US stock market is very cyclical, so that what goes up one year or even longer in a bubble market will not do well the next.

Investors Behaving Badly
Gavin McQuill of the Financial Research Center sent me his rather brilliant $5,000 report called "Investors Behaving Badly." He was the author and he did a great job. I read it over one weekend, and refer to it again from time to time.

Earlier we looked at a report which showed that over the last decade investors chased the hot mutual funds. The higher the markets went, the less likely it was that they would buy and hold. Investors consistently bought high and sold low. Investors made significantly less than the average mutual fund did.

McQuill focused on six emotions that cause investors to make these mistakes. You should read these and see whether some of them are familiar.

1. "Fear of Regret - An inability to accept that you've made a wrong decision, which leads to holding onto losers too long or selling winners too soon." This is part of a whole cycle of denial, anxiety, and depression. As with any difficult situation, we first deny there is a problem, and then get anxious as the problem does not go away or gets worse. Then we go into depression because we didn't take action earlier, and hope that something will come along and rescue us from the situation.

2. "Myopic loss aversion (a.k.a. as 'short-sightedness') - A fear of losing money and the subsequent inability to withstand short-term events and maintain a long-term perspective." Basically, this means we attach too much importance to day-to-day events, rather than looking at the big picture. Behavioral psychologists have determined that the fear of loss is the most important emotional factor in investor behavior.

Like investors chasing the latest hot fund, a news story or a bad day in the market becomes enough for the investor to extrapolate the recent event as the new trend which will stretch far into the future. In reality, most events are unimportant, and have little effect on the overall economy.

3. "Cognitive dissonance - The inability to change your opinion after new evidence contradicts your baseline assumption." Dissonance, whether musical or emotional, is uncomfortable. It is often easier to ignore the event or fact producing the dissonance rather than deal with it. We tell ourselves it is not meaningful, and go on our way. This is especially easy if our view is the accepted view. "Herd mentality" is a big force in the market.

4. "Overconfidence - People's tendency to overestimate their abilities relative to individuals possessing greater expertise." Professionals beat amateurs 99% of the time. The other 1% is luck. The famous Clint Eastwood line, "Do you feel lucky, punk? Well, do you?" comes to mind.

In sports, most of us know when we are outclassed. But as investors, we somehow think we can beat the pros, will always be in the top 10%, and any time we win it is because of our skills and good judgement. It is bad luck when we lose.

Commodity brokers know that the best customers are those who strike it rich in their first few trades. They are now convinced they possess the gift or the Holy Grail of trading systems. These are the people who will spend all their money trying to duplicate their initial success, in an effort to validate their obvious abilities. They also generate large commissions for their brokers.

5. "Anchoring - People's tendency to give too much credence to their most recent experience and to show reluctance to adjust their current beliefs." If you believe that NASDAQ stocks are the place to be, that becomes your anchor. No matter what new information comes your way, you are anchored in your belief. Your experience in 1999 shows you were right.

As Lord Keynes said so eloquently when forced to acknowledge a shift in a previous position he had taken, "Sir, the fact have changed, and when the facts change, I change. What do you do, sir?"

We expect the current trend to continue forever, and forget that all trends eventually regress to the mean. That is why investors still plunge into index funds, believing that stocks will go up over the long term. They think long term is two years. They do not understand that it will take years - maybe even a decade - for the process of reversion to the mean to complete its work.

6. "Representativeness - The tendency of people to see patterns within random events." Eric Frye did a great tongue-in-cheek article in The Daily Reckoning, a daily investment letter (www.dailyreckoning.com). He documented that each time Sports Illustrated used a model for the cover of their swimsuit issue who came from a new country that had never been represented on the cover before, the stock market of that country had always risen over a four-year period. This year, it is time to buy Argentinian stocks. Frye evidently did not do a correlation study on the size of the swimsuit against the eventual rise in the market. However, I am sure some statistician with more time on his hands than I do will brave that analysis.

Investors assume that items with a few similar traits are likely to be associated or identical, and start to see a pattern. McQuill gives us an example. Suzy is an English and environmental studies major. Most people, when asked if it is more likely that Suzy will become a librarian or work in the financial services industry, will choose librarian. They will be wrong. There are vastly more workers in the financial industry than there are librarians. Statistically, the probability is that she will work in the financial services industry, even though librarians are likely to be English majors.

South Africa, Laguna Beach, and Canada
South Africa is still on the top of my list of places I enjoy. Today I am speaking at a conference for 1,000 investment advisors at Sun City. Sun City is one of the most amazing conference facilities and hotel complexes I have ever been to. The vision to build this fabulous resort in the middle of the South African bush and then believe everyone would come is truly unique. The attention to detail on the art, decoration, landscaping, and the numerous entertainments is impressive. If you ever get the chance to come, you should take it. And let me take this time to thank partners Prieur du Plessis and Paul Stewart for being such good hosts, even if they do work me a little hard trying to get all the value from the time I am here.

At the end of the month, I will fly to Laguna Beach to spend a weekend at good friend Rob Arnott's annual thinkfest at Research Affiliates. That meeting is always one of the highlights of my year, both from the perspective of meeting old friends around great food and wine, and also for the sheer massive investment brainpower in the room. And in June I'll make a quick trip to Montreal to speak for Cannacord.

I am getting ready to speak now, so it is time to hit the send button. This afternoon we go on a game run in one of the better game parks, so we should see a wide variety of animals in the wild. Then Sunday we will be in Cape Town, and if the weather permits we will take a helicopter tour of the wine country. So, it is not all hard work. I am taking time to have some fun and smell some roses. And as I go through the years (I don't like to use the word old!), I more and more realize how important it is to enjoy where you are and not wait until some time in the future to get the most out of life.

And I hope you enjoy your week.

Your hoping to see the Big Five game animals this afternoon analyst,

John Mauldin
John@FrontLineThoughts.com

Copyright 2008 John Mauldin. All Rights Reserved

Note: The generic Accredited Investor E-letters are not an offering for any investment. It represents only the opinions of John Mauldin and Millennium Wave Investments. It is intended solely for accredited investors who have registered with Millennium Wave Investments and Altegris Investments at www.accreditedinvestor.ws or directly related websites and have been so registered for no less than 30 days. The Accredited Investor E-Letter is provided on a confidential basis, and subscribers to the Accredited Investor E-Letter are not to send this letter to anyone other than their professional investment counselors. Investors should discuss any investment with their personal investment counsel. John Mauldin is the President of Millennium Wave Advisors, LLC (MWA), which is an investment advisory firm registered with multiple states. John Mauldin is a registered representative of Millennium Wave Securities, LLC, (MWS), an FINRA registered broker-dealer. MWS is also a Commodity Pool Operator (CPO) and a Commodity Trading Advisor (CTA) registered with the CFTC, as well as an Introducing Broker (IB). Millennium Wave Investments is a dba of MWA LLC and MWS LLC. Millennium Wave Investments cooperates in the consulting on and marketing of private investment offerings with other independent firms such as Altegris Investments; Absolute Return Partners, LLP; Pro-Hedge Funds; EFG Capital International Corp; and Plexus Asset Management. Funds recommended by Mauldin may pay a portion of their fees to these independent firms, who will share 1/3 of those fees with MWS and thus with Mauldin. Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest with any CTA, fund, or program mentioned here or elsewhere. Before seeking any advisor's services or making an investment in a fund, investors must read and examine thoroughly the respective disclosure document or offering memorandum. Since these firms and Mauldin receive fees from the funds they recommend/market, they only recommend/market products with which they have been able to negotiate fee arrangements.



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Out TASR @ 7.83

Out ETFC @ 4.30

Trying some TASR @ 7.45

In ETFC @ 3.74

MGEN/Corey Ribotsky

http://www.thestreet.com/p/stocks/brokerages/10284937_2.html

http://www.forbes.com/free_forbes/2007/0212/064_2.html

http://www.secinfo.com/$/SEC/Name.asp?M=corey+s%2E+ribotsky&List=S#Signatory

Toxic Financing

http://investorshub.advfn.com/boards/read_msg.asp?message_id=25620524

CHNG - $10.00

$50 Jan target by BK.

The biggest player in the fiber-optic-cable business is Corning. (GLW) And it's a favorite among those who are bullish on fiber stocks. "Our biggest play there is Corning," says Kevin Landis, manager of Firsthand Technology Value fund.

Fiber options

Landis figures that Corning will benefit from the push to hook up households via optical fiber. He also thinks Corning will benefit from international growth. "Even though WorldCom deployed too much fiber across the Great Plains, that doesn't help China any."

Corning's stock performance hasn't lived up to its potential: It's up just 3.3% the past 12 months. Daniel Scalzi, CEO of Matrix USA, a Wall Street research firm, thinks the company has to shore up its balance sheet: "When you look at its profit margin and valuation, it doesn't work for us. They're spending a lot of money to make not enough money. That said, they're in a great business."

Ken Croft, manager of Croft-Leominster Value, suggests Cisco, which makes much of the equipment necessary for fiber-optic telecom. The stock has soared 40.8% over the past 12 months. But it isn't cheap: The stock is selling for 21.8 times its 2009 estimated earnings. (The price-earnings ratio tells you how expensive a stock is, relative to earnings. Lower is better.)

Another suggestion: General Cable, (BGC) which makes copper as well as fiber-optic cable. The stock has soared nearly 80% the past 12 months, and it sells for about 16 times its 2008 estimated earnings. But it's volatile: It's fallen about 15% the past three months.

A final possibility: Sumitomo Electric, a Japanese company with a fiber-optic-cable division.

In AETI @ 7.00

All dogs cut loose except MGEN which is due for a pump soon.

Had gotten more @ .025. Cut it all loose @ .008

Cut it loose @ .205

Cut it loose @ 1.77

While high-flying stocks often sport lofty P-E multiples, stocks with low multiples, sound fundamentals and positive price and volume action can deliver the goods too. More...



1. Tenaris (TS) - View IBD Stock Checkup
Composite Rating: 98.* The Luxembourg-based steel maker is threading around its 10-week moving average, consolidating a new base since mid-December. Sales growth has ranged from 9% to 50% in the past five quarters. Last month, it completed its $2.2 billion acquisition of oil and gas equipment maker Hydril P/E Ratio: 15.

2. Superior Energy Services (SPN) - View IBD Stock Checkup
Composite Rating: 98. The oil-field services provider continues to rebound from a pullback to its 50-day moving average. Mutual fund ownership of the firm has risen to 172 funds, up from 147 three quarters ago. Superior Energy has delivered earnings above analysts’ estimates for six straight quarters. P/E Ratio: 15.

3. BHP Billiton Ltd. (BHP) - View IBD Stock Checkup
Composite Rating: 98. Australia-based BHP is trading near record highs. It is the world’s largest mining company with about 38,000 employees and operations in 25 countries. It recently hired Merrill Lynch & Co. as an adviser to help it examine a possible bid for rival Alcan. P/E Ratio: 15.

4. Western Refining (WNR) - View IBD Stock Checkup
Composite Rating: 98. Late last month, the oil and gas refiner completed its $1.13 billion acquisition of Giant Industries, despite a last-minute attempt by regulators to block the deal. The transaction makes Western the fourth largest independent refiner in the U.S. P/E Ratio: 14.

5. Rio Tinto (RTP) - View IBD Stock Checkup
Composite Rating: 98. The U.K.-based mining company may be shaping a flat base. Last month, it joined forces with BP to form Hydrogen Energy, an alternative-energy company. The joint venture will first focus on using fossil fuels and carbon technologies to produce clean electricity. P/E Ratio: 14.

6. TBS International (TBSI) - View IBD Stock Checkup
Composite Rating: 98. Bermuda-based TBS International sailed to an all-time high this week. The company provides international tanker transportation services through a fleet of 33 vessels. Its profit growth fell for three straight quarters last year, but has since rebounded. In May, it reported a 93% jump in Q1 earnings, helped by a near 36% rise in average charter rates. P/E Ratio: 14.

7. Alon USA Energy (ALJ) - View IBD Stock Checkup
Composite Rating: 98. The Dallas-based company refines crude oil and markets fuel products under the FINA brand. It also runs over 160 7-Eleven stores under its Southwest Convenience Stores unit. The stock climbed to a record high this week. P/E Ratio: 14.

8. Ceradyne (CRDN) - View IBD Stock Checkup
Composite Rating: 97. Ceradyne makes a variety of ceramic armor systems for personal, vehicle, and aircraft use. The company also makes many components and products for the chemical, industrial and medical industries. Earlier this week, it opened a solar energy ceramic-related plant in China. P/E Ratio: 14.

9. Allis-Chalmers Energy (ALY) - View IBD Stock Checkup
Composite Rating: 98. Oil and gas field services company Allis-Chalmers Energy has been climbing since mid-April. It’s now 13% off its all-time high, notched six months ago. Its string of triple-digit profit growth ended in the most recent quarter, with a still-solid 78% gain. P/E Ratio: 13.

10. Delek US Holdings (DK) - View IBD Stock Checkup
Composite Rating: 97. The petroleum refiner recently ran up to an all-time high on heavy trade. Mutual fund ownership of the firm has more than doubled to 30 funds from 11 three quarters ago. The company has a three-year earnings growth rate of 218%. P/E Ratio: 13.


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*The IBD SmartSelect Composite Rating combines all five SmartSelect Ratings. Of the five, the Earnings Per Share Rating and Relative Price Strength Rating get the most weight; stocks’ percentage of their high price is also considered. Ratings are from 1-99, with 99 being the best.

GNBT @ 2.05 on Patent news