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Comments in the BLOG

There was a new BLOG entry this week on American Water Star (AMEX: AMW) last week.  The stock has finally reopened for trading, and somehow managed to maintain its AMEX listing. It has traded between $.25 and $.30 since reopening, which is semi miraculous as compared to where it could be. Considering the condition of the company, not a terrible haircut from when it was halted for trading about 2 1/2 months ago.

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.
 

NetWork Installation (OTC BB: NWKI) Delivers Big Contract in Summer Doldrums

We are in the heart of the summer doldrums for small stocks. It could go on for some time. I'm seeing a few stocks show some life, but on the whole the micros tend to drift down on light volume throughout the summer months as individual investors turn their attention to leisure pastimes. 

In the nearly 20 years of involvement with microcap stocks I cannot remember a raging bull market in the summer. Looking back on the first half of the year, my only regret is not publishing the April 2nd edition earlier wherein I suggested all traders sell all microcaps. If you are a long term investor you simply have to put up with depressed values in the off season.

On the plus side, those who are around and paying attention can swoop in a pick up some outstanding bargains. A little historical perspective is in order.

In 2004 most microcap stocks got clobbered in May and June. Someone let the air out of the balloon. The fear driven '04 sell off was fueled by uncertainty surrounding the Presidential Election and the possible negative consequences of war in Iraq. By mid August Chicken Little realized the sky was not falling, and the market delivered its highly predictable second half rally.

This year fear centers around sky high oil prices and rising interest rates. The '05 sell off was skewed a month or two earlier than the '04 sell off. As we are nearing the end of the cycle, it's time to start looking at some bargains.

NetWork Installation was out with news before the market opened today. The company announced the single largest contract in its history. The Poway school district in Southern California has awarded them a $1.1 million contract.

This is welcome news for shareholders who have been clobbered on this one over the past four months. 

If it's deja vu all over again for NWKI in 2005 investors should take a hard look at the chart. The 2004 high for the stock was $2.75 pegged on 4/26/04. The low occurred four months later on 8/9/04 at $.84.

This year's high was $2.165 set on 1/28/05, a couple of months earlier than the '04 high. We could be setting the low right now- four months later. 

Investors should also take note of what happened to the stock after the August low in '04. If you had the courage to buy at the low, five months later you notched a cool 157% return on your investment.

Today the company announced the largest contract in its history. However, I don't believe organic growth will be the big driver of this one. CEO Jeff Hultman has a history of clever mergers and acquisitions in his former role as CEO of Pac Tel. Sooner or later there will be some major growth driver, and it will come in a major development.

Attention K Mart shoppers- NWKI is today's special bargain. History suggests now is the time. Look for a repeat of the '04 performance. This is the time when you stand to make the most money because this is the time most people won't act because they aren't paying attention or are fearful. Fortune Favors the Bold.

Here is today's news release for your review:
 

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