To OTC Journal Members:

Over the next three weeks I am planning to introduce some new features we have been working on for quite some time. I will be publishing an edition with six or seven larger cap aggressive growth ideas. Each idea will represent the best idea from one of the top fund hedge managers on the planet. 

You will also be able to find a new Daily Market Commentary section on the web site. I will make an announcement when it is ready. This section will have a daily overview of market moving events. It will be a five minute read which condenses the massive market related news flow down to a few critical items. We won't publish it by email. You will have to go to the web site to read each day's edition.

I also have a few other surprises planned which I hope everyone finds valuable.

Here's comments on a couple of the stocks which have been in the news recently. 
 

HyperDynamics (OTC BB: HYPD) - Files December 10Q and Announces New Hire

HyperDynamics perked up considerably this past week as the company filed its December quarterly financial statement and announced the hiring of a new chief Geophysicist to oversee the processing of the recently acquired seismic data from their West African concession. This relatively unknown Houston based company has the hydrocarbon rights to the 16 million acre concession of the coast of the Republic of Guinea. Recent finds in close proximity have investors crossing their proverbial fingers for similar retrievable hydrocarbon deposits here.

The market seems ready to believe. The stock traded up nicely this past week as it was disclosed the company has been successful in raising another $1.2 million to help defray the costs of gathering the seismic data. Fund raising is continuing on an ongoing basis.

Furthermore, it was disclosed that Dr. Tai-Lin Hong has agreed to come on as chief Geophysicist. Dr. Hong has a resume which includes stints at Exxon, British Petroleum, and Unocal. Dr. Hong has a masters in nuclear engineering and a Ph.D. in Geophysics.

Investors seemed to respond favorably to Dr. Hong's compensation package. It was disclosed in the press release that Dr. Hong requested his pay package be 100% in the form of newly issued restricted shares. Dr. Hong states: "I requested stock for my compensation because I view this as a once in a lifetime opportunity. In this last year of consulting with SCS, I have seen and been able to help substantiate phenomenal evidence for the existence of hydrocarbons offshore Guinea. Exciting is an understatement when you realize that our seismic analyses are showing direct hydrocarbon indicators all over the place. Numerous potential drilling targets are emerging and we are just getting started." 

As you can see from the chart, the stock moved up nicely this week, traversing the gap from the low end of support to the high end. I continue to believe HyperDynamics represents a very intriguing microcap opportunity. The company plans to take 3D seismic readings within the concession in the near future, and identify locations for the first test wells from the data.

The company believes there could be billions of dollars in exploitable resources. If and when the market starts to believe, the current valuation will seem a distant memory. This will be an exciting year for the company as the cards should fall one way or the other during the course of 2004. The upside with this opportunity is as good as it gets.
 

Family Room (OTC BB: FMLY) Inexplicably in the "Dog House"

Shares of Family Room inexplicably swooned to the downside this past week for no reason I can figure out other than an imbalance of supply and demand probably related to last year's small toxic financing.

I expect this company to have by far its best year off all time. Their first major film of 2004, Edison with Justin Timberlake, Morgan Freeman, and Kevin Spacey begins filming next week.

In all, Family Room could begin production on as many as nine new movies throughout the course of 2004. Revenues will be by far the highest in company history, and they expect to receive a substantial check from a major studio when filming begins on the remake of "Amityville Horror" later this year.

The stock had nice surge last month and I mistakenly believed a major breakout was in the offing. Instead, shares of Family Room have retreated to the Dog House, heading back to the low end of their trading range.

Attention K Mart shoppers! If you like bargain basement opportunities, shares of Family Room are a steal at the current level. The entire market value of the whole company is only $4 million at Friday's closing level. 

They say every dog has his day. This one needs to come out from the dog house and start barking. I don't know when it will happen, but I believe it will happen some day.

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