ICH
So, are you having fun yet, ICH? Still there? If so, I hope you are happy with this new company. I'm happy about it, even though there is no action and the market yawned at its first press release. I'm optimistic about 2016, and the stock is up a few hundred percent for a paper gain at least to look pretty on the books.
I hope you didn't follow my advice into SD. This and SD are the only two penny stocks I own. My SandRidge Energy (SD) just got delisted from the Nasdaq to this exchange, the OTC. They are 8 cents now. I bought 20,000 shares Friday morning at 4 cents, after having bought at $1.00 back in June or so, and then 85 cents or so later. I would call that pretty bad timing. I Tried for 3 cents Friday morning but missed that opportunity. When they got kicked off at 15 cents, the market capitulation was fearce. But I'm in good company with this bad decision. Prem Watsa, the Warren Buffett of Canada, keeps buying the stock and has been since $6.00. He looks foolish, yet he has a great record. It's his 5th largest holding. In fact, all of his top holdings look like dogs. He is the contrarian extraordinaire. HIs top holding his Blackberry. God, he's looking bad right now but has an extraordinary historical record. And hedged.
Boone Pickens, Goldman Sach's superstar energy trader has been dead wrong about the bottom and turnaround of oil prices. He is looking pretty foolish. But he is sticking to his guns, saying it's coming next year. And his wrongness has pushed me over the cliff with SD. As I said, it won't be because of being scammed if you lose your shirt on SD.
But I'm having a blast. My breakeven is 15 cents with that 20,000 share purchase, and that gives me more shares than here. Both these stocks have huge potential for me this year.
SD has only 18 months left of runway unless they do some major restructuring. They are defiant. I thought they would reverse split to stay compliant with Nasdaq, but they refused. And were kicked off. Oklahoma regulaters are telling them to stop drilling because of earthquakes, and they are flat out refusing to listen to regultors. They are going to court in a showdown with the state. They are playing chicken with Saudi Arabia at the same time, making an acquisition instead and keeping the oil flowing.
Man, is that fun to me. I have the stomach for it though. I thought Iran was Saudi's target, but now I know it was me. The western shale companies and alternative energies. But Saudi Arabia is killing its own economy in the process. Their budget surplus turned to a huge budget deficit, and they are going into austerity mode now. And since they have no control of interst rates, being tied to our dollar, every $1.00 cut will take $1.50 out of their economy. This is a price war where everybody loses. Who is going to blink first?
I believe our government will not let SD fail because of energy dependency politics. And I still thnk they have the ability to restructure and pull some rabbits out of their hat at the expense of severe dilution to the common and increase that runway. But if oil prices rebound as Pickens expects or some global crisis hasppens, SD could return to profitability quickly. Time is the enemy and they are price for bankruptcy.
Of course, I'm talking to myself. But that's okay. It's going to be a boom or bust year on these two penny stocks. And I'll feel very bullish on both.
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