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Survey Indicates Strong Support for Renewable Energy:
http://www.renewableenergyaccess.com/rea/news/story?id=44495
<<Nine out of ten voters (91%) support the view that "the country is facing an energy crisis. Having reliable energy is fundamental to economic prosperity, our national security, and protecting the environment. We need more ambitious and creative thinking behind a new energy policy for the future.">>
Remember folks, every gallon of biofuel produced using soybean (our CKEI's involvement), or using many other raw (often waste residual) materials, means a gallon of oil less being burned. Plus, the biofuels "burn" a lot cleaner (much less COx, SOx, and NOx gases released into the athmosphere). The biofuel industry, and the whole producer to consumer chain (including CKEI) will do very well in the very near future.
All these folks that in their simplistic approach believe it's the "end of the world" just because CKEI is borrowing some money for future expansion, are probably part of the remaining 9%, that do not believe in, or understand why alternative energy is necessary, and that the industry is poised for an explosive growth.
Mike
Raven, let's see if next week we get the numbers for the month of March. If so, and if the numbers are good, hopefully we'll move for good above the 0.028 magical #. I also hope along with that PR we'll also have some forward looking statements explaining in more detail about the destination of those borrowed funds. Somehow, I got a good feeling about next week, and the future of this still tinny company.
Mike
Could it be possible?
From a Dec. 2005 PR: "We are pleased by our revenues, on track to top $20 million for the fiscal year, and the significant improvements we have made to our balance sheet," said Phil Hamilton, CEO.
The PR discussing the Q3 results on March 16, puts the first 9 months of this fiscal year @ $11.5MM.
Does this means the revenue for this (4-th) Q would approach $8.5MM? Could it be possible? That will be great!
Mike
Great job "Man4apenny." That's what I mean by a team effort. No time to look at it now, but I'll check it out this AN.
Mike
Stock,
I'm heavy loaded on both: CKEI @ IGAI.
Re: CKEI - hopefully next week will know more.
Re: IGAI - except for the lock of news, and the large very salaries salaries the Mgmt. give themselves, I don't see anything wrong with IGAI. Shall see.
PS: Talking about salaries for the Mgmt, I just compared the salaries of Mgmt people from SYTE to those of IGAI. No wonder the graphs, and the bottom line (net revenue) are so different on these two companies. Low salaries mean the Mgmt (e.g., SYTE)is more confident about the growth potential. On the other hand, percentage wise, IGAI insiders owe most of the shares. It's why (at this price) I still give them a chance.
Got to run,
Mike
***GVPB Board Picks:
Please do your own DD on any of them, and add your comments.
1. Lower risk, good return potential:
VFIN (among others, one of the MM's)- should report 10-K on Friday, March 31-st. P/S < 0.4! Money in the bank, EPS near positive for several Q's b4 the last. Good growth potential. Down today, on increased volume. What does it mean (if anything), anyone's guess.
GDVI - reported 10-Q recently. The winter Q is not good in construction business, but the forward looking statements look very good. EPS positive, and large YOY. P/S < 1. It should start moving soon, IMO.
Other good potential candidaytes: SDGL & IAO, look good to me at the surface. Deserve a good DD.
2. Higher risk, higher return potential:
IGAI - my favorite. P/S < 0.02! Low OS, lower float, large YOY. No news lately. Any news should trigger the move, IMO.
CKEI - another of my favorites, especially due to the renewable (soybean-based) heating oil component of the busines. Large QOQ gains. At the beginning of each month it usually reports the numbers for the previous month.
PMED - good potential
SEVI - good potential, but some dilution concerns
CIRT - good potential, good YOY, Cornell related dilution.
Other good candidates: MOBL, NEOM, NMKT, CNCN, IVHG, AHMI, EVSC, DYTK, PUPS, MSSI, UCPJ & GWNI.
3. High risk, high reward potential: IVGA, DLGG, MBAH, LTHU $ CYSG & FNIX.
4. New additions (do your own DD):
UCPJ - March 28
CYSG - March 30
SYTE - March 30
If I missed anything, please let me know. Other good candidate GVPB's anyone?
PS: Any volunteers (that have a paid iHub), willing to help improve the GVPB format? In order to succeed, this should be a team effort.
Mike
Bones, thanks, I alredy saw the 10-K, and indeed the company has a good chance to grow, IMO. I don't owe it yet, but will add it to the watch list.
Mike
Nsomniak,
1. CKEI - we should learn more about it next week I believe, after seeing the numbers for March.
2. GDVI - it's a long-term for me. Well loaded up there. EPS positive for several Q's now, and large YOY. I believe after some good news, or at least after the 10-K it should start moving. Some people over RB have launced a rumor about a new large contract in works at Global. Do you know anything about it?
3. You might want to look into VFIN, which I owe. On Friday they are expected to have the 10-K. I expect it to be good, but one never know. I see today it's down, which I have not the slightest idea what it means. Do your DD.
Mike
Re: SYTE
Bones, although the P/S is over 2, SYTE definitevely looks good at a first look. Good technology, and it looks like good Mgmt. team. No up and down crazy jumps, but a continuous increase in PPS since last summer. Today's 10-K might prompt a nice PPS growth. It deserves more DD.
Mike
Nsomniyak,
Re: CKEI: I was probably a bit too nasty with you in my previous post. You seem to be an experienced trader, and probably looking for a fast exit strategy. This (fast exit) usually does not work very well with GVPB's.
You have to recognize you made a not very appropriate (but definitive) statement in saying something like: " just toxic financing," w/o doing a good enough DD. As a former accademic, and educator, and given my own (very bad) experience as a beginner (many years back), with this board, I'm trying to especially do what I believe it's in the best interest of the newbies. They are usually the ones that all more experienced traders (investors) - including myself - get our money from. In this board, as you might have noticed, I try to put special emphasis in protecting the new commers to the market.
So, you and the other experienced traders (investors) you to understand that as long as I manage this board, I'll try doing what it's the best interest of all of us, but not at the expense of these at times very naive new commers. You'll notice that if it I believe they deserve to be there, I put for instance SDGL, and IAO among the lower risk category, although I don't own them yet.
So, I nicely ask you and the others: let's try to only alert on stocks that we believe are good for ourselves (and onlty doing a good enough DD on them), and avoid: pumping, bashing, spamming, and cheap chats. Working together, we all can get ahead of the curve.
Mike
Re: MBAH.
Man, yes it's a very risky company (see where I clasified it, along with IVGA - that I both owed several years back using my "get in at or near the bottom" strategy, and had a nice ride on both). Now and then, some people (including myself) enjoy taking more chance with a very small part of their portfolio, in exchange for higher reward potential. Yes, going into MBAH-type companies it's kind of gambling, let's say with some better chance than Vegas. You win on some, and loose on others. If you are lucky enough to get over 50% winners (as I was using GVPB's), you are usually still better off than with safer companies. If you ever been in a business by yourself, you sure know well how the "Angel Investors" make their money. They invest in many high risk start-up companies, well knowing that only few of them will survive; but, the ones that do, usually give them up to 100 times return, and most of them are doing quite well.
I only have a few shares here, and in fairness to the others (especially newbies), knowing that they are very risky, I posted my entry price on MBAH (0.01), and my intended entry price (< 0.0015) on IVGA (got yesterday some). On less risky stocks, I rarely post details about my entry/exit points, unless I see some people pumping them near the top, when I do, it's just as an educational tools for the newbies.
Mike
FYI: MBAH changed to MBAHE, starting today.
Mike
Re: IGAI
"I tryed to get into IGAI today but the ask was at .016 all day.Was trying to buy at .014 never got in."
Joh8, that (and today's low volume) only means the supply of cheap shares has dried up. Someone(s) that did some more DD on it, will start raising the bid soon, I believe.
Mike
Newbies: Re: #1.1.7 (iBox). Just added this worth reading (free newsletter) to the i-Box. If you have time, you might want starting to read this and the other two sites I added yesterday (more to come):
http://www.mckinseyquarterly.com/newsletters/topten/2006_Q1.htm
Mike
Re: XKEM
Joh8, did you at least read the GVPB board scope? If not, please do it. P/S over 70, and large debt? Not what I'm looking for. Please read the i-box, see if your choice fits the description there, and do your own DD first.
Mike
Nsomniyak, if you don't trust an honest opinion, just put yourself into the Mgmt. shoes. Did you read how many shares they got. Do you know they did not take salaries in order to help the bottom line? What will be their interest to go into a "toxic financing" if they would not feel they can make it (stay above the 0.028 limit, and get an interest free loan). Just use more common sense, b4 throwing away that "toxic financing" slogan, will you?
Mike
Re: CYSG, this may be a good turn around story, and definitevely deserves more DD. If you know the company, can you help with some info on it? Pros, and Cons.
Mike
Man4apenny, yes I intend to do just that, but I wanted first to finish edditing the i-Box, and making its content a lot shorter (prompt the reader to open various sections, rather than having all that long info detailed). To do what you suggest, I would need some help here. Can you or anyone else help?
Mike
Re: CKEI - Opinion on the 8-K (All newbies here may wish to read this):
http://www.investorshub.com/boards/read_msg.asp?message_id=10410232
Mike
***On the 8-K Release - Opinion
Re: “thoughts here on more convertable debtures? is this a sell signal? thoughts from some of the more experienced investors....”
Dsp, if you are asking my advice, you already should know by now, I DO NOT give anyone ANY such advice. However, I can give you an opinion, and a hint. Does the 8-K give a “sell signal?” Not to me. On contrary. Although well loaded here, I’m not planning to sell one single share at any time soon, especially after finally getting a chance to reading yesterday’s 8-K filling and the last several PR's last night. As for this poster before your post saying: “CKEI is now offically a DEAD STOCK......going to 0.01,” all I can say is: I pity him. Can the price go down today, or in the very short term? No one can say for sure. It all depends on the balance between the above folks, and the ones that know to do their DD, understand what they are reading, and are able to connect the quite visible dots.
1. Did you read the 8-K filling? If not, before anything go and read it carefully, use some common sense, and try thinking for yourself:
http://www.pinksheets.com/quote/filings.jsp?symbol=ckei
“The Notes bear interest at the rate of 6% per annum, payable quarterly. If, however, in any month, the trading price of the Common Stock is $.028125 or more for each trading day of the month, no interest will be payable for such month. The principal amount of the Notes and all accrued interest, if nor previously paid or converted, will be due and payable on March 21, 2009.”
“In the event that the average daily price of the Common Stock, for each day of a month, is below $.03, the Borrower may, at its option, prepay a portion of the outstanding principal amount of the Notes equal to 101% of the principal amount of Notes, divided by thirty-six (36), plus one months interest. In the event the Company exercises this option, the Investors may not convert additional principal amounts for 30 days following the date of prepayment.”
The above two paragraphs, not only have anything to make me worried, but to me this 8-K it looks as a very good deal. Let me explain. Just try finding any place to borrow money @ 6%/month, and pay no interest for the months that the price is “$.028125 or more for each trading day of the month.” See also the second paragraph, above. This 8-K to me looks like free interest money, and not what some folks on this board are posting (that either have NO idea how things work, or have their own silly agenda).
2. Please follow my line of reasoning. But first, at anytime something like this 8-K comes out, that it’s perceived by certain folks to be really bad news, do not rush deciding what to do before you do again a basic DD, and try all by yourself connecting the dots. For instance, just read the February 13 PR, and decide for yourself if the price has a chance or not to remain at over 0.028 anytime soon?
http://biz.yahoo.com/bw/060213/20060213005219.html?.v=1
2.1 Let’s see: “ClickableOil.com, Inc. anticipates exceeding $5 million of revenue for its 2006 fiscal year end which ends this March 31st. This achievement will represent a more than 100% revenue increase compared with the $2.4 million it generated over its prior fiscal year.” When the 10-K will be filled (most probably in May), what do you expect those numbers to do to the price? OK, that’s a long time till May, you might say. Let’s dig a bit deeper, shall we?
2.2 From the PR above: “During the nine months ended December 31, 2005, the company earned $2,612,000 in revenue” What does it means? It simply means that during this Q the revenue it will be over $2.4M, which is equal to the revenue for the whole 2005.
2.3. Let’s try to connect the dots a bit further. The revenue for the last several months has been made known to us in the first days of the next month. So, we could expect the numbers for the month of March most probably sometimes next week. Let’s see what the expected income will be. For the month of January (see the PR on February 2) it was $796,000. For the month of February it was $791,768. From 2.2 above, we already know that the 4-th Q revenue will be more than $2.4M. So, for the month of March, it’s expected to be: more than $812,232. Just think what this PR will do to the price (hopefully) next week.
2.4. Let’s go back to the February 13 PR.
2.4.1 "We were determined this fiscal year to acquire more customers, sell more fuel oil and generate more revenue and net profits than ever before” This company obviously is poised for growth. You’ll notice that this fiscal year the company is expected to “generate more revenue and NET PROFITS than ever before. Does an increased net profit ring a bell to you? All up to now the company had a negative net profit. But, in this business, they only started last year. So, what do you think the promise of an increased net profit (the bottom line) should do to the PPS?
2.5. How do you think the company is paying for the loss? First, as you may know, the Mgmt. is getting shares instead of salary so as to save as much overhead money as they can. They are fully loaded, and never intended to sell any of their many shares. Ask yourself why. Even so, thus far, they generated small but negative net revenue (which is quite usual for a bit over 1 year old operation). How can they cover for that money? They already don’t take salaries, so they have to borrow some from somewhere. The deal they found (which again, to me, it’s a very good one) will most probably be used in part to pay off the (part of the) debt.
2.6 Let’s dig a bit further into the Feb. 13 PR: “Management's ability to absorb acquisition costs with virtually no added overhead, and its continuing and proven efforts in carrying out its business expansion plan has enhanced ClickableOil.com's reputation in the marketplace.” The important info is that the company is “carrying out its business expansion plan.” Whatever expansion plan (acquisitions, expansion to new markets, or whatever), it requires money. From this, one can expect that most of the (mainly free interest, IMO) borrowed money will be used for further expansion, which (if everything goes well) will jump start the revenue/net revenue in an explosive manner, and of course the price will follow. Why do I expect an explosive growth going forward? Because (i) the price of oil can only go up from here, (ii) they have a good business plan, and following it, and (iii) because of their involvement with the renewable (soybean-based) oil; these days everything that has to do with renewable energy it’s sending all the other companies (small and large) skyrocketing.
3. Conclusion: Learn to do your own DD, use more common sense, start trying connecting the dots for yourself, and try not to pay too much attention to some of these folks here that are predicting the price will go down to 0.01. They (i) are either plain silly (no offence intended), or (ii) have (as many do) a “self-serving” interest in trying (in their poor judgment) to influence the price so they could get back in at a lower price (?)
Mike
OT: Anyone interested in PV solar cells?
FYI: http://www.investorshub.com/boards/read_msg.asp?message_id=10401465
Mike
As usual, the Wall Street "Energy gurus" that downgraded Evergreen Solar, are proven wrong. I have to admit, I over estimated their ability to bring the price down for this, and other crystalline solar cell companies. It's not only ESLR that will have Si wafer shortage problems this year, but the industry as a whole. And, I predict shortage of poly-Si raw material will be a short-lived problem. Already many companies are looking to start producing poly-Si. The sky racketting present price of poly-Si it's a good enough incentive for them to do so; and once they start producing it in a large enough volume so as to satisfy the growing appetite of the silicon wafers, and solar PV manufacturers, its price will come once again down with the same speed it went up.
In the mean time, no doubt investments in thin film solar cells will gain some traction:
http://www.eet.com/news/latest/showArticle.jhtml?articleID=184400261
But, this will be (IMO) a short lived turnaround. Crystalline Si was, is, and will still be "the king." a-Si cells will most probably acquire 1% to 2% more of the PV solar market. The low efficiency, and high fab costs were, are, and will still be (at least for the near future), the main detterents for a larger extension.
Mike
Re: ITER - Anyone cares to do a detailed DD on it?
http://finance.yahoo.com/q/ks?s=ITER.OB
With 100 employees, good revenue (steady unfortunately), and a P/S ratio of only 0.16, it looks very good, IMO. If anyone cares to dig out on it, and post a summary here, I will add it to our watch list.
Mike
Re: KWBT - Good Newbies lesson
Never, ever buy anything that does not have yet good revenue on a big run up. KWBT went yesterday to 0.12, and today had a minimum of 0.04, and it's now @ 0.05. If you like the stock, wait until the price stabilizes, do more DD, and then decide what to do.
Before buying anything, you better look into fundamentals, and the revenue and its trend should be the main indicator. Better not take the chance. Better a smaller gain with a lower risk stock, than a big loss with a high risk (no proven revenue) stock. That's my strategy, and it works.
Mike
Star, you are right vs. oil/gas. In fact, whatever legit company that has to do with energy it's going to well reward the shareholders. Traditional energy (oil, gas, coal, etc), alternative energy (e.g., nuclear), and renewable energy (especially: solar - PV solar cells, solar thermal, & wind turbines; biogas; geothermal, and small rivers hydropower), etc, are all already and will become even more so very hot sectors. That's why you have so many start-up companies dealing with such things. How many of them will survive? History proves that very few will. Since I like their ideas, I hope CTUM will be one of them, but as I said before I see it a bit too risky right now.
Mike
Okdoke, that's the whole idea. All stocks are risky, but choosing those "that has a product and is close to being profitable," one can significantly reduce the risk.
Even if say only one per week, working together, we can find good GVPB's, I can guarantee you on average we'll get ahead of the other boards that are looking into higher risk stocks. So far, so good. Some posters here already alerted us on some good candidate GVPB's. Hope we can keep going in this direction, and sooner rather than later the results will be good for all of us.
Mike
Thanks Geo. Good info. Dilution is never good, and might explain the sideways trading behaviour. On the other hand, their business looks good to me, and (and there's an if) they manage to reduce (or eliminate dilution), this can be a good company to look into.
Mike
Re: CTUM
Star, I like what they are trying to do, but I see they have no proven revenue to date, and they are reducing expenses. Not a good sign. In Environmental - , and Renewable Energy - related business (which is also my field), I knew many, many companies with very good ideas, which had to close down due to the lock of funding (e.g., ENGY - that I sold for a loss last year). Beware of "sexy" stocks (in nanotechnology, energy, biotechnology, high speed whatever, etc). Few of them survive. Untill you see some money actually comming out of DuPont, I would stay away from it. But, of course, that's JMO, and since I didn't DD it, I might be wrong. In any event, they already had their big run, and it doesn't fit the description of GVPB board. Regardless, I like their idea, and I simpatize with what they are trying to do, so you might want to you alert this company as well on some other boards that deal with higher risk stocks.
Mike
Mike
Mike
GVPB Board Picks thus far:
Please do your DD, and add your comments.
1. Lower risk, good return potential:
VFIN (among others, one of the MM's)- should report 10-K on Friday. Money in the bank, EPS near positive. Good growth potential.
GDVI - reported 10-Q recently. The winter Q is not good in construction business, but the forward looking statements look very good. EPS positive, and large YOY. It should start moving soon, IMO.
Other good potential candidaytes: SDGL & IAO, look good to me at the surface. Deserve a good DD.
2. Higher risk, higher return potential:
IGAI - my favorite. Low OS, lower float, large YOY. No news lately. Any news should trigger the move.
CKEI - another of my favorites, especially due to the renewable (soybean-based) heating oil component of the busines. Large QOQ gains. At the beginning of each month it usually reports the numbers for the previous month.
PMED - good potential
SEVI - good potential, but some dilution concerns
CIRT - good potential, good YOY, Cornell related dilution.
Other good candidates: MOBL, NEOM, NMKT, CNCN, IVHG, AHMI, EVSC, DYTK, PUPS, MSSI, UCPJ & GWNI.
3. High risk, high reward potential: IVGA, DLGG, MBAH, LTHU $ CYSG & FNIX.
4. New additions (do your own DD):
UCPJ - March 28
If I missed anything, please let me know. Other good candidate GVPB's anyone?
Mike
Re: UCPJ
"Okdoke," I'm adding it to our watch list. It looks interesting. Thanks, UCPJ fits well the description of a GVPB. It deserves some DD, IMO.
Mike
Re: COHQ
Man4apenny, looks interesting at a first view. Do you know if they intend exitting pinkies? Based on some bad previous experiences (although exceptions exist), I usually stay away from pink stocks that are not required to fully report what they are doing.
Mike
OT: Stock,
I was wondering yesterday what happen to you. Hope you'll be back soon. Bring some of your friends, too. We'll need all the help we can get here.
Mike
Re: "Mike very nice board!!! I hope to find some winners with the rest of us!!"
Growth and Value,
I see you also have a board based on a closed to ours idea:
http://www.investorshub.com/boards/profile.asp?User=52798
I'll add it to the list of related boards.
GVPB's, if well choosen, are indeed in my experience the best way to go. Although many times the new strange market seems rather to compensate heavily promoted scams, at the end, good intrinsic value stocks are allways the winners.
Mike
Re: Seih
I'm not a contrarian; I'm ready at "any time" to say: "You were right," if you indeed are. All I know about SEIH is that it has a large OS (1.6B), and a large P/S (over 50?). If you know more about it (as you seem to), please feel free and post here the pros (but also the cons), and why do you think it's a good time anyone else to look into it.
As you probably know, the main scope of this board, it's to find good value stocks with a P/S < 1 (see paragraph 2). Stocks with a larger P/S can also be considered, but we have to have a very good reason on why we'll like to look into them. Let us know your reasons. You might be right.
Mike
Yes, it looks like, the real estate bubble is about to implode. If so, it will mostly affect the housing market, and especially the expensive ones (investment houses usually, as the investors would want to move their money elsewhere). It already strated in some areas where the average price went up by as much as 100% over the last several years. However, I do not expect a company such as GDVI to be affected. In south CA there is a severe shortage of school facilities, and the state has recently passed a bond that assures the funding of companies such as GDVI.
Mike
GVPB Board Picks thus far:
Please do your DD, and add your comments.
1. Lower risk, good return potential:
VFIN (among others, one of the MM's)- should report 10-K on Friday. Money in the bank, EPS near positive. Good growth potential.
GDVI - reported 10-Q recently. The winter Q is not good in construction business, but the forward looking statements look very good. EPS positive, and large YOY. It should start moving soon, IMO.
Other good potential candidaytes: SDGL & IAO, look good to me at the surface. Deserve a good DD.
2. Higher risk, higher return potential:
IGAI - my favorite. Low OS, lower float, large YOY. No news lately. Any news should trigger the move.
CKEI - another of my favorites, especially due to the renewable (soybean-based) heating oil component of the busines. Large QOQ gains. At the beginning of each month it usually reports the numbers for the previous month.
PMED - good potential
SEVI - good potential, but some dilution concerns
CIRT - good potential, good YOY, Cornell related dilution.
Other good candidates: MOBL, NEOM, NMKT, CNCN, IVHG, AHMI, EVSC, DYTK, PUPS, MSSI, UCPJ & GWNI.
3. High risk, high reward potential: IVGA, DLGG, MBAH, LTHU $ CYSG.
If I missed anything, please let me know. Other good candidate GVPB's anyone?
Mike
OT: Just a reminder:
http://www.trader-tees.com/product_101.htm
Mike
OT: For our Newbies friends - Tutorial
(Picked up from here and there)
1. Diversify.
Unless you're a pure gambler, "betting it all on black" or putting all your trading money into one position definitely isn't the way to go. Money management can be critical to long term success in stock and option trading and investing.
"Diversify." "Don't put all your eggs in one basket." Who hasn't heard those words of wisdom? Yet, time and time again, people forget that wisdom. They put all their savings into one stock -- often the company where they work. Apparently they believe the company can't fail so they don't perceive the risk until it is too late.
2. Myth: Large Caps are Safer?
Over the last several years my best returns were from GVPB's. They imply risk, but buy using the GVPB's strategy, the risk can be minimized. If you believe large caps are any safer, just talk to people who owned Worldcom, Enron, United Airlines, Qwest, GM over the last 5 or 6 years, and see how they feel that strategy worked. Clearly, many stayed until the all too bitter end in some of those stocks and suffered the life changing results.
For companies like GM where the stock topped out around 94 in the year 2000 and as of mid March 2006 trades around $21 or $22, the old "it'll come back" refrain will require over a 400% move. Suppose you owned 5000 shares of GM since the year 2000; your asset value has gone from about $470,000 to $107,500. Suppose today was the day you planned to retire and those shares of GM and Social Security were it! First, you can see how important it would have been to have used an exit (see our Trend Trading materials on our website), but also quite importantly you can see how leaving all the eggs in that one basket worked out. I don't mean to pick on GM. Stock in many companies have suffered a similar fate. I just want to illustrate the dangers of failing to manage money.
3. What do I mean by "money management"? How is it done?
When someone trades stocks (or options) he/she should set aside a specific amount to trade. The money set aside should be risk money; money that isn't needed to pay the bills, the mortgage, the car payment, groceries, etc. Since all trading involves risk, the amount set aside should definitely be considered to be at risk. Once the amount is identified, the trader has the option of making equal dollar amount trades or trading a fixed percentage of the risk money on each trade.
Someone with a relatively small stake may initially make equal dollar amount trades. So, for example, if the trader has $10,000 in risk money, he may make each trade $500 (or $750 or maybe even $1,000) thus if everything is lost in one trade, there is still $9,500 (or $9,250 or $9,000) left to trade. He is still in the game. Even better, in my view, is making equal percentage trades. I prefer something in the 3% to 5% of risk money in any given trade. Let's say our hypothetical trader starts with $100,000 and trades 3% per trade. The first trade is for about $3,000. Let's say that all is lost on that trade, now the trader has $97,000 and the next trade would be only $2,910. Again, the $2,910 is lost, now there is $94,090 in risk money and the next trade would be about $2,800. Finally, that trade makes a nice gain of $2000. Now, there is $96,090 and the next trade would be for $2,900. Again, there is a gain, and this time a big one for $6,000. Now the risk money is $102,090 and the following trade would be for about $3,060. You get the point. As the fund diminishes, the trades are getting smaller and as it gains, the trades get larger. Several wins in a row will result in more money traded so dollar gains should be greater. If there are several losses in a row, less and less money is traded so potential losses are smaller and smaller. The chances of staying in the game are greater with this method of money management, and you can't make money trading unless you are able to trade. Of course, there is the old bridge players story of the Duke of Yarborough who purportedly went years without having a single point in a hand of bridge. If you are the stock trader's equivalent of the Duke of Yarborough, I guess nothing will help, but proper money management could give you a better chance.
While many people who trade are aware of money management principles, they fail to use them. Though money management makes sense, greed sometimes takes over. I once had a trading student who was doing very well. He'd call me and say "I made "x" today." The next day he'd tell me he made twice as much as the day before and the following day he did well again. The calls went on for some time, each one more excited, and then they stopped. I was concerned so I called him and asked how he was doing. He was crestfallen. He had five winning trades in a row on a particular stock and then guess what he did. He put all his money on the next trade. As fate would have it, the stock gapped down hugely the following morning and my friend not only lost all the profits he had claimed, he was out of the trading business. The market is a stern teacher and "Murphy" is always near at hand. Knowing that every trade involves risk, do everything you can in your trades to try to put the odds in your favor. Proper money management is one of those things that could help.
4. Reward to Risk Ratio
Another thing I believe a trader (investor) should analyze is the reward to risk ratio of a trade. I am a firm believer that I should know my initial exit before I ever enter a trade. I should also have a "first target" for the move I am trying to play. That does not mean that I will exit just because my position hits the first target. I'll see what the stock is doing if it gets there. If I'm bullish, I won't sell automatically if it hits that first target -- it may keep going, you know. If I sold just because it hit the target I may cut my profits by getting right out. I'll have my stop close, but unless the stock turns back at that point, I'll stay in the position.
My "first target" is important in determining the reward to risk ratio I am looking at when I buy the stock. Suppose the stock is trading at $50 and my initial exit is $1 below that at $49. My risk, for the purposes of this calculation only (the real risk is $50) is $1.00. Further suppose that my initial target is $53. My reward to risk ratio in this scenario is $3 to $1 ($3 potential profit to $1 potential loss) or 3:1.
PS: Although the discussion above reffers mostly to large caps, it also applies to our GVPB stocks.
PPS: If any newbies reading this board, DO NOT be shy asking questions. I'm positive many people will offer to help you understand various small (at times dirty) secrets in penny trading (investing).
Mike
Re: IGAI. JT, you might want to keep it this time, at least till after the expected news early next month, as some people from another board say. Look at the graph, and at the fundamentals. If these folks can reduce their advertising overhead (as they said they will try to), with good news, this has a good chance to go back at it's fall PPS, and more.
Mike