To OTC Journal Members:
 

Comments in the BLOG

I spent all day Friday looking at charts and grinding out some new BLOG entries. You will find new commentary on Commerce Planet (OTC BB: CPNE), eFoodSafety (OTC BB: EFSF), and Bad Toys (OTC BB: BTYH).

The Planet might get roughed up a bit on Monday morning if investors misinterpret the registration statement they filed on Friday. In my view it is a meaningless document- all negative consequences are already priced into the stock, and the company disclosed it would be filing the registration statement in mid February. If you want to read it, you can learn which members of management sold how many shares at $1.90 to Feinberg et al.

eFoodSafety continues to be a stand out, and the Bad Toys spin out of Southland Health Services looks better than ever. Details in the new BLOGS, so if you have an interest please read them. I will also work on thoughts about Titan Global (OTC BB: TTGL) and PhotoChannel Networks (OTC BB: PNWIF), and try to get something up over the weekend.

The BLOG is your opportunity to ask questions and offer comments. I will make an effort to answer every legitimate question. If I don't know the answer, I will contact the management and get the answer. Alternatively, if you have questions you don't want publicly displayed, you can always email me directly at editor@otcjournal.com.

To use the BLOG, simply go to the home page at www.otcjournal.com - the BLOG scrolls down from the upper right hand corner. The most current journal entries appear on the right hand side of you screen. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels in volatile markets.

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The Easy Money Has Been Made

Are the last three weeks shaking your faith? The big sell off was 14 trading days ago, and the market changed character dramatically on that day.

You can't say you weren't warned a correction was a possibilty- I refer you back to the February 10th edition entitled "Drinking the Kool-Aid; Musings of a Grizzled Microcap Vet". 

That particular piece of preaching was published in order to remind all us giddy investors that reality would come back to roost at some point in time, and these stocks which have given us doubles, triples, and quadruples over the last nine months would inevitably enter a corrective phase. That day has arrived.

I have been a fascinated observer of the microcap market for many years, and I believe the "microcap switch" flips on and off more than ever. There doesn't seem to be a neutral market. Micros are either trading great or trading poorly, and there seems to be no in between. 14 days ago, the switch was turned off.

In a raging bull market for micros you can make money in a lot of stocks. In a shallow, low volume pullback, you have to be in the right stocks. Story stocks with no fundamentals will suffer the most. Hence- I spend most my time covering companies like CPNE ($40 million in annual revs), TTLG ($145 million in annual revs), and PNWIF ($8 million in annual revs). In a bad market, these stocks will give the least ground and rebound quickly when we turn up.

If you own stocks it is now gut check time. You should ask yourself if this market correction is a temporary phase as I do, or is this the beginning another slow death, low volume, nasty sell off? 

If you are more of a trader and not willing to hold stocks through a decline, simply stick with the SSLs (suggested stop losses) on the left hand menu bar. If your stock gets to that level, simply sell and get out. After the fact, it could prove wrong, but you will have the cash. This will take the emotion out of the equation.

If you like the growth prospects, business models, and valuations of the stocks you own, and don't mind being a long term investor (a year or more), then hold your positions and hold your nose.

Or, if you want to be a really smart microcap investor, you will indentify two or three ideas you really like, and you will accumulate them in your portfolio when they are quiet and no one wants them. Then, when they are climbing the charts and the world is trying to buy, you can lighten up and wait for the next lower risk opportunity.

I'll keep covering the companies and their achievements. You decide what kind of investor you are, and be disciplined. 

The easy money has been made. You'll have to be a little smarter and a little braver to make money from here.
 

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