To OTC Journal Members:
 

Coming Attractions

Recession? Little doubt the market now believes the US Economy is clearly going into recession. The market is now in the process of pricing equities for a major economic slow down, and stocks are simply getting killed across the board.

After reviewing some of the data and commentary from one very smart guy I have followed for years, I believe it is going to be very tough sledding for a lot of stocks in the first half of '08, and many over sold and undervalued stocks will have strong rallies in the second half of the year. There will be some great accumulation opportunities in the first half of '08 for investors who have the courage to act when it never seems like a stock will ever go up again, and the media is telling them so.

I got killed in AAPL this week. What a lesson. I am going to write an piece on how to turn $60k in profits into $20k in profits in the span of a week. The idea worked great at $85 in March, and $127 in August. In January at $175, against the backdrop of a huge winner in a declining market, I got on the wrong side and gave back a bunch of my gains. I'm not upset, but disappointed. It happens when you trade options. This is one stock that will have another monster leg up in the future. I love it falling apart now that I am completely out. If you followed yesterday's BLOG, I liquidated all positions at about $172. I'll live to trade another day.

I am working on a whole bunch of new stuff for your benefit. I have been looking at a series of new ideas, a number of which I really like. I'm definately going global this year with one of the most exciting China ideas you will ever find, and perhaps a Latin America idea as well. There is no recession in either of those places, and those stocks can continue to trade very well in rough market conditions.

Alternative energy, health care, digital entertainment, virtualization, online social networking sites- all areas to look at for 2008. There is still money to be made in the right companies and the right sectors.

Now, here's the really big surprise- I'm looking at some income producing securities that would be a good place to park capital over the coming months. I'll have those ideas for you some time next week.

Also, I'm planning to do a very comprehensive update on the future of eFoodSafety (OTC BB: EFSF) now that I have a pretty good handle on their plans to start generating real revenues after a dismal performance in '07. 

I believe you will also begin seeing some major nationwide media coverage of Spicy Pickle (OTC BB: SPKL) over the coming months. SPKL has really held up beautifully in '08. It's down about 2 cents on the year, which in 2008 is about the same as 20% appreciation. There's a bit of a buyers strike, but investors are unwilling to sell this one as SPKL just keeps delivering. 

More big news today. Read on McDuff:
 

Spicy Pickle (OTC BB: SPKL) Hits Tinsel Town

Spicy has just been extraordinary in 2008- why do I say that? Well- look at the averages- The NASDAQ Comp is down about 8% this year. The Russell 2000 has been sold off to the tune of nearly 10%. So, how about SPKL? $1.30 at the beginning of 2008- $1.25 at the close today, and that difference will probably be made up at the open tomorrow.

Why has the stock held up so well in the face of this massive market decline? There hasn't been a lot of buyside pressure on the stock pushing it up. Buyers have about matched sellers in a year when everything is falling apart, but there haven't been a lot of sellers.

It's pretty simple- despite the drubbing in the markets, investors are simply not willing to part with their shares because SPKL keeps delivering more evidence it is destined to be a big winner in the coming months and years.

When I started covering the company there were about 20 stores open- that was in September. Today, there a 36, and based on today's news, there are now 77 more to open over the coming years- I would guess it will take about two years to work through that number. 

However, that number continues to grow. Today, we learn a new franchisee has carved out a piece of LA and signed an agreement to open 3 stores in Tinsel Town- specifically in the downtown area near the Staples Center and the Convention Center.

If you dig into the announcement, you will start to understand why this concept has a real shot of taking America by storm and being a major player in the fast casual space.

According to the press release, the newest SPKL franchisee has the following resume: "owner of two night clubs in the development area", and "an instructor at the California School of Culinary Arts, Le Cordon Bleu Program in Pasadena."

So, here's the picture. A guy in LA who owns 2 successful nightclubs and teaches other chefs how to be chefs in a Cordon Bleu culinary school learns about Spicy Pickle through the stock market. He then visits several stores in the Denver area, and decides to open three Spicy Pickle Franchises in downtown LA. Does this send a signal of any sort to investors? Wow.

It seems inevitable. As I have been saying from day 1- go try the food. There is little doubt there will be one near you soon if you live in the Continental US. If you try the food, you will own the stock.

Now, let's look at the stock, which is defying gravity in 2008:

SPKL has really been trading in a pretty tight range since mid November, which is really remarkable. Mid November was the start of the current market decline, which really accelerated as we made the turn into 2008.

Volume has been on the decline, but the stock still manages to trade 50,000 to 100,000 shares on the quiet days with little surges on these news items.

This quiet, sideways trading is going to be resolved at some point in the future with a major move one way or the other. In light of the company's string of achievements against the backdrop of a brutal market, it seems likely the next big move will be to the upside. 

The longer it stretches, the more robust the move will be. In short- if it ain't going down now, it ain't going down. I can't say when it will go up, but if SPKL keeps delivering this kind of news, it will go up eventually.

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

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