To OTC Journal Members:
 

August-A Month To Plan For Future Profits

Throughout the month of August we are bringing you audio interviews with CEO's of the four companies we currently follow on a long term basis. We have covered, recommended, and commented on many other companies in the past three years, but the remaining four have survived the last eighteen months of extremely challenging market and economic conditions.

Seasonally, August is usually a fairly slow month. However, this summer is the slowest we can remember for good reason. The market is so boring there is nothing to get excited about. Since the bottom was made in April, the market has been treading water and volume has been drying up.

This chart of the NASDAQ going back to 1997 displays the outstanding bull run we enjoyed from June of 1998 to March of 1990. The drop from the 2000 high has been extremely painful, but over the last four months the NASDAQ has found a level it likes for the time being. The market is now efficient: punishing companies for poor performance, and rewarding surprises to the upside.

We believe the market will begin a long term recovery phase sometime between Labor Day and the end of the year. The volatility in the NASDAQ correctly reflects the volatility in the economy.

The FED required eighteen months and twelve interest rate raises to cool off the economy. Wall Street contributed to the over zealous economy by over financing many Internet related start ups long before their business models were proven. This created an excess supply of technology in the face of decreasing demand- a formula for poor corporate performance. We bought into the hype just like everyone else.

Over the past six months the FED has lowered interest rates more aggressively than any time in history. This will help stimulate an economic recovery. The market's performance will tell us when it is coming. The Bull will be back six months ahead of the economic recovery.

It will take some time to restore the Raging Bull market of the past, but it will come back. Today's market is a treasure chest of gold for investors with courage and a long term view. You will make your highest returns by investing in stocks when no one wants them and no one cares.
 

Our Interviews Bring You Closer To the Companies

In general, microcap stocks are completely blown out and trading very light volume. The four companies we follow are no exception. These stocks are very cheap right now and will rebound easily with any good news once interest returns.

Last weekend's edition was devoted to Envoy Communications (NASDAQ: ECGI). The stock ended up 25% for the week simply because we brought the value to the attention of investors.

NOW is the time to accumulate positions in the other stocks for a similar move. You must decide which ones are suitable for the speculative end of your portfolio as it is your money. Who better to help you decide than the CEO of the company. Listen to what they have to say and decide if their company is for you.

Here are the four companies we are following with a brief description of our view:

• Energy Power Systems (OTC BB: EYPSF): We carried the interview with Jim Cassina last Wednesday. Click Here if you missed it. This company will benefit tremendously from our current energy crisis. Their vertically integrated business model is unique for a small energy company, and the pending American Stock Exchange listing will bring them higher visibility.
• MedGrup Corporation (OTC BB: CODX): This company could be described as a health care/software play. They have been consistently profitable for the past three years, and doubled in size each year. This is a great microcap with very little downside risk. The stock is the least volatile of any we cover, and their unique business model is 21st Century. We will have an interview with CEO Bill Cronin next Wednesday, August 15th.
• XML Global Technologies (OTC BB: XMLG): This is the riskiest company we follow, but may have the most upside potential. Clearly, the XML programming revolution is the next wave of B-to-B ecommerce, and Microsoft is betting the farm on it. The company is slightly behind its business plan, but contracts are beginning to roll in. Peter Shandro, the CEO will be our guest on August 22nd.

Envoy Communications (NASDAQ: ECGI): This stock is definitely the most undervalued of any we follow. This stock is the Rodney Dangerfield of the small cap world. Despite several years of growth in both revenues and profits, Wall Street has not found this gem. The market value is less than 1 times annual sales, and the company will show a 45% growth rate in its next earnings release. We will interview Geoff Genovese, the President and CEO on August 29th. He will reveal plans for an institutional "road show" to the US market. As a Toronto based company they have never received any Wall Street recognition, and they plan to bring their story south of the border for the first time.

Next Weekend's Edition- A Special Article From A Guest Author

In next weekend's edition we will publish an article from Dr. Richard Geist, Harvard pHd in psychology. Dr. Geist is one of the foremost authorities on the psychological aspects of investing, and we have a section of articles he has contributed to the OTC Journal at our home page. Please take the time to read this edition. You will find it very informative and entertaining.
 

Attention- Members With Children Who Surf the Internet

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Click Here to view our compensation on every company we have ever covered, or visit the following web address:  http://www.otcjournal.com/disclaimer.html for our full profiles and http://www.otcjournal.com/trading-alerts/disclaimer.html for Trading Alerts.

All statements and expressions are the sole  opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities  mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.

The editor, members of the editor's family, and/or entities with  which they are affiliated, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication.

The profiles, critiques, and other editorial content of the OTCjournal.com may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein.

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN  SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN  CONSENT OF THE EDITORS OF OTCjournal.com.

We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.govand/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at  http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.