To OTC Journal Members:
 

Comments in the BLOG

Apologies to anyone who tried to post a question or comment at the BLOG last week. We had a technical problem of which we were unaware, and it has since been resolved. Feel free to return and post away.

To use the BLOG, simply go to the home page at www.otcjournal.com - the BLOG will scroll down automatically on the right side of your screen. The most current journal entries appear in the middle of your screen. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels or in volatile markets. Your questions and postings do not automatically appear, so don't bother posting the same question multiple times. I personally go through to moderate and respond to every question.
 

Market Comment

Yesterday's FED action brings the possibility of a 4th quarter rally one step closer to reality. The Fed stated that a "cumulative rise" in energy and other costs could add to inflation. Still, it noted that core inflation, which excludes food and energy, has been relatively low, while long-term inflation expectations remain contained. That should let it keep raising rates at a measured pace, which has meant quarter-point moves.

It would have been ideal for the market if the FED had made a statement suggesting it was becoming even less concerned about inflation and could be closing in on the end of the tightening cycle. Instead, their position remained unchanged in conjunction with the 12th 1/4 point move in a row.

With the FED behind us, the 4th quarter rally falls to one determining factor: energy prices. If they continue moving down, I believe the 4th quarter rally will come. $58 is the key number for oil. If it falls below that level, $52 to $54 becomes a real possibility, which should spark a nice rally in stocks as fears of inflation diminish.
 

NeWave (OTC BB: NWWV) Coming to a TV Near You- Finally

We finally have an event that could put the Big Wave back in NeWave. This was a highly successful and profitable idea for OTC Journal subscribers in 2004. Not so good in '05.

Several factors have driven down the share price. In the category of "not their fault", pretty much every non-energy microcap has traded poorly in 2005- it has been the year of the energy micro.

In the "needs improvement" category, NWWV has been going through a major transition throughout 2005. NWWV is the company that helps people run home based businesses on the internet. They provide a turnkey solution for having an online store, and it's a nominally priced subscription based model.

The company expanded at a breathtaking 400% growth rate from '03 to '04, and added a number of new subsidiaries in early '05 to attempt to capitalize on the 250,000 plus individuals who have tried the service. Their expansion plans were unsuccessful, and subsequently all the new subsidiaries were shut down.

NWWV is now focusing most of its energy on customer retention. More coaching services are being provided. Customers are enjoying a higher success rate, and numbers are starting to come back up. The low end of the cycle has been completed, and the company is moving back in the right direction.

The one year weekly chart is reflective of a tough 2005. As you can see, the stock has been more than cut in half from the early '05 highs. Perhaps the tide is now ready to turn.

With the newly revamped coaching services in place, the company is turning its attention back to an aggressive strategy to acquire new subscribers.

The long awaited nationwide roll out of the "infomercial", starring legendary game show host Bob Eubanks, kicks off on Saturday, November 5th. NeWave is coming to a TV near you. 

This is an entirely new venue for customer acquisition, one that has yielded remarkable results for other companies. The informercial was produced by Guthy-Renker veteran Dave Petitto, the biggest and most successful name in the infomercial business.

My expectations for NWWV are as follows: I expect the September quarterly numbers to be quite poor. It was a long hot summer with a lot of transition going on at the company. A poor quarter is already priced into the stock.

October and November are setting up to be record months for the company. In December there will no doubt be some seasonal slowness.

However, once we turn the corner into 2006, Q1 should be a blockbuster if the infomercial yields any reasonable measure of success. Early in the year people tend to go on fiscal and physical improvement jags, and this year should be no different. 

NWWV is squarely entrenched in the growing home based business phenomenon, and the wave should start gathering steam once again.

Don't take my word for it. Decide for yourself. In today's press release you will find a schedule of airings. Watch or Tivo one. I'll put up a BLOG after the infomercials start for the purpose of expressing your opinion on whether or not you believe it will be effective.

Here is the complete text of today's news for your review:
 

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