Editor: I’m not suggesting you should invest in the stock. I suggest you watch the video at the home page on SSLs. There are all kinds of investors. The SSLs are for those who have a shorter term time frame and want to make sure they preserve capital. Others choose to be long term and not worry about price.  I invest both ways- sometimes thinking shorter term, sometimes long term. I know which it is going to be when I go in. I provide updates as a service to those long term investors who still own the stock, myself included. If you sold it at the SSL, and you have a lot of courage, you might want to look at it while it’s so cheap. However, I am not strongly recommending new positions in SPKL. In this environment I am not strongly recommending any companies that are not making money with plenty of cash. I believe it is going to be very tough to raise cash right now. On the list I cover, the only two I recommend are China Energy (CGYV) and PhotoChannel (PNWIF)- both are making money, growing, and well financed. SPKL has a plan to become profitable in 2009, but I want to see them move further down that path before I would make it a strong buy.  The positive- they have a nice recurring revenue stream that is not going away. If they have to lower their overhead to match the revenues, they will do that. I appreciate the question.

Editor: No, there is nothing wrong. That was my SSL, and the stock is way below that level. Therefore, if you are still holding the stock, you have to be long term- by that I mean 2 to 5 years. I continue to provide information on the company because there are long term shareholders that follow the newsletter. I think it will be a great stock to own in 2010, but it’s going to be a tough 2009, as it will be for many companies that sell anything to US consumers. However, everyone has to eat, so the company will hold its own, and through some growth and trimming its overhead, it could turn profitable during the course of 2009.

Editor: As it turned out, good job selling at $2. It might be a wait to see the stock start to behave better. The company has to reduce its overhead, raise a little more cash, and expand a bit more to turn profitable. It’s very difficult to be a money losing company with limited capital in this environment- however, I also believe all those factors are already priced into the stock. It’s a risky proposition, which is why it’s a $.25 stock.

Editor: Interesting comment. I don’t have any hard evidence to prove the company will survive. This is simply an instinct based on a 40 year relationship with the CEO. Here’s what I know- same store sales are not falling. I know the cash flow from those stores comes in everyweek. I know they can literally ramp the company down to run on fumes if they have to, and still be around.  They have over 50 stores that are all doing fine, and the commercial real estate market is finally cracking. I am informed spaces are being offered at $9 per sq ft for the first- down from $40. Under these terms, leases are now close to being signed for the first time in months. I believe they will survive, but I also believe one will have to hold the stock out to the other end of the recession to make any money.

Editor Well, it didn’t really seem to effect the stock much. I don’t know that it’s a great buying opportunity yet, but the company is moving in the right direction for the current environment. I believe they will lower overhead, raise revenues, and raise a little more money. They will bootstrap their way to profitability, which will set them up to do well when the recession ends.

Editor: I’m not really sure you’ve been saying anything factual. If you would care to share some facts, then give your opinion, feel free to do so. As I said in my response and weekend edition, if you are a shareholder and concerned about the company’s ability to survive this recession, sell the stock and be done with it. Here is my response to the article:

http://www.otcjournal.com/Managing-Stock-Market-Fear-Spicy-Pickle-Slammed-in-Editorial/af/archive/20081018-1/ 

Editor: I totally understand that what he is really saying is that just because a microcap stock is cheap and you like the product, it doesn’t mean it can’t go down- especially in a nasty recession like this. Why SPKL which really does have some substance vs the hundreds of other choices out there, I can’t say. Here is my response if you are interested:

http://www.otcjournal.com/Managing-Stock-Market-Fear-Spicy-Pickle-Slammed-in-Editorial/af/archive/20081018-1/

Editor: yes- as Mr. Jaffe points wrongly points out – I still own 1.4 million shares (he said 1.7). One would think the fact that I have not sold them could be viewed as a positive. I recognize this one is now highly risky as the company is not profitable. The only two microcaps I am recommending are both profitable companies that are growing and don’t need to raise capital. I am sticking with SPKL because I have a gut instinct that tells me they are going to successfully navigate this tough environment and come put the other end as a profitable company that continues growing for a number of years. Don’t forget, when things get better, there are still another 90 franchises committed to in the US, and now they have International expansion.

Editor: Thank you for your contribution. Actually, when you take out the sensationalism, his conclusions on the challenges the company faces right now are not that different than my own. Here is my response for those who care to read it:

http://www.otcjournal.com/Managing-Stock-Market-Fear-Spicy-Pickle-Slammed-in-Editorial/af/archive/20081018-1/