To OTC Journal Members:

I'd like to take this opportunity to thank both the new and long standing members of the OTC Journal. Over the last year things have changed dramatically. The growing membership is more responsive to ideas than it ever has been since we first started publishing in 1998, which has opened some doors.

Many of the companies we have introduced over the past 18 months have provided exciting returns to our members. Winners include IRSN, CADA, NWIS, NWAV, HYPD, VTSI, ERES, and TREE. Also, a few have floundered, which will always be the case in the high risk end of the market. If you cannot accept the possibility of losses, this is not the newsletter for you.

The three year Bear Market wiped out most of the microcap brokerage firms. Small companies with exciting upside potential are forced to think outside the box in seeking exposure for their stories. 

We are getting more recognition everyday, and being approached by larger and more mature companies.  I don't believe these companies offer any greater upside, but I do believe there is less downside risk.

Today, I am cleaning house and preparing to introduce some new ideas. I am the most excited I have been since we started publishing in 1998. I believe that following are mega investment trends for the next five years, and I am seeking ideas in each of these arenas if I don't have one already:

• The Digital home entertainment revolution (NTDL)
• The WiFi Infrastructure Build Out (NWIS)
• Obesity/Diabetes/Cardiovascular/Anti Aging and wellness treatments and care
• Revolutionary New Low-Carb Diet Related Companies (coming soon)
• Exciting eCommerce Internet Companies (NWAV)
• Asian manufacturing, and infrastructure build out companies
• Network security software/hardware and systems integrators (coming soon)
• RFID system integrators
• Military and homeland technology and security companies (VTSI and possibly another coming soon)

Time For Some Changes

We're going to make some changes at the OTC Journal for the better.

First: Your ability to communicate directly with me has changed. As of right now, if you email any questions you might have on any issue to editor@otcjournal.com, it will come directly into my inbox. I answer every legitimate question I get. I invite you to email in any question on your mind. You will get an honest and candid answer.

If you get an edition of the OTC Journal, and submit a question by hitting reply, it will eventually get to me, but it will take some time. Put editor@otcjournal.com in your email address book.

Next, a new and exciting feature.

At the end of last year we offered all of our members the opportunity to join our Preferred Members list. We promised some exciting special benefits.

I am beginning to work on a special Preferred Members Only edition. I should have it out within the next two weeks. Over the years of involvement in the small and microcap market, I have been fortunate enough to develop some great contacts. I personally know many fund managers. Among those is the top performing hedge fund manager of 2003 (170% return as reported in Barron's).

I plan on canvassing those contacts for the best ideas for the remainder of 2004, and bringing you those fund manager favorites in the Inaugural Preferred Members Edition.

If you subscribed to the list, you will receive the edition. If you missed the opportunity because you were not a member at the end of last year, we will give you another opportunity to sign up once the edition has been published.

This new feature will be coming soon.
 

Spring Cleaning

I have also decided to institute a quarterly review of all of the featured companies. From now on, at the end of every quarter, I will review every company I cover regularly, and discontinue coverage where it makes no sense to keep the stocks on your radar screens.

If I discontinue coverage of a company, it doesn't necessarily mean there is anything wrong with it. I may drop if for any number of reasons, and I will provide a brief explanation in each case.

Here is the list of companies I am dropping as of right now:

• Shep Technologies (OTC BB: STLOF): When I first covered SHEP in February of '03, I stated it was a high risk/high reward idea. I suggested you invest 10% of your high risk capital, but only start with 2.5% on the initial position and wait for developments. I also stated you should have a two year window in time as your investment horizon. Nothing has changed from my original position, but the company has given no reason to add to the position. In fact, the company never says anything. In a discussion with management I learned the company anticipates corporate developments will be coming this summer. If they do, I can always pick it up again. For the time being it is dropped.
• Irvine Sensors (NASDAQ: IRSN): IRSN was big winner in 2003. The stock traded between $1.25 and $1.75 for 11 months, then rocketed to $4.50 in 30 days. The company offers two opportunities for appreciation. They have introduced a new stacked memory format known as the BGA (ball grid array). They introduced this technology last summer, but have yet to gain any real sales traction. However, the market loves this technology, and if they start landing contracts the stock could take off. They are also using their miniaturized power for military applications, which is why the start temporarily jumped to $4 last week. The company has not made a single sales announcement in 2004. Since there doesn't seem to be anything to cover, there is no reason to continue. The market is looking and hoping for positive news on this one. If they deliver, the stock could run to $10.
• ActionView (OTC BB: AVWI): Unfortunately, ActionView has not provided the action promised when I first looked at the company last September. They have pilot projects in place with some household name chain stores, but have yet to convert any to major commitments. The company publicly stated its goal was to have 1200 sign installations by September of '04. They don't even have 100 after seven months. The concept is good, so it may take more time to gain traction. For the time being, I am dropping coverage for failure to perform.
• StockGroup (OTC BB: SWEB): StockGroup is an outstanding little company and I really like the management. They were at death's door three years ago, and successfully turned the company around and recently reported profitability for the first time in corporate history. The stock trades limited volume, and has virtually no volatility, so it's not too exciting. I believe an eventual buy out will be the exit strategy for shareholders. Since I hardly ever report on the company, there is no reason to keep it on the list.
• Amnis (AMNM); Now Corridor Communications (OTC BB: CORR): This company was AMNM when I first reported on it. It was a turn around candidate that forgot to turn around. They ceased operations in January and closed down the company. They have since changed names and have stated an intent to acquire private WiFi company Corridor Communications. The acquisition has not occurred yet, and there are no guarantees it ever will. If and when it does I will report on it. Until I see some hard data, I cannot express any opinion on what might happen.

Look for two new ideas in the next month.

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