Replies to post #26 on So you got KILLED by MrMarket

[Stock Lobster]

Churak, I agree with all you have said. I had just posted the same comment about 'patience' to Lifegear (another shell stock afficionado) on my other board.

It's true that if you decide to follow the shell stock approach to the penny market, you must forgo most of the excitement of momentum. But given the terrible losses that can occur very quickly with some of the toxic waste passed off as momentum plays, patience is looking better all the time. But I agree, that people need to evaluate themselves and their investing personality. For that reason, from now on I will refer to a shell strategy as "taking a position" in a stock rather than "playing" a stock, as there is very little play involved.

Personally, I know that part of me is a simple minded mammal which likes to chase shiny, moving objects. So I reserve a small amount of play money for momentum plays. But these days I am skewing more and more of my portfolio into shell stock positions. We'll see how it turns out.

I agree that there are some very knowledgeable and generous people on this board. As is often the case in many fields, sometimes the most successful are also the most patient and willing to share their insights. It is one of these who taught me about 'scalping'. Another taught me about reading the filings, and the merger news which results in plays like PLTT and LFZA.

Agree about alot of chart analysis not always being applicable to POS pennies, although chart basics like resistance, support and trend lines, as well as RSI can be useful. In addition, I find indicators like accumulation/distribution and CMF to be reliable confirmations of company dilution visible on the level 2s. But I wish I had $100 for everytime I bought a stock because a "golden cross" was imminent, only to have that stock immediately tank the next day..lol!

I agree that each must perform their own due dilligence, but for many starting out, due dilligence seems to consist of visiting the company website, and analyzing the company PRs. On the other hand, classic Big Board analysis, like calculating PE ratios and industry metrics, barely applies to most penny stocks, either.

I was thinking about it last night, I decided cynically that basic due dilligence for most pink sheets and pennies might consist of the following:

1) Does the company have a working phone number?
2) Does the company have a verifiable address one could visit?
3) Is the company listed in any state documents and businness records, or just a figment of the CEO's furtive imagination?
4) What is the outstanding share count, and assigned share count? (If the stock in question is a Nevada based pink, the AS is almost more important, as that could become the OS overnight..lol)
5) Is the transfer agent gagged?
6) Does the company have toxic convertibles and other evidence of terminal debt?
7) Does the company have a history of dilution and reverse splits?
8) Does the CEO have a prison record and a rap sheet?
9) Are there any signs the stock could be imminently halted by the SEC?

[lowman]

Some excellent posts already, on this very young board! I'd like to add one myself, but to do so would assume I am capable, which could be the farthest thing from the truth! LOL

I have found, no place will a person (newbies, particularly) be humbled quicker, than in the stock market. Problem is, confidence in one's own intelligence leads people to jump in shark infested waters without first even knowing how to swim. I've been there! LOL

The lure of easy money has a very strong appeal, and it is that very appeal that is the demise of any and all who come, that subsequently, go.

The old "if it's too good to be true" should be the first red flag, but unfortunately, the "lure of easy money" overwhelms the common senses far too often.

I seriously doubt even one single member joined IHub with the intention of losing all their savings/investing capital, however, I am quite sure there are MANY people who have joined, lost bundles, and moved on, telling themselves that investing is not for them.

Nothing could be further from the truth though.

The key to STAYING, is using all the tools available, and the greatest tool of all, are our own brains and common sense. Humility is a pre-requisite (until you've risen to Shakerz status).lol

I am continually repeating, "the tortoise alwins wins the race". It's funny how a simple fable applies to profitable investing (note: I did not say trading).

Now, IHub is growing by leaps and bounds, and it would be safe to assume that these new members are not primarily experienced investors, since the majority of experienced investors found IHub long ago.

IMO, it would do well if IHub created a specific:

"Welcome to IHub. Value your money? READ THIS BEFORE PROCEEDING!"

paragraph that stops ALL new members in their tracks, and makes them stop and think.

Perhaps even a fixed period of time (1 week?) of study on the knowledge ladden boards, before being allowed to 'swim with the sharks' on other boards such as Momentum Players and BB's Penny Haven (the two surest boards to lose a lifesavings on).

IHub has MANY great boards for learning, but the first and most important thing newbies need to know, is just how much a newbie they are.

I have an old saying: the older I get, the more I realize, how little I really KNOW.

There can be no greater single sentence that will do more for the new investor than to emphatically understand that.

Unfortunately, money burns holes in pockets, and the desire for knowledge usually does not come until AFTER one realizes how much they need it. By then, a fortune has already been lost.

Since education is the key to success, learning about companies is second to learning what makes them good or bad investments.

Dilution, (MM) manipulation, paid promotion, and false representation, IMO, are the four most important things ALL serious investors need to be fully (or atleast fairly)knowledable in, before dropping one single buck into any company.

Perhaps if a few others suggested to Matt, a 'certified primer course' for all new members, he would see the benefit as being one that would ensure new members are equipped well enough to survive to become long-term members, which of course, would be conducive to IHub's own ends.





"Took me 3 long years to make a million bucks overnight, and the following day, I lost it all (in the stock market)!"

(LOL...joking, but not impossible)