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Friday, 01/23/2009 3:49:50 PM

Friday, January 23, 2009 3:49:50 PM

Post# of 83075
IMHO most retail investors have a simple buy and hold strategy. Find undervalued companies, buy and wait for them to go up. Since September of 2007 (around the time the uptick rule was cancelled by the bone headed SEC) hedge funds and institutions found they could make much more money by selling and shorting the helll out of stocks, wait for retail investors to panic and sell their shares. This stategy works even though the pps of a stock drops to unreasonable levels. For example, take energold drilling. (EGDFF). They made 3 million dollars in Q3 (10 cents a share) for a PE of 2.5. Cap ex is around 25 million. They have a net worth of 71 million, 41 million in working capital, 17 million in cash and no debt. How can a market value a very profitable company with no debt at one third it's book value? (Sorry to pump another stock) The point is IMHO SGCPs market cap of less than one million does not represent true value. A logical fair market could easily value SGCP at 100 times it's current pps.