How to Invest in Patent Litigation stocks.
For the sanity of newcomers, here are some general guidelines which should prove helpful down the road (I wish I knew these when I began):
1. Don't buy into hype. When the stock has run up 10-20% on a PR or Pacer document, don't buy into it thinking it will go up more. 99% of the time the run is over. You missed it; you're too late. Move on. If you buy in a run, you'll almost always buy high and then sit for weeks underwater until the next run. Again, don't buy after it has begun to run; you'll almost always end up buying high and selling low.
2. Don't believe hype. Read and digest Pacer documents and PR's, but don't buy into the comments of commentators. If you are unable to interpret Pacer documents, locate someone who can accurately interpret them for you (such as JJ Seabrook on VRNG's message board) and lean heavily upon their interpretations. These must be people you can trust.
3. Be patient. If you're in a patent play to make a quick buck in a week, you'll probably end up losing a quick 10 bucks in a couple weeks. Know what you own, and then own it for months, and add to your position as you desire. Don't try to play the flipping game; if you do, don't be surprised if you get flipped and end up with fewer shares.
4. Use your brain before you buy or sell. And whatever you do, don't panic sell. Again: DON'T panic sell. Things are almost never as bad as they sound at first. When others are panic selling, I make it a rule to buy at those times. You can get shares at clearance prices amid panic selling. Another way of putting it is this: "Buy when others are selling; sell when others are buying; hold and add when others are holding." That mantra almost always works in these stocks.
5. These stocks are volatile. One day you'll be up 30%; another day you'll be down 30%. Don't panic.
6. Learn to live without news. If you are unable to live without constant news and re-affirmation that your investment is a good one, then don't invest in these stocks. The silence is deafening. Get used to it. Companies in litigation won't say much; when they do speak, you should listen carefully to what they say and to what they don't say.
7. Call Investor Relations YOURSELF. Call the CEO of Worlds or the IR departments of VRNG and BCYP. They are real people who really know some things which will prove helpful to you. I cannot emphasize this enough: call the company yourself and ask them your questions!
8. Keep your eyes on the end goal. The end goal of these stocks is settlements, buyouts, and trial victories (MSJ hearing; Markmans; actual trials). As long as one of these exists as a viable option, then drown out all the peripheral "noise" and keep your eyes on what really matters (i.e. Worlds has an MSJ hearing on October 17 based on the issue of the dating of their '045 patent. That is the next scheduled event. Pay careful attention to any issues surrounding it.)
All this is my opinion; anyone else have (better) advice to add? Please do. We could all use it!
Cheers.
