PowerBroker as soon as he heard from his so called broker about
pending legal disputes involving Beverly Hills Film Studios, decided against buying the stock aka Pnut said he was bailing out of the stock. BHFS questioned me for buying a stock with legal issues before it. Here is my answer to all of that, the reason Beverly Hills Film Studios stock is so cheap is because of certain issues currently before it and what happened in the past. These issues are already priced into the stock, just coming to some kind of settlement, and the actual conclusion of distribution deals will I feel give a major upward trust to BVHJ.
I have made a lot of money buying stocks having even bigger obstacles put before them. Two examples: a Canadian Natural Gas producer paying an excellent dividend, received Government notice that they face a review of 25% of their natural gas wells and may be forced to stop production. The reasons for this are complex so I won't go into them, the stock in one day dropped over $5.00 from $13.85 to about $8.20 I immediately hit the buy button and loaded up on the stock. The Company was forced to shut down some wells and received some compensation from the Government for doing so. They carried on with business with further drilling and acquisitions that more then made up for this lost production. In less then one year and a half after the market crash of the stock, they have raised their dividend three times and the stock has more then double in price. I have been trading the stock for profit and to this day it is the largest holding in my portfolio.
The Toronto Stock exchange announced they were going to review the listing of a junior energy producer causing a big sell off, I hit the buy button, for a couple of months the stock traded at this reduced level, then took off to upside when a favorable review was announced I again traded for profit and it is still in my portfolio.
These two examples should be sufficent to give you an idea of my style of investing. I short the good news stocks that have been over bought, and buy the bad news stocks that have been over sold.
