Stock Talk: SerIous Traders only

I used to day trade and carried on real time discussions in a chat room. I made some money at it, but lost a lot of sleep. I am thinking it would be better in this more conservatIve era to think longer term than the instant late-90’s hyper-trading: short and medium stocks interest me most recently and those can be handled well in a stock forum. I don’t know if Forumosa is the right place to carry on such discussions, but some people have begun to do it in other threads here in Business & Money. Shall we give it a whirl?

I have been advised of a high-risk penny stock:

Sports Pouch Beverage Co Inc (SPBV.PK)

SPBV

Current Price : $0.90 (down slightly and is likely to hover here until they get some positive response from a buyer who want’s a strawless tetrapak drink container)

SPBV Receives U.S. Army Request for Proposal for Pouched, Sterile Drinking Water
If the company develops a product and receives a U.S. Army order, the stock would double or triple.
If not, you can kiss your crowies goodbye.
But if you think about it, all they need to do is step up R&D and they could have something.
Market Analysis

Thanks for starting this thread, Quirky. It was needed. I should have done the same instead of posting my recent comments in the Make me Rich thread. Anyway, I’m far from an expert in the market, but I’m learning. Unfortunately, a lot of my learning has been from bad experiences, but those are the ones that teach lessons most forcefully.

For example, I bought a tech IPO a number of years ago when they were all the rage, despite the fact that I didn’t understand the company or its product but just got swept up in the excitement. This IPO also turned out to be one of many that were being sold by fraudulent brokerages that hyped (lied about) the stock, recruiting scores of investors, before the top officers all cashed in, the stock crashed and then NY’s atty general, Elliott Spitzer (my hero), pursued criminal charges against all the bastards who were living in gated mansions in Florida. Fortunately, I’m a lawyer, so I sued everyone who ripped me off in that swindle and I got them to give me my money back rather than fight the lawsuit. What I learned from that is never buy a product or company that you don’t understand completely, never buy based on hype, and IPOs are extremely dangerous, especially because the owners may wish to recruit your money then bail out. But that experience was just one of many. Anyway, based on my prior experiences, your stock is far too risky for me. It’s reaaaaaly cheap, and it’s headed seriously downhill.


Barring a miracle I see them either filing bankruptcy or lingering where they are for a long time. Maybe it will get the army order maybe it won’t. Do you have any reason to believe it is better qualified than other potential bidders?

Admittedly, in the past year I’ve come to like cheap stocks, but not that cheap. I know one is supposed to look at various factors, such as does the company generate a positive cash flow, are sales and earnings accelerating, is it priced relatively cheaply in particular due to some perceived problem that’s really not so bad (I once bought a company that sold transdermal pharmaceutical patches for that reason, after the stock dropped based on an unfavorable report that I gambled was not so serious, and I scored when it bounced back big), high insider ownership, effective management with good return on assets and, finally, is it a good product. But in addition to all that, for short-term trading, I’ve come to see the wisdom of investing in cheap stocks, because there’s more potential for a quick gain (say 20% in a month), although things can obviously go either way.

Below are three I’ve looked into recently. The first one, Blount International (BLT), makes lawnmowers, chainsaws, outdoor and industrial equipment. I came across the company through work (but didn’t have any inside info), I checked it out and was impressed. I bought it on 12/21 at 16.7 and its now trading at 17.42.


I also must confess that I bought some shares of VCLK, an internet advertising company despite the prudent warning from Jlick, who definitely knows computers and the internet so I took his comments seriously, but in the end I decided, hell, I’ll go for it (where’s the finger crossed smiley face?). I bought on 12/29 @ 13.7 and, damn, it’s now at 13.33, but it’s only been two days, I expect (pray) that it will continue climbing.

That stock I bought after reading the BusinessWeek where to invest issue and seeing, among other things, that VCLK’s revenues should grow 146% this year and sales are expected to grow 31% next year.

A third stock, that I almost bought instead of the above is Siebel Systems (SEBL), which the above magazine noted was trading at 9.99 per share, but the company has $2.15 billion in cash. Additionally, Oracle recently noted that it was considering purchasing SEBL. I probably should’ve bought SEBL instead of VCLK, but too late now.

I should reiterate: I AM NOT AN EXPERT. I don’t know what the hell I’m doing. If anyone buys anything and loses money based on my advice it’s your own stupid fault. (But I hope a month from now this post will reflect what brilliant foresight I had.)

By the way, the serious trader in my household is my wife. She has been buying and selling a huge wad of cash in 2 or 3 companies and in the past 2 months has gained 32%!!! Not only that, but she did it in Taiwanese stocks, paying miniscule commissions and zero capital gains tax. I LOVE my wife.

Was there ever any sort of class action suit against them? I’ve always sort of half wished I had gotten screwed by a company like that so I could be involved in a mass tort where I make out like a bandit, but I’ve never been lucky enough (or unlucky enough, depending on your perspective).

Most I ever got out of a mass tort was $13 against the music industry for supposed antitrust violations

Does she always do this well? If so, why the heck are you even bothering to invest if she is so much better at it? Maybe you should get her to post some of her techniques here :slight_smile:

Mother Theresa,
How often does Joe Public actually get something when the law firms
start a class action suit against the company. Is it really worth getting in on it? I own CNXT and can get in on a suit if I fill out the paperwork.

[quote=“Neo”]Was there ever any sort of class action suit against them? I’ve always sort of half wished I had gotten screwed by a company like that so I could be involved in a mass tort where I make out like a bandit, but I’ve never been lucky enough (or unlucky enough, depending on your perspective).

Most I ever got out of a mass tort was $13 against the music industry for supposed antitrust violations[/quote]

I don’t recall whether there was a class action suit in that case or not, but if I had waited for one I would’ve really gotten screwed. Over the past decade in the US, securities fraud has become a huge problem, with top officers of companies often working in association with “boiler-room” brokerage firms that sell tens of millions of dollars of shares in a hard-to-understand product or company through fraudulent, high-pressure phone calls, before the officers of the company and the brokerage firm cash in on all the investments, the truth comes out, the stock crashes, leaving the investors with nothing. Elliott Spitzer, the NY atty general, then gets pissed off and initiates action after the cons and a couple of law firms will initiate class action suits. By that time, however, the crooks have transfered almost all of the loot to hidden, offshore accounts and used it to buy mansions in Florida (where state law allows one filing bankruptcy to keep one’s personal residence, regardless of its value). So, by the time there’s a settlement or judgment, the money is all gone and investors are lucky to recover a few pennies on the dollar (literally).

As I said, I was fortunate that I’m a lawyer, so I didn’t wait around for a class-action suit; I sued immediately on my own. My contract with the brokerage firm said disputes should be settled by arbitration in NY, but I said screw that, they lied to me, stole my money and I live in California, I’m not going to play their game on the East Coast. So I sued in the small town in Northern Cal, where I lived, and sent the pleadings to a process server in NY to track down the defendants. We couldn’t serve the top guys, because they were living behind locked gates, but we did get the broker I had dealt with, a young guy who was out shooting hoops when they served him. Fortunately, his company defended him. They could have got my action dismissed if they had filed a motion stating that it was the improper forum and they had flown over to argue the motion. But that would have cost them thousands of dollars and they still would’ve been stuck in arbitration with a clear case of fraud against them. So they settled and gave me my money back. That strategy worked especially well for me because I didn’t have to pay for a lawyer and I lived in a small town where it would’ve been extremely inconvenient for them to do battle.

Many intelligent and experienced investors get ripped off in securities fraud and most of them have to just sign up for the class action suit and in the end they lose almost everything. The NY AG’s office has done a great job in fighting securities fraud. Here’s some good info from them:

oag.state.ny.us/investors/invest_5.html

Here’s some more on the subject:
google.com/search?hl=en&lr=& … tnG=Search

As a lawyer, the first things to consider before filing such a lawsuit are a) did they really commit fraud and/or violate the law or was it just an investment that didn’t work out as hoped, b) do you have evidence to back up your case and c) what are the realistic odds of collecting a judgment. If one is not a lawyer one also has to ask what will the legal costs be of pursuing such an action and do the potential benefits outweigh the costs. The good thing about a class-action suit is they handle all that stuff for you. You sign up, then just kick back and they’ll try to get compensation for you (after subtracting the legal fees, he he he). The bad thing, as noted above, is that if you really did suffer actual damages you will recover only very small compensation for it, at best, through a class-action suit. But it’s often the best option (instead of retaining expensive counsel to rack up lots of hours on a losing case on your behalf).

As for your case, I’d be curious to know when you bought the stock, as the lawsuit apparently concerns false allegations between March and November of 2004 that allegedly caused it to fall from about $4/share to $1.60 per share.
secfraud.com/filedcases/conexant.html

But if you’ve owned the stock since 2000, then such matters are trivial, because the stock had already lost over $100/share, apparently due to the tech bubble bursting:


Still, it can’t hurt to sign on to the lawsuit, but don’t get too excited about it.

Does she always do this well? If so, why the heck are you even bothering to invest if she is so much better at it? Maybe you should get her to post some of her techniques here :slight_smile:[/quote]

Sorry to monopolize this thread. I’m sure there are a number of people on forumosa who know a lot more than I do about investing (including Mr. He – where are you?). But to answer your question, yes, my wife has been reliably making very good profits buying and selling the same 2 or 3 Taiwan stocks. I don’t know her system exactly. She’s an accountant for a company that does international business, so she’s very experienced at examining past sales, earnings per share, cash flow and other such matters, and those are exactly the types of things she looks at, but she uses info that is publicly available. She’s great at such things, but unfortunately she’s a lousy teacher. I’ll see what I can learn from her.

As I mentioned before, in addition to her good results, one great advantage for her is that when trading Taiwan securities one pays ZERO capital gains tax (such a tax is substantial in the US – to calculate such sum see moneychimp.com/features/capgain.htm) and in Taiwan one only pays a securities transfer tax upon sale in the amount of .003 times the amount of gain.

I just like the fact that this beverage product would not use those sharp plastic straws. The last thing that the army needs is people getting infested by poke wounds in places without clean water or looking for missing straws. THis tetrapak has a spigot that seals.

I placed a limit order at US$0.90 for this penny stock and it did not go thorough. Consequetly, I lost NT$.04 at pool the other day, so maybe penny games are not 4 me. I’m apprehensive because I think Iraq has more priority for these kinds of contracts. The army’s so dang rich tho… and plus the White House needs entreprenurial success stories if it wants to propel Rumsfeld into the White House in the next election. The final decision will always be a result of the armybuyers’ analysis of the product. It would be nice to know where talks are, but that would be insider info, I guess.

There’s one thing I never really understood that you can explain if you have the time. Can you explain why people buy stocks when they are going to be bought out by a big company. Why not just invest in ORCL if they are gonna be the big mommy after the buyout of SEBL? Their purchase of Peoplesoft helped ORCL enormously.

[quote=“Mother Theresa”]As I said, I was fortunate that I’m a lawyer, so I didn’t wait around for a class-action suit; I sued immediately on my own. My contract with the brokerage firm said disputes should be settled by arbitration in NY, but I said screw that, they lied to me, stole my money and I live in California, I’m not going to play their game on the East Coast. So I sued in the small town in Northern Cal, where I lived, and sent the pleadings to a process server in NY to track down the defendants. We couldn’t serve the top guys, because they were living behind locked gates, but we did get the broker I had dealt with, a young guy who was out shooting hoops when they served him. Fortunately, his company defended him. They could have got my action dismissed if they had filed a motion stating that it was the improper forum and they had flown over to argue the motion. But that would have cost them thousands of dollars and they still would’ve been stuck in arbitration with a clear case of fraud against them. So they settled and gave me my money back. That strategy worked especially well for me because I didn’t have to pay for a lawyer and I lived in a small town where it would’ve been extremely inconvenient for them to do battle.

Many intelligent and experienced investors get ripped off in securities fraud and most of them have to just sign up for the class action suit and in the end they lose almost everything. The NY AG’s office has done a great job in fighting securities fraud.[/quote]
Well, I think the work that Spitzer’s office is doing is really aggressive stuff. They’ve gone after a lot of the big guys. Spitzer is amassing one amazing resume for his run for governor, and it’s looking like a pretty damn good resume. And I don’t even think it’ll hurt his ability to get contributions because I think all the corporations will be afraid he’ll go after him if they don’t contribute.

That’s great that you were able to get paid by the brokerage that sold you the stock. Maybe they had already gone to arbitration several times and lost and they knew it was a losing fight. In my limited knowledge of process service, I don’t think you have to actually serve the officers personally. You could probably have served the corporate office of the company. Also, in New York, all corporations are registered with the secretary of state, and you can serve the secretary of state. The secretary then sends the documents certified mail to the corporation’s registered address. It is deemed served when the secretary receives it. But anyway, great job on getting your money back. The most important thing was probably getting your money while there was still money to be given back.

MT,
Regarding CNXT, I bought in at 4.20 and watched it sink.

I would have thought you might want to research some mass consumer companies like, say, Walmart.

Don’t laugh!

Its been basically flatlining for four years now. Its valuation is not cheap, OK, but its not outrageous. Pretty decent market position. I would have thought the downside was low.

What’s the kicker? Well, a stronger US dollar and a less inflationary environment will make US bonds and cash cows look good to foreign investors and domestic investors alike.

[quote=“imyourbiggestfan”]I would have thought you might want to research some mass consumer companies like, say, Walmart.

Don’t laugh![/quote]

Laugh? Those who bought Walmart 25 years ago are laughing . . . all the way to the bank. Motley Fool discussed Walmart a couple of weeks ago, explaining that since 1980 it has increased in value by 5,300 and $5,000 invested in the company back then would be worth $26 million today.
fool.com/news/commentary/200 … 010501.htm

You’re right, too, that it’s been flat for the past few years and your other points may be valid too, but I wouldn’t expect its next 25 years to be as good as the last.

Agreed. Absolutely. But, I think its been neglected a bit for the last few years. It may make money in what could be a difficult 6 months.

By the way, can anyone manage to get a long-term chart of Walmart vs the USD/EUR exchange rate. I would be willing to bet that periods of Walmart strength coincided with USD strength and its “flatlining” is USD weakness-correlated.

Now, don’t get me wrong, I am short-term bearish on the Asian markets.

But, just to keep in the back of your mind for when things turn better:

  1. Taiwan is now one of Asia’s highest-yielding markets!
  2. In the FDI Confidence index (the Economist, Jan 22nd-28th, page 104), Taiwan ranks behind Indonesia, Hungary, Russia, Poland… even France!!! :wink:

I think it is safe to say that sentiment is bearish on taiwan. So, if these markets do get a bit of a bashing in the near future, it may provide a really good buying opportunity.

Agreed. Absolutely. But, I think its been neglected a bit for the last few years. It may make money in what could be a difficult 6 months.

By the way, can anyone manage to get a long-term chart of Walmart vs the USD/EUR exchange rate. I would be willing to bet that periods of Walmart strength coincided with USD strength and its “flatlining” is USD weakness-correlated.[/quote]

Interesting outlook, iybf (as usual).

I would bet its recent “flatlining” is more Target Stores-related (TGT) instead of dollar-related, but this is far more hunch on my part than educated guess. There’s an excellent SuperTarget 'round the corner from me currently, competing heads-up with the carnivorous - as well as cavernous - WalMartSuperCenters here (WMT’s current - and excellent - hyper/grocery strategic entry to the consumer-perishables-hole-in-the-dyke-to-consumer-durables in the US).

This SuperTarget store, the one near me, is stunning; it’s really excellent. It’s a clear alternative to the WalMart shopping experience, exceeding WalMart in a certain American utility called “style,” and in my experience my goods-basket price is indistinguashable from WalMart’s. In fact, perhaps pennies lower.

You’re betting that WMT’s “problems” are related to its suppy chain (i.e., its dollar-related importing), but I’m guessiing it shares same with TGT. I think Target Stores are stealing share from WalMart - which must likely be true for any other-than-WalMart-Store growth, I think (hinted at above , I think, by both you and MT). Target Stores, imho, are limited only by time: how soon will they hire away enough WMT’s IT people to match WMT’s only unique* business advantage?

That said, WalMart has done such a complete job of convincing Americans of its compleat utility that - I think - Target’s clearly superior “style” may be perceived as merely wastrel. That is, just as Americans can be convinced by BC04 that only GW Bush represents certain unique American values, so can WalMart’s loyal customers be convinced that “style” is as alien to American values as was John Kerry’s “global test.”

If Americans can be thus convinced through the usual advertising channels that WalMart is indeed their low-cost supplier (i.e., against most empirical evidence, that is), then “style” becomes as dispensible as any other-American clout. In this case, then, WalMart wins and Target loses.

Very interesting, imho.

*-WalMart currently enjoys a uniquely powerful buying power related directly to its enormous size, a direct result (I believe) of its overall IT advantage. That is, its ability to accurately measure expense in real time ultimately means it can garner enough shelf-realty to order a significant portion of any American’s retail-shopping trip.

Had a v quick look at Target. Similar financially to WMT, except for one crucial aspect. WMT RoE is 22% versus 17% for Target. AT a quick glance, this seems not to do with debt or margins (Target margins are higher). And sales growth is twice the pace at Target.

Valuations about the same.

But asset turnover in Target is a little under 4X; in Walmart it is nearly 6X.

Here is the difference between the companies. Walmart gets so much more out of its assets. That will give it a key advantage when investing. Target has had plenty of time to compete with Walmart and doesn’t seem to have done much damage.

The market, though, has indeed favoured TGT recently.

Hey, buy both!

Jeeeeezusss, when will the markets turn around? US stocks have been heading south since January!!! Below is a chart of the Dow, Nasdaq and S&P 500 for the past 6 months.

ichart.finance.yahoo.com/z?s=%5E … JI&a=v&p=s

All down about 10% since January.

Yesterday’s big hit was due to the following:

[quote]The American economy slowed during the first quarter to its weakest pace in two years, the government reported today, as business spending faltered and the trade deficit widened.

The nation’s gross domestic product, the broadest measure of goods and services produced in the United States, grew at an annual clip of 3.1 percent, compared with forecasts of 3.5 percent growth. That was its weakest performance since the first quarter of 2003, when it rose only 1.9 percent.

Today’s report, issued by the Commerce Department, is the latest in a series of economic reports that have pointed to slower growth in the second quarter.

But today’s data on growing inventories and rising prices suggest that the downturn may be worse than expected, some analysts said.

Growing inventories accounted for 1.2 percentage points in the overall 3.1 percent rise in G.D.P., suggesting that companies would cut production in the second quarter. . .[/quote]
nytimes.com/2005/04/28/busin … r=homepage

But it seems that if it’s not one thing – war, rising oil prices, etc – it’s another – slowing economy, excess inventory, etc.

Can we expect things to improve in 2005? Can we expect things to improve while Bush is still in office?

I guess I don’t really expect an answer. Just growing despondent over my shrinking portfolio. :frowning:

This is why a have a few high divended paying stocks that act as a buffer to sinking markets.

This is why a have a few high divended paying stocks that act as a buffer to sinking markets.[/quote]

I went that way in January-February when the Dow was still up around 10800-10900. Really glad I did for the moment. Some are saying that this is just the normal 2nd quarter dip and that there’s still promise for the 3rd and 4th. Just think of it this way, it’s looking like a good time to buy! :wink: