Value Microcaps Pick Six Lotto 02

[lentinman]

PSL3 RULE CHANGES:

Shown below is the abridged version followed by detailed version - should you wish to read the details.

Let me preface it by saying that SSK and I went back and forth on a lot of issues all during PSL2 before coming to the conclusions we did. Also, BW has signed off on these changes. We tried to take as many concerns (or interests) of as many people as possible into account.

One note is that I misspoke to KIK the other day about pink sheet stocks.

Remember, these are not THE rules, they are just the differences in the rules between PSL2 and PSL3. We actually have hope that it will never change from here.


ABRIDGED VERSION:

1) There will be three weeks between PSL2 and PSL3. The beginning date is May 22 with the prices of the stocks as of the close of Friday, May 19. PSL3 will be 3.25 months versus 3.50 months for PSL2.

2) Three transactions will be allowed versus two. Each person can pick and choose their transactions rather than being told that they can only have 1 of this or 1 of that.

3) We added "unfreeze" to the options along with "freeze" and "trade". Each is a transaction.

4) A freeze will be allowed up to the last day. Unfreezes and trades will be cut off with two weeks to go.

5) The minimum price for a stock is 25 cents. No stocks will be allowed under 25 cents. PSL2 was 20 cents. PSL1 was 25 cents.

6) We are introducing an optional "Wild Card" pick. This can be either a pinky or a non-earner, or both. The wild card can only be one of your 6 picks.

7) The 15% rule will remain. If a stock trades below the 15% parameter on the open of the next day, the person will be given the option by the end of the day to take the lower opening price. They use up a transaction either way - whether they opt for the lower price or not. Thus risk is associated with shooting the moon on a potentially bogus trade.

8) Fill/Kill will be offered to anyone who wants to not have to watch the screen every day. It will be for one week only and only one at a time per person.

9) Later during the contest, we will unveil the DigiRule (as I call it). This will be to deal with a situation whereby an $18 trade with seconds to go costs someone the championship. We will gladly listen to suggestions on this.


DETAILED VERSION:

1a) PSL3 will be 3.25 months instead of 3.5 months. R59 made the suggestion of waiting until the May 19th close versus the May 12th close because of many 10Q's that will be filed that week. Since the objective is to make informed decisions, it seems logical to wait one additional week.

1b) Along the schedule lines, we plan on making PSL4 only 3.0 months - ending it on December 15th so that there is a full month between PSL4 and PSL5 and it does not conflict with the holidays. We whould be able to follow the same pattern each year - 3.5 months, 3.25 months and 3.0 months. Also, all contests will begin with a Friday close and end with a Friday close.

2) We feel that each person should be allowed 3 "transactions" instead of 2. In PSL2, we allowed 1 trade and 1 freeze - which was highly superior over PSL1. However, we think that instead of limiting a person to whether something should be a trade or a freeze, that we should allow them the flexibility to decide for themselves how they want to use their "transactions". We thought that three would be preferable because, although it is more work on our part (mostly SSK), it allows each person to come a little closer to mimicking their real world investment methodology.

3) We decided to add an "unfreeze". It is just what it sounds like. In PSL2, once you froze a stock, you were stuck. Many times, a stock might go parabolic and you want to take advantage of a sell-off, so you freeze. However, you may want to "buy" it back after the drop. That would be an "unfreeze". An unfreeze would be treated just like a freeze or a trade - one transaction each. You get 3 transactions in PSL3 and any of the three can be any of combination the 3 types of transactions.

4) In PSL2, once we entered the final two weeks, we did not allow a freeze or a trade. In PSL3, we have decided that we will allow defensive transactions up to the end. A defensive transaction is a freeze. However, we think that offensive transactions (trades and unfreezes) should be halted with two weeks to go.

5) PSL1 had a minimum of 25 cents. If you picked under that, you were required to have a basis of 25 cents, so you started off in the hole. For PSL2, we made it 20 cents, but that didn't change anything. So, for PSL3, we are going back to 25 cents - no exceptions. If a person picks a stock under 30 cents, they should provide a back-up in case it closes under 25 cents. We will use the back-up if it does. If they did not provide a back-up, we will give them until midnight EST that day (Friday) to pick another stock (assuming no news) as a replacement. If the time expires and they have no back-up or have not picked a replacement, they will be given a 1/6 unit in cash.

6) We want to introduce the "Wild Card". This is one position of your six that can be any pinky OR any non earner or any stock that is BOTH a pinky and a non earner. Since ZCC is part of VMC, some influence should be felt by pinkies or non earners. I told KIK the other day that we would not allow pinkies. If you read that, I was just forgetting that we had agreed to the wild card which could be a non earner OR a pinky. You are only allowed one in the contest - or rather one unit of the six. You can freeze, trade or unfreeze them just like any other stocks, but you can never have two at a time. The 25 cent rule still applies.

7) The 15% rule is designed to prevent taking advantage of insane outlyer trades that have no bearing on reality. If a stock usually trades at 50 cents and closes at a $1.00 and someone freezes or trades it just before the close, the trade will not go through if the opening trade the next day is less than 85 cents. However, they will be given the option of making the trade at the lower price if they want. It is somewhat of a freebie because if it opened at 75 cents and near the close was at 50, they will say no. If it opened at 75 cents and near the close was at $1.00, they will say yes. Still, it is an option that they have. They have to decide by the end of trading on that day or else the trade is negated. --- However, they use up a transaction either way - whether the trade does, or does not, go through - is, or is not, accepted. So, there is risk involved. You could lose a transaction if you try to "go for it" on a probable bogus close. The only exception to losing a transaction is if there are no trades the next day. Then the trade is negated with no loss of a transaction.

8) Fill/Kill is an option that we are extending. If someone wants to go away and doesn't plan to watch the board, just like with a broker, they can say that they want to sell, freeze or unfreeze a stock assuming a certain price is reached. The Fill/Kill will expire in one week. A person can only have one Fill/Kill active at a time. It can be rescinded at any time and a person can supercede a Kill/Fill with another transaction involving the same stock.

9) We have not yet dealt with the DigiRule, but there certainly will be some rule on the last day covering what happened with Digitech. It has nothing to do with the contest per say and we have plenty of time to deal with a solution.

Len