First – I bought this stock early in the morning (approx. 5k) for roughly .70/share only because I was new to day trading and was my first time buying stock that was “going up” (it was up 100% for the day). I should of sold when it was at $2+ but I got greedy and held too long… I did sell at 1.40 and doubled my money! Afterwords, took all my “winnings” out and put a new paint job on my 1979 vette… Haven’t traded since!

Secondly – I think Joe is very smart! He and I think alike! When I was trading stocks I made money on ALL my trades except one – and that one I purposely sold fast knowingly taking a loss so I could quickly buy another stock that made me good $$$!!

Sorry folks – unlike Joe – I want everybody to remain as stupid as possible so I can make more money! No secrets from me! And yes – I can walk the walk and provide proof of my trades!

Did some basic number crunching. Assuming you started with $1,000,000 (you implied more than $1M, but being conservative here) in 1994 and grew that at 50% until 2009 (once again, you implied more but we value investors are usually conservative) and are up 100% in 2009, you would have around $600,000,000. Obviously, even if your 50% return over 16 1/2 years was true, you are giving us before tax numbers on your annual returns. Taxes being just another problem of the short term outlook.

Not to mention, the daytrader Timothy Sykes who has shown audited results, has admitted to the fact that although he can have obtain great gains it is only with smaller sums of money (at 5-10 million, his strategies aren’t very successful). This is obviously why you don’t see any short term oriented equities traders being billionaires.

But hey, according to you, it looks like at 50% a year you should be a billionaire in the next few years. I’ll be looking forward to reading about your success as the first to do it!

Still waiting for those audited trading records…

If it’s more convenient why don’t you post them here in the comments?

Thanks in advance!

My apologies if my comments aren’t you cup of tea. But the information provided is of the advice nature and a dose of reality in this market. So many people recommend stock because they think it’s work “this or that”….but such statements are ridiculous given that a stock is only worth what someone is willing to buy it for (reasons could be anything from belief in value or because it was their favorite company…and you should realize that there is no difference between those two examples). I’m not trying to attack anyone…just wanting other people to see the market for what it is…a sales pitch.

Wow, what a troll. Seriously, I don’t understand what’s your purpose of posting if you have no good information to share.

George,

This sounds like an idea straight out of Jonathan Heller’s Cheap Stocks blog… nicely done!

Seriously WTF. George does provide an up to date entry exit for his personal portfolio in the special situations, and he has done very well. If you consider subscribing to his service you would see that his value investing principle is no bull.

It’s very easy to claim triple digit returns, but I am 100% certain that you can’t prove that you even own a bank account!

Prove me wrong. And no, calling me an idiot doesn’t count. ;-)

Best Regards,

Dividend Growth Investor

I’m a realist. I don’t read textbooks on valuation and expect it to transpire in the market. Anything to do with DCFs, PE multiples, or multiples of sales, book, etc….is nothing but a sales pitch in the real world. Think about it: if thousands of kids every year graduate with a Finance degree who learn the same material…do you really think anyone can make money that way? You make money when someone else is wrong…and how can that be if everyone is (give or take) using the same information and calculations? I know such things are hard for people like you to understand…but it is the truth. Why do the majority of individual investors lose money? Value investing is complete bull. It all comes down to recognizing trends (of other people reacting) and capitalizing off of the sheep. When analysts do their research and say something is undervalued or upgrade stocks…those stocks don’t magically go up….they go up simply and only because those analysts passed their info onto the firm’s sales team who then pitch ideas to their clients (the stocks then only go up if they successfully pitched the idea and the clients buy). You could say XYZ is trading at $5 and worth 100….it isn’t going anywhere if no one buys it (and even then not a guarantee because traders and market makers can sit on the offer and collect stock).

So if no one else out there is looking at these penny stocks and saying its worth at least $xx….then no one will buy them for said reasons and it won’t go up….get real.

Coming from a person with 20 years market experience, who is self-made, and has had returns in excess of 50% every year since around 1992 (including the 2000-2002 and recent periods)…this year I am up 124% so far. My drawdowns are never more than 10% and I only trade about 6 months out of the year and spend the rest of the time donating my time and traveling. I’ve technically been retired since 30 years old because of my success. And I’m only commenting to drive some sense every now and then into people. So feel privileged.

Another thing…just think…how can a stock like X be properly valued at 175 7/08 and also at 25 during 11/09….in 4 months, its value changed by 85%? Really? And you are talking about a cyclical company in existence for over 100 years. Even if overshot on the upside and downside…even with a margin of error, that is too ridiculous. Analysis doesn’t matter….it only matters about how much is being bought and sold and where.

I do agree with you that I should have bought back in around $0.60, since I thought the company was worth about $1.30 after factoring in a reasonable estimate for the value of their intellectual property.

“I think the lesson I learned here is not to underestimate the potential for momentum investors to drive up the price of a penny stock net-net.”

-The lesson you should have learned is that real financial analysis of penny stocks is worthless and that the only reason you got that move was a random news announcement (nothing to do with the potential liquidation that could have taken months). The real opportunities you should look for are RIGHT UNDER YOUR NOSE (news events on penny stocks)…and trade them with the momentum traders…you could have bought around $.60 at the open after hearing about the news and shares went up over 300% from there!