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MSGI - OT:
Unfortunately the stuff I'm concentrated in didn't fare as well today. Tomorrow is another day, though. Hopefully the nasdaq can keep its head above 2000.
Guy, I believe Hweb has to sell too
before it soars. I actually kept 100 shares in my never sell portfolio, so I'm ready to participate in that big rally if hweb does sell.
CXTI reminds me of a horse named Go Go Tower
This horse would break out of the gate like it was on fire and get out to a huge lead. By the time it hit the stretch, though, it looked like it was running backwards with all the other horses running past it. Every race it would do the same thing.
Each time CXTI puts out a positive PR it runs and then drops like a rock. I sold my shares earlier in the morning before the news hit at $1.07 and $1.09. Did anyone notice it was moving up slowly with a lot of volume before the PR even hit the wire? Did anyone else notice this possible news leak?
Lentinman - Hypothetical strategy:
Those were some interesting research results. I definitely agree with you that the direction of the market in the time period studied would probably skew the results one way or the other. I would think that selling half in a flat or down market might be the better choice. Unfortunately we never know which way it's headed.
I'd wager that both strategies would do well over time. I think the key is the fact that these small BB companies have lots of potential to grow over the years, especially if they have a solid balance sheet to keep them in the game.
I'm sure you've seen companies putz around for quite awhile and then blossom after they work out the kinks. FORD and CAW are prime examples.
"The worst a stock can do is -100%". There's no arguing that. It is a mathematical fact. That's why I think that investing a small amount of money in each of a large number of young, promising companies has great potential for meaningful returns over the long term.
Today TARG.OB, which is on the Never Sell List, announced an acquisition. I have never been overly fond of acquisitions since a lot of times they just don't work out as well as management thinks they will, and they often strain the balance sheet.
If I had a large position this news would make me nervous, and I might unload it. I guess the market liked the news because it was up about 10 percent on 5 times the average volume. I guess what I'm trying to convey is that there are a zillion reasons why a person would get out of a winning position way too early. I guess TARG has successfully integrated acquisitions in the past, and perhaps they have the right management to pull it off again.
The bottom line is that the max I can lose on this position is 100% of $200. And like you wrote, the upside is unlimited.
Deathtotaxes:
I am not looking to make fair comparisons! I just want my experiment to be successful!
To be perfectly honest, I have not practiced the buy and hold strategy. It goes against my value investing nature. When a position is not a "deal" any longer I usually unload.
But it is almost painful to watch a stock like HANS, which I bought in the single digits and sold in the teens, close at over 50 bucks today.
It is extremely hard for me and most people to hold onto a position after the price gets way ahead of the earnings.
By being forced to never sell a position, this experiment is my way of doing "violence to the will" as Schopenhauer would say.
Blue_in_MI, great job with those summaries.
I think you did the board a service. That was a lot of work. You put some meat on my "skeleton" list of companies.
I'm intimately familiar with some of the names on my list, but others I didn't do a whole lot of DD on besides basic profitability and balance sheet tests. I want to cast the widest net possible to include as many low-priced, profitable, well-financed micro-caps as possible. I really believe the potential is huge. Only time will tell, though.
As far as CYDS goes, one of the big reasons the valuation there is so low is because the bulk of their sales are to one customer. I think it was over 90% if I remember correctly.
Hopefully this experiment goes better than my last one when my laboratory exploded!!!!!!!!!!
MSGI - Never Sell Experiment
The examples that you give seem to reflect the mania that was taking place with the internet technology bubble. These are extreme cases. I'll bet some of the companies you cited weren't even profitable.
I'm talking about real companies with solid balance sheets and profits here not pie in the sky mania stocks.
I guess we can just agree to disagree on this. I'll keep the board abreast of the results.
MSGI:
If you look at the percentage return of any of the popular stock indexes with a start date of January 1, 2000, I don't think you're going to see any blockbuster returns. The Nasdaq topped out at 5000 in March of '00 and is now just above 2000. So picking early 2000 as a start date probably isn't real fair. Why not pick a start date in the early 80s when that huge bull market started? What would the returns be like in that case? You can't make rational assumptions using start dates at the tops or bottoms of markets.
I don't agree with you that this experiment is bound to fail.
I have been investing for quite a number of years and have owned many low-priced micro-caps. I have sold many way too soon, way too often. If you think buy and hold doesn't work, talk to Warren Buffet. He may disagree.
What happened to MED was disappointing. There's no doubt about it. What about another one of Bobwins picks.....a company with the ticker MDF. In 2003 it traded as low as 7 cents a share. Its current price is $2.59 and some people on this board think it is headed quite a bit higher. In all fairness I probably wouldn't have bought it way down there since the balance sheet hadn't firmed yet.
I really don't think 30% of the companies in this experiment will go BK in the next few years because I am concentrating on profitable companies with solid balance sheets.
Here are a few of the charts of companies I have bought very low-priced shares in and sold way too early:
http://finance.yahoo.com/q/bc?s=ALDA&t=2y&l=on&z=m&q=l&c=
http://finance.yahoo.com/q/bc?s=SMTC&t=my&l=on&z=m&q=l&c=
http://finance.yahoo.com/q/bc?s=RATE&t=5y&l=on&z=m&q=l&c=
http://finance.yahoo.com/q/bc?s=FARO&t=2y&l=on&z=m&q=l&c=
http://finance.yahoo.com/q/bc?s=HANS&t=my&l=on&z=m&q=l&c=
These are off the top of my head. It's too painful to think of all the others.
This portfolio experiment may not turn out to be a huge success, but I'll bet at the very least it will beat most if not all the popular indexes over a ten year period.
Kozuh - Thanks for those names
I'll definitely take a look at them.
Deathtotaxes:
At the present time, I plan to keep this experiment going until they start throwing dirt on me. So I guess at some point the experiment will either be aborted or it will turn into a long-term portfolio strategy for me.
If things do go well, increasing the position size sounds like a very good idea.
I use Scottrade so the commissions are minimal, and due to the never-sell philosophy there will only be the one commission when the position is established.
Due to the long-term nature of the experiment I don't think the commissions will be a big factor.
I read a few of the pages of that trading book by Alexander Elder on Amazon.com. It looks good. It must be pretty popular because even people selling used copies were asking $20+. I'm going to see if I can get my hands on a copy soon.
Stock__Peeker
I appreciate the suggestion, but I just can't do it. If I start making exceptions that would open up a big can of worms. Believe me, I have seriously considered it. That's one reason I have kept the max investment per position so low. If a position looks like it is about to blow up...... worst case scenario is I lose the $200 initial investment.
My gut instinct would be to sell a position in a company which announces an intent to delist or deregister, or loses a main customer, or reports a whopping loss, or gets a Wells notice, and the list goes on and on. I'm trying to keep it simple, also. Complicated tasks tax small brains.
Blue_in_MI - Never Sell List
I copied this list from a spreadsheet and tried to format it a bit, so hopefully it comes out okay. A few notes: Most of these positions were purchased in the last few months, but there are a few which were purchased prior to that. Almost all fit the criteria outlined in my first post, but there are a few exceptions such as IPO Russia (IPOR).
This is not a recommended list. It's hard to know which one of these companies will be the big winners or the abject losers. All positions represent a $200 max investment before commission.
Company SYMBOL PURCHASE PRICE
Accufacts APES.OB $1.05
Adams Golf ADGO.OB $1.37
Allergy Research ALRG.OB $1.08
AML Communications AMLJ.OB $1.30
American Bio Medica AMBC $1.10
American Education AEDU.OB $0.61
American Oriental AOBO.OB $1.35
AFP Imaging AFPC.OB $1.20
Ascent Assurance AASR.OB $0.59
Auto Info AUTO.OB $0.73
Bernard Chaus CHBD.OB $0.94
Bio-Lok International BLLI.OB $1.35
Breakwater Resources BWLRF.OB$0.59
Calton CTON.OB $0.51
Cardiogenesis CGCP.OB $0.72
Ceramics Process CPSX.OB $1.25
China Expert Tech. CXTI.OB $1.01
Communicate.com CMNN.OB $0.52
CTI Group CTIG.OB $0.39
Cyanotech CYAN.OB $1.35
Cygne Designs CYDS.OB $0.34
Defense Ind. DFNS.OB $1.27
Dyna Group DGIX.OB $0.80
Dynatronics DYNT $1.71
Electronic Systems ELST.OB $0.78
Elegant Illusions EILL.PK $0.57
Emtec ETEC.OB $1.83
Epolin EPLN.OB $0.69
Eye Dynamics EYDY.OB $0.37
Ezenia EZEN.OB $0.88
Fragrancenet FRGN.OB $1.13
Global Aircraft GACF.OB $0.81
Healthgate Data HGAT.OB $1.29
Hemacare HEMA.OB $1.01
Home Solutions HOM $1.57
HQ Maritime HQSM.OB $0.28
Hudson Tech HDSN $0.97
Imagenetix IAGX.OB $1.96
IPO Russia IPOR.OB $1.35
Janel World Travel JLWT.OB $0.45
JDS Uniphase JDSU $1.98
Jupiter Marine JMIH.OB $0.28
Kitty Hawk KHK $1.61
Looksmart LOOK $1.51
MacReport.net MRPT.OB $0.85
Mad Catz Interactive MCZ $1.12
Memry Corp MRY $1.99
MDI Tech. MDTI.OB $1.66
Milastar MILAA.OB$1.80
Movie Star MSI $1.40
Netguru NGRU $1.18
Northgate Exploration NGX $1.56
Opthalmic Imaging OISI.OB $1.28
PDG Environ PDGE.OB $1.37
Pioneer Oil PIOL.OB $1.85
Precis PCIS $1.99
Precision Auto PACI.OB $1.22
Public Co. PUBC.OB $1.01
Pureworld PURW $1.56
Scientific Industries SCND.OB $1.50
Scott's Liquid Gold SLGD.OB $0.69
Siboney SBON.OB $0.43
Silverstar SSTR.OB $1.10
Southwall Tech SWTX.OB $1.28
Swiss Medica SWME.OB $0.39
Synergx Systems SYNX $1.98
Target Logistics TARG.OB $1.35
Thomas Group TGIS.OB $1.43
TII Network Tech. TIII $1.50
Transnet TRNT.OB $1.52
Trimedyne TMED.OB $1.14
Turbosonic Tech TSTA.OB $0.46
UCI Medical UCIA.OB $1.79
United Medicorp UMCI.OB $0.09
US1 Industries USOO.OB $1.01
Valley Forge Scientific VLFG.OB $1.54
VFinance VFIN.OB $0.36
Waste Technology WTEK.OB $0.37
Wegener WGNR $1.71
YP Corp YPNT.OB $1.19
Wade:
I agree with being over-weighted in stocks which you believe have the best potential, especially the best short-term potential.
An example is like when MDF reported 8 cents for the quarter and you could buy the stock for about a buck.
This experiment is geared more towards achieving long-term results with minimum risk. It will probably always be a smaller percentage of my overall stock investments......unless the next Microsoft appears. All it takes is one big winner, and if you never sell your chances of landing that winner are much improved.
Lentinman:
I think our similar "experiments" will both do well on a long-term basis. Odds are we will both have some huge winners, especially as the number of stocks in the portfolios expand.
Stocks like GE can't grow very quickly, but some of our micro-caps with yearly sales of 4 million dollars have huge growth ahead of them if they can execute.
I look forward to reporting the good, bad, and the ugly results of this experiment. There will be buyouts, delistings, special dividends, reverse splits, forward splits, bankruptcies, etc. Whatever happens, though, I will be able to look on dispassionately knowing each position was a $200 or less investment.
Kozuh - Never Sell Experiment:
Well, if it's anywhere close to your MO it can't be that flawed an idea. I think you've accumulated your share of investment marbles.
Hweb has proven there is good money to be made in the short term. EZEN is a recent prime example. He definitely knows what he's doing.
The two big things which I think will work in this Never Sell Experiment's favor will be a wide net and time.
Wade - Never Sell Experiment:
Actually the lowly amount of $200 is the max I am investing in each one of these stocks for this portfolio. The reason I chose such a low amount is (as Lentiman is wont to say) to take the emotion out of it. Any stock in this portfolio can ping pong all over the place, announce great news, horrible news, or whatever, and I can look on dispassionately knowing it is only a $200 initial investment.
By the way, I took your recommendation on GACF. It fits perfectly into this sort of portfolio.
The Never-Sell Experiment
I think one of the toughest things to do as an investor is to hold onto a stock which has gone way past most measures of value. This becomes even more so when a large amount of money is involved.
Looking at my investing history I have sold many, many stocks way too soon when I believed they were getting too pricey relative to their earnings. To counteract this happy trigger finger condition, I came up with the Never Sell Portfolio Experiment. For inclusion in the experiment all stocks must be:
1. Priced below 2 bucks a share.
2. Profitable or nearly so.
3. Financially healthy (decent balance sheet).
The total price of any holding before commission will be less than $200. This mitigates the risk of any one holding. The worst case scenario for any holding will be a couple hundred dollar loss, but on the upside the sky will be the limit.
Never selling will be tough when an event occurs like ANTP's meteoric rise and subsequent fall, but to keep the experiment true to its purpose nothing must be sold.
I have around 80 stocks in the portfolio so far and will be adding more as I find them. It will be interesting to see how it plays out........
GFCI share buyback......
http://biz.yahoo.com/iw/050309/082381.html
CXTI earnings blowout?
It looks like 15 cents for the 4th quarter.
Valuemind - Pink Sheet pre-market trading
That's a good question. I really don't know why. Why not? All I can tell you is I saw prints on my streamer this morning prior to the open.
GFCI screaming up in pre-market (eom)
Knowledge - GFCI
Thanks for the heads up on this one. They, also, intend to become a reporting company:
http://biz.yahoo.com/iw/050113/079011.html
AXLE.OB to deregister.
http://biz.yahoo.com/bw/050218/185426_1.html
Why not enact a law to bar the senior officers from ever holding office in a public company again when this happens.
DYNT - Real?
Anyone have a handle on the DYNT runup today? There's a lot of talk on the yahoo message board about their light therapy devices. Is there anything substantive here, or is it all baloney?
Hweb - XTNDE
Here's what I was referring to from a Nov 2004 8-K:
On July 30, 2004, Extended Systems Incorporated filed a Current Report on Form
8-K with the Securities and Exchange Commission (the "SEC") to report that
PricewaterhouseCoopers LLP ("PwC") had declined to stand for reelection as our
independent registered public accounting firm. In a Current Report on Form 8-K
filed on October 5, 2004, we reported that the Audit Committee of our Board of
Directors had selected Deloitte & Touche, LLP ("Deloitte") as our independent
registered public accounting firm for our fiscal year ending June 30, 2005, and
that Deloitte had informed us of its acceptance of the engagement. On October
28, 2004, we reported in our Proxy Statement for the 2004 Annual Meeting of
Stockholders and in a Current Report on Form 8-K that we had discovered that one
of Deloitte's member firms had rendered de minimis services for us, and that as
a result of those services Deloitte had informed us it could not be independent
and could not proceed with the engagement.
Hweb - CAMT and XTNDE
I think CAMT looks great. Thanks for that one. I bought some yesterday. I was going to buy XTNDE, but the situation with the auditors has me scratching my head. Do you know why PricewaterhouseCoopers LLP ("PwC") declined to stand for reelection?
Researcher59 - JLN
I'm glad to hear you got out quickly. That's what I call under the wire!
JLN out with an ugly earnings report. eom
UUU
There is an interesting post on the yahoo UUU board. The CEO recently exercised options for a total of 6,666 shares. The poster speculates that he chose that number because the company will at some time announce a 3 for 2 stock split which would put the number of shares at 10,000 (actually 9,999). Maybe that number of options exercised is pure coincidence but maybe not. They did do a 4 for 3 stock split in April of last year.
Earnings should be reported by Tuesday.
Deathtotaxes - True quote sizes
Thanks for your reply. I've noticed the same thing regarding the ECNs and their penny better bids or offers for 100 share lots. As far as the constantly changing quotes for some of them, I have actually removed a symbol from my quote screen because it was too distracting with the incessant flashing of the changing quotes. I guess there's a lot more to this than meets the eye.
Deathtotaxes - True quote sizes
I found the posts regarding the reliability of the quote sizes interesting. I never look upon the share size in a quote as anything more than the bare minimum the MM has available at that price.
Since you are the resident expert in this area, maybe you could share some of your knowledge with the board. I think there is a lot of misunderstanding of this subject.
Here's a scenario:
On a nasdaq traded stock, NITE is alone at the offer price and is showing a size of 100 shares (shown as 1 in the quote). Now what are some of the possible reasons why that offer of 100 shares would not be taken out after thousands of shares were traded at that price? Here are a couple of my interpretations of why:
1. NITE is not showing true size, and actually has 50k shares they are trying to unload at that price.
2. Buy orders come into other MMs (other than NITE) and they execute orders at the current offer price out of their own inventories.
Or on the AMEX:
An order is executed by a broker/dealer making a market in that AMEX listed stock and not by the AMEX specialist thus not affecting his quote.
I know there must be other reasons why a quote would not change. Your thoughts would be appreciated.
By the way, I did a little research into the MM designation SIZE a few months ago. It's funny, because it was one of those situations where the bid or offer just wouldn't budge, and SIZE was camped out on it. You gotta love it.
Larrybaz
Hweb is in a ZON (eom)
NITE'S new otc:bb order handling.
Does anyone have any thoughts on why NITE has changed the way they are handling their retail otc:bb orders? I think it's great, but I wonder why they made the change?
EGAM back to profitability and.........
announced a quarterly dividend.
Good news for APT
http://biz.yahoo.com/bw/050131/315316_1.html
Knowledge is King - NITE order handling
I noticed the same thing. It freaked me right out. That's great, though, if they continue to represent our BB orders like that.
cl001 - UUU
I've liked this company for a long time. At $15.60 it still isn't expensive considering they made $1.01 a diluted share through the first two quarters. The balance sheet is strong, also.
abh3vt & researcher59: ANII
Thanks for the clarification on the income tax issue. Hopefully the stock rebounds a bit tomorrow. Imagine if they would have reported a loss!
CAP - 2 cent quarterly loss (eom)
abh3vt - ANII
Did you see something in the 10-K which led you to believe that they will begin showing income tax expense in the near future? I don't remember seeing anything to that effect, but I may have missed it.