We're trying to think of how we can add value here, with regards to what's been going on recently in the world of micro-caps (aka penny stocks, aka mini-me's).
By "add value" we mean answering the question, "...where do we go from here?" or the ever present, "...now what do I do?"
These question comes up as investors have seen stocks they own or stocks they have been watching -- go up four, five or ten fold in a matter of weeks. Spongetech (SPNG) of course, being the poster child, going from $0.01 to $0.25.
We were very clear back in November, (when there were no bids on micro-cap stocks), when we said that while "solid" companies had the potential to go up 100 plus percent in a market recovery, that the mini-me's could go up five or ten fold. An despite being aware that such a thing could happen, we still said:
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December 1st.
"So for us, the bell has rung. We're now officially "all in."Picks should be in the very best companies, with the very best balance sheets and a few "development stage" companies which have the very, very best (clearly and indisputably) technology or market positioning such as i2 Telecom (ITUI), Nexicon (NXCO) and Platinum Studios (PDOS)."
"...logic states that one should shy way from the "development stage" companies, who may find themselves in a difficult position with regards to securing financing to fund operations. On the other hand, some of these companies are so small, it doesn't take a lot of money to fund them (just one strategic investor could write a check to fund them out three years) which could result in the shares running up 4 or 5 fold in a very short period of time (like in weeks). This is versus a 30% upside potential for a "regular" company. So while the risks are great, the upside when trading companies with truly "superior/desirable" technology, is equally potentially rewarding.
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Today.
I think we could say that was a "pretty good call" without fear of bragging. We might even call it frightenly accurate. A lot of "regular" stocks have gone up 30 to 100% and a few of our "development stage" companies have gone up 4 or 5 fold. Nexicon (NXCO) has come back to life trading from $0.01 to $0.05, as has Viral Genetics (VRAL) also going from $0.01 to $0.05.
So back to the question, now what do I do? It's a tough question, and really it's two questions rolled in one.
Question #1. What do we do with the ones we have (or have been watching) which are up 5 fold. Question #2. What do we do, if we don't have anything, do we stay on the sidelines.
The answer to the first one is simpler than you might think. We've given this tip more times than we can count. What you do is you hold on for dear life if its going up and then sell if it turns around and starts to go down. In the past we've referred to the strategy as "letting your winners run and cutting your losses short." We didn't invent it, but we follow it like Scripture. At least 90 plus percent of the time.
As for the second question, we really think (and this is something we are learning as we go, even after 30 plus years in the business) what you have to do is WATCH the volume.
Let's look at two of our mini me's which have gone up 500% since December. This is also why we occasionally put out "volume alerts."
But here we are...up 100% today and 3 fold in three days. And no, you can't say we didn't tell you. Of course this isn't a lot of money, but it's good fun anyway.
Jan 8th volume 657,000 $0.01 Jan 9th volume 197,000 $0.01 Jan 12th volume 836,000 $0.014 Today volume 2,200,000 $0.027
===== Nexicon (NXCO) April 16th.
While you couldn't tell from the stock price (until yesterday), things are progressing rather impressively at Nexicon. Yes -- we were way too early coming in last year, but we assumed that broadly distributed "big news" about their revolutionary technology -- (to catch Internet pirates) -- would send the stock up 3 or 4 fold, in a flurry of excitement and investor enthusiasm.
Yesterday the stock traded 3,022,952 shares. They just crossed 1 million shares a few minutes ago.
The shares also poked their nose above $0.02 (yes we know --why are we playing with $0.02 stocks in a market like this). But ask us again if it hits $0.20 !
===== Viral Genetics (VRAL) April 16th.
Guess we could call this our "two-cents-worth" day. This one traded 1.5 million shares yesterday and 822,000 today.
By the way all fooling around aside, we are talking about this stock and talking about Nexicon (NXCO) because we think that now would be a good time to get involved, with your fun money. Remember Pink Sheets = Fun Money. At least on the way in. And not just because they are clients.
===== Nexicon (NXCO) April 17th.
Nexicon (NXCO) $0.025 up 25%.
What's significant has been the increased trading activity and a break above $0.02. Maybe someone knows something.
So the answer to question #2 and the moral of the story is WATCH the volume. We don't know who's buying the stocks or why. And maybe that's not important. We follow hundreds of stocks and what we've been seeing or noticing, is more of our day should be following volume or price movement, than should be spent of following news.
(As for finding new stocks, we still use the age old technique of following news. We don't think we've ever bought a stock because of volume or price movement. We find a stock, because we like what we read about them doing. The trigger should come AFTER price or volume comes in, to what you found earlier and liked.)
The best way to do this, if you have a life and you don't want to be starring at the computer screen all day like some computer geek is sign up for an ALERT service. There are a lot of services out there to do it, but we've found Yahoo to be the best.
You put in the symbol of something you're following like VRAL and then you put in up 15%, or down 15% and then if VRAL jumps 15% you get an email or instant message that says "Hey yo, VRAL is up 15%. Go check it out, something might be happening. Bing badda boom." (Guess we've been in NY too long)
Note: This is great fun in a bull market. Bells ands whistles and instant messages. But in a bear market, it can save your trading life. And also when you start getting bombarded with "Down 15%" messages day after day, it's the stock market God's telling you that if you want to put and end to these annoying instant messages "sell everything and move to the side lines."
Let's look at the last few days. We love Nexicon (NXCO) Since there is no news to accompany, we'll rehash our old write-up.
June 8th 3,700,000 June 9th 1,450000 June 10th 850,000 June 11th 2,550,000 June 12th 2,500,000
===== April 1th 2009
1. Nexicon (NXCO) Trades 3 Million Shares.
While you couldn't tell from the stock price (until yesterday), things are progressing rather impressively at Nexicon. Yes -- we were way too early coming in last year, but we assumed that broadly distributed "big news" about their revolutionary technology -- (to catch Internet pirates) -- would send the stock up 3 or 4 fold, in a flurry of excitement and investor enthusiasm.
And to our credit, they got that news -- when they announced a partnership with YouTube.com. Unfortunately the news came out on Sept 11th of last year, just before the market was to start a near 50% dump, with the Nasdaq 100 dropping from $45 to $25. It was the type of market where you could announce news like -- well a partnership with YouTube.com and nothing happens.
News as reported from ZDNet: "Why would Google entrust something as important as its video ID system to a company that just seems offat least to me." Larry Dignan http://blogs.zdnet.com/BTL/?p=10700
The shares also poked their nose above $0.02 (yes we know --why are we playing with $0.02 stocks in a market like this). But ask us again if it hits $0.20 !
We'll give you just two points, with regards to credibility (something any 2 cent stock sorely needs):
By the way, in addition to being able to "catch" Internet pirates, Nexicon has an opportunity to monetize the information it gathers about illegal downloading.
Point #1. Case Study with Frank Zappa:
Upon viewing a "downloading report from Nexicon, Gail Zappa was astounded at what she saw: By nearly a 2:1 margin, the most popular geographic region where Frank’s work was popular was somewhere that neither Frank himself nor his son Dweezil had ever thought of touring South America. Buenos Aires, Argentina and Santiago, Chile were the two most popular locations for Zappa’s music. Gail’s reaction? "We need to take the band on the road to Argentina!" See here: http://www.nexiconinc.com/products/business-intelligence/case-study
Point #2. Case Study with Viacom.
Nexicon assisted Viacom in achieving a thorough understanding of worldwide digital piracy surrounding two of their most popular titles: Comedy Central’s hit television show "South Park" and the blockbuster movie from Paramount Pictures, "Eagle Eye." For both titles, Nexicon provided a Business Intelligence report which presented quantitative data compilation and infringement trend identification -- as well as superior qualitative analysis -- in a compelling and understandable way. Rather than receiving raw data which can some times be difficult to understand, Viacom executives instead received interperative analysis of the piracy of the titles to evaluate trends based upon time, location and other variables. http://www.nexiconinc.com/products/business-intelligence/case-study-viacom
Point #3 there are doing (or have done) business with Frank, Viacom and YouTube.com and the stock is selling for less than -- well nothing cost less than 2 cents these days !
We follow literally thousands of stocks. And one of our favorite tools to help us do so was a Java based applet from Yahoo, which would pop up a window when any one of the stocks we are following moved up or down and certain predetermined percentage or there was a significant change in volume.
This is how we could catch a 3 million share day in a company like Nexicon, even if we weren't specifically looking at it. Well to make a long story short, it stopped working about 6 years ago. And this was on 6 different computers (so it wasn't a computer specific problem).
Well yesterday, it started working again and we had all these wonderful little windows popping up all over the place and all day long !
================================================== Disclaimer: NXCN: This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; (iii) the Company's growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend," and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Client we have been retained by the company for one million pre-split shares and ten thousand dollars. VRAL: This news release contains forward-looking statements that involve risks and uncertainties associated with financial projections, budgets, milestone timelines, clinical development, regulatory approvals, and other risks described by Viral Genetics, Inc. from time to time in its periodic reports filed with the SEC. VGV-1 is not approved by the US Food and Drug Administration or by any comparable regulatory agencies elsewhere in the world. While Viral Genetics believes that the forward-looking statements and underlying assumptions contained therein are reasonable, any of the assumptions could be inaccurate, including, but not limited to, the ability of Viral Genetics to establish the efficacy of VGV-1 in the treatment of any disease or health condition, the development of studies and strategies leading to commercialization of VGV-1 in the United States, the obtaining of funding required to carry out the development plan, the completion of studies and tests on time or at all, and the successful outcome of such studies or tests. Therefore, there can be no assurance that the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the forward-looking statements should not be regarded as a representation by Viral Genetics or any other person that the objectives and plans of Viral Genetics will be achieved. A client, we have been compensated with 3 million shares of restricted common stock for reporting and investor relations services from the company over the years. ================================================ Going Concern Statements. We would like to point out that the majority of companies listed on the OTC Bulletin Board have factors which create an uncertainty about the their ability to continue as a going concern. These concerns are typically related to financing (or lack of), competitive environments, lack of operating history and operating at loss levels which is typical of most start-ups. These statement can usually be found in their most recent 10Q filings and typically you don't have to dig to far down past the financial tables. We like to use http://www.pinksheets.com for quick and easy access to SEC filings. We think it would be wise for most investors to assume that all companies listed on the OTC Bulletin Board (and many on NASDAQ) have going concern issues. ================================================ Disclaimer: Important Distinction #1. First and foremost the Watch List is just that. A watch list. It is not a buy list. Meaning that there will be no buys or sales issued by the Internet Stock Review. If this was a buy list, you can rest assured that we would crank up our Public Relations arm into high gear, full speed ahead and damn the torpedoes to make everyone know just how brilliant we were when we issued the list. 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