To OTC Journal Members:

Don't forget to check out our new feature: Daily Market Commentary can be found every day just prior to the market's opening at www.otcjournal.com.
 

Winners and Losers, and When To Sell

I've been receiving a lot of emails lately concerning both our Track Record and the issue of when to sell. I have never formally published a "Track Record", because I believe it is misleading. You could have made or lost money on any stock I have covered depending on how you traded it. 

On our home page there is a button on the left hand menu bar called the "Alerts Tracker", which shows a list of the date and price of every edition we called a "trading alert". The subsequent high the stock made over the prescribed time frame is also tracked. This is designed to provide a kind of guideline track record, but can also be misleading when interpreted incorrectly.

To simplify things, here is a list of stocks on which the OTC Journal has written multiple editions since the beginning of 2003 divided into three categories. The first is the winners, all of whom have provided 100% plus returns from first being featured, and all have made multi year new highs since first being featured. The second list is the in betweens, which are those stocks which haven't created big returns, but haven't been big losers either. The third list is the losers, any of whom could become a winner if the right events transpire:

Winners:

• Irvine Sensors (NASDAQ: IRSN)
• NeWave (OTC BB: NWAV)
• HyperDynamics (OTC BB: HYPD)
• NetWork Installation (OTC BB: NWIS)
• VirTra Systems (OTC BB: VTSI)
• eResearch Technologies (NASDAQ: ERES)
• Lending Tree (NASDAQ: TREE; bought out)
• Cam Commerce (NASDAQ: CADA)

• NuTech Digital (OTC BB: NTDL)
• StockGroup Technologies (OTC BB: SWEB)
• Family Room (OTC BB: FMLY)
• Project Group (OTC BB: PJTG)

• Amnis Systems (OTC BB: AMNM)
• Titan General (OTC BB: TTGH)
• Imaging Technologies (OTC BB: IMTO)
• ActionView (OTC BB: AVWI)
• QT5 (OTC BB: QTFV)
• SHEP Technologies (OTC BB: STLOF)

When To Sell

Selling is much harder than buying, and it is a stylistic issue. I believe most investors make the critical mistake of selling their winners and keeping or adding to their losers. There is no right or wrong, and it depends 100% on your goals and disciplines to decide when to sell. For the most part, I will never publish a blanket sell recommendation when a company is doing well. Stocks can go up indefinitely. They can only go down to zero. Therefore, anytime you buy a stock, your upside potential is far greater than your downside risk. Many companies go into multi year expansion phases, and during that time their stocks have many ups and downs before reaching a peak.

Early investors in WalMart (NYSE: WMT) waited three years for Wall Street to recognize the stock. After three years of sideways trading, WalMart doubled in the fourth year. If you sold on the double, you cheated yourself out of another 10 years of double digit gains.

The only tried and true advice I can give you on the issue of when to sell is to develop your own well defined strategies and stick to them. If you are a long term investor (2 to 5 years), don't be too concerned about the ups and downs. Just follow the fundamental developments, and stick with the stock as long as the company continues to move forward. Long term investors tend to make the best returns over time in my opinion. If 100% return on a stock would make you happy, sell it when you get to your target. If 20% is your target, sell if and when you get there.

I strongly recommend you identify your risk tolerance on each individual stock you own, set a mental stop loss, and sell the stock if it violates the stop loss. You should have a different risk tolerance for different kinds of stocks. Nevertheless, it is the single most important discipline you can maintain. If you get stopped out of a stock you really like, you can always buy it back when the price stabilizes.

Here's some breaking news on one of the companies at the top of our winners list:
 

NetWork Installation (OTC BB: NWIS) Reduces Long Term Debt Substantially

NetWork Installation was out with news after the market closed today. The company announced it retired a substantial amount of long term debt, which bodes well for balance sheet enhancements and positions the company more favorably to access capital for expansion.

Since last reporting on the company, NetWork has announced an additional product order from Builders Showcase, and a reseller agreement with 5G Wireless.

All three announcements combined continue to support a pattern of corporate expansion. Their target market is expected to grow ten fold over the next three years, so expansion appears to be a fait accompli. NetWork has also added with three new locations since the first of the year, which helps explain increasing investor interest.

After nearly eight months of slow but steady appreciation, NetWork had an epiphanal event earlier this month, and the stock made a very significant move up the charts on record volume.

The stock surged to a new multi month high of $5.30 on ten times the average volume when the company announced an acquisition which added $1 million in annual revenues and expanded their product line to include VOiP offerings.

For the first time since last August the stock had a major surge and a subsequent correction. I believe this is a healthy development in the trading pattern, as it is with the market overall.

NetWork Installation has been stingy when it comes to providing favorable entry levels. No one wants to jump on a speeding bus. Most people prefer to wait at the bus stop. They get on when the bus stops and the doors open.

NetWork is at the bus stop right now. The stock has delivered a 50% retracement from the January levels. This is the first significant correction since last August.

On the issue of when to sell: NetWork Installation's growth rate will probably peak in 1 1/2 to 2 years. If you have the discipline to invest over that time frame, you have the best chance of maximizing your result.

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

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. MarketByte LLC has been paid of fee of $25,000 and 250,000 newly issued restricted shares by NetWork Installation for coverage of the company.

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 unless specifically disclosed in the newsletter. Some of the companies featured in the OTC Journal pay a cash ESP fee to an affiliated technology company ranging from $2,000 to $5,000 per month for internet related technology services.

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. Disclaimer ID:$subst('Recip.userid') 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.  MarketByte LLC's mailing address is 3525 Del Mar Heights Rd #334, San Diego, CA 92130.