Home Page : www.otcjournal.com
Email Questions or Comments To:
editor@otcjournal.com
To
OTC Journal Members:
Today's edition was supposed to contain
my year end wrap for the two companies I haven't covered; Family Room
Entertainment (OTC BB: FMLY) and Aegis Assessments (OTC BB: AGSI).
I always make an effort to contact the management at the companies for
some feedback prior to sharing my views of both the past and the future.
In the case of both of these companies I was unable to obtain some critical
information as some parties are unavailable during the Holiday season.
Rather than guess, I will simply publish on each once I am properly informed.
I know Family Room is of great
interest to many long term members. I have been covering the company for
nearly three years, and the stock continues to be a sore spot. I want to
make sure I have all the facts before publishing.
Aegis Assessments has been
a big loser. The stock is trading at a little less than 1/2 the value from
the day we first featured the company. The OTC Journal has covered four
companies with a homeland security theme over the last two years. The other
three include Irvine Sensors (NASDAQ: IRSN), VirTra Systems (OTC BB:
VTSI), and Global ePoint (NASDAQ: GEPT). These three have all been
big wins.
I've only written a few editions
on AGSI, and I don't believe it is widely held by members. The company's
promised sales have not materialized. When I have a better feel for where
they are headed in 2005, I will share the information.
 |
2004 In Review |
|
The theme of the OTC Journal
is the same as it has always been, and that won't change. Our mission is
to find you great ideas in small and microcap stocks. We are trying to
uncover the undiscovered gems long before the show up on the radar screens
of Wall Street money managers. This end of the market is very risky and
oftentimes requires a fairly long term time horizon, but can be very rewarding
when you find a superstar.
There are varying degrees of risk
in the companies we cover, but to be on the safe side you should assume
it is possible to lose 100% of you capital in any stock we report on. Therefore,
don't risk more than you can afford to lose.
We are always trying to get better.
In order to improve you have to look back on past mistakes, define them,
then eliminate them in the future. I believe my biggest mistake in 2004
was not recognizing how poorly the market would trade in the May to August
time frame. Many of our ideas got clobbered during this sell off. Rising
oil prices, the war and geopolitical tensions, and the pending Presidential
election created a very negative environment. Stocks sold off much worse
than I believed they would.
On the plus side I did call the year
end rally perfectly. All three larger cap idea for a year end trade: FLSH,
ERES, and AVN have done very well. I was a little early suggesting
we take a profit on FLSH- I suggested a sell at $18.50 and the stock
moved on to $20.
Aside from the market timing issues,
there is one far more important problem we are going to try to solve next
year. I believe many investors end up paying too much for stocks. I tend
to cover the major breaking news, and by the time you read the edition
the stock is oftentimes already trading high volume at higher prices.
In order to help investors time their
trades more favorably, we will be introducing a new component to the service
next year. The OTC Journal BLOG will be online next week
sometime.
BLOGs are becoming a very
big thing on the internet. A BLOG is a sort of cross between a web
page and a chat room. The term BLOG is shortened from Web Log. It
will be a kind of real time journal on each individual stock. When one
of the OTC Journal ideas is trading prolifically, you will be able
to go directly to the BLOG for that stock and get some real time
commentary if it has been posted. This will help avoid trading mistakes.
More on this next week.
 |
Low
Lights of 2004 |
 |
In the case of any microcap stock
I cover, I always speak directly with management prior to publication.
I want to know what they believe they can achieve over the next six to
eighteen months. I can't legally share with you what these companies claimed
they could achieve, but I can tell you the following companies fell far
short on predicted performance:
-
Aegis Assessments (AGSI)
-
NuTech Digital (NTDL)
-
American Water Star (AMW)
Another characteristic all three share:
they all traded very poorly and many subscribers are probably sitting with
substantial losses in any or all. Poor corporate performance and poor stock
performance often go hand in hand.
In the future, as evidence builds
that companies are not hitting their marks, I will try to act more quickly.
It can be very tough to differentiate between a short term technical problem,
and a deeper underlying fundamental problem.
Sometimes corporate progress simply
takes longer to develop than anticipated. This could be the case with all
the of the aforementioned companies. Time will tell.
I would also put VirTra Systems
and Family Room in the low light category. However, unlike the three
companies mentioned above, both of these companies had an excellent fundamental
year in '04. Family Room turned profitable for the first time in
company history in Q3 of '04, and VirTra got its sales rolling and
reduced its debt substantially. The stock performances were disappointing.
VirTra
showed signs of life late in the year, and will hopefully have a great
year stock price wise in '05. Patience might pay off in both instances.
|
Hi
Lights 0f 2005 |
|
There were a number of stocks that
traded very well during the course of 2004. NWAV and NWKI
both traded up nicely from time to time and gave shareholders trading opportunities.
The best profit of 2004 was an idea
introduced in 2003. In February of '03 we covered CADA at $4.30.
Just as forecasted in several editions, the stock hit the $20 mark
like a homing pigeon in June of this past year where profit taking was
recommended. I consider this one the best idea because you had plenty of
time to accumulate the stock on its journey to $20. 365% return is very
exciting.
Another company deserving honorable
mention was Global ePoint (NASDAQ: GEPT). It was a great short term
win, but not ideal in my mind because I didn't have time to publish a number
of editions and get a lot of subscribers into the stock before it more
than doubled overnight. I introduced the stock on November 26th at $2.31.
The stock spent four trading days in the $3 range, then rocketed to $6.50.
I love the price movement, but I wish we had more time to accumulate. I
think this one might hit the $10 mark next year.
BrandPartners, an October
addition to the starting line up, has also performed admirably. First introduced
at $.65, BPTR is now in the $.95 range for a net 45% return
in less than three months. BPTR could end up being a dream situation
as the stock is giving you some time to accumulate a meaningful position
before garnering a reasonable valuation.
If there are any companies you are
wondering about aside from FMLY or AGSI you can email me
directly for feedback at editor@otcjournal.com.
No attachments. Next year's version of the web site will have a separate
section for question on each individual stock that everyone can read.
This is the 127th edition in 2004.
I think that's enough work for one year. I hope you had a prosperous, healthy,
and happy '04. I will be working hard to make '05, our sixth consecutive
year of publishing, the best one ever. Many thanks to the loyal members
who give me feedback and the thousands that read the OTC Journal
every time we publish. The entire staff appreciates your support.
|
