Session of 02/20/2007

[flore34620]

if your into penny stocks have a look at sbjx

[David Randolph]

Just two more things about understanding fundamental analysis:

- One need to understand and incorporate the fact that shares are a part of a company, a business. Then invest from a business perspective;
- As in technical analysis, it's all about the trend. The fundamentalist doesn't know the future, he just extrapolates current trends, in terms of revenues and earnings to come up with a future value.

That's what I've done with CPNE.OB, and that's why I have a 57% profit on that stock at the 3 Stocks on Fire Portfolio and will keep holding, because I see a much superior value by projecting the recent fundamental trends into the future (well, in fact Michael has been doing most of the job. It works ).

[wontfindaname]

Thanks David.

[nullzero]

Speaking of CPNE! Its exploding to the upside  .

[oicpecnoc]

A couple of your old picks.  Both with rumors lately.

INSM  NYT article and a stipulation agreement between TRCA and INSM in their trial leading to speculation of settlement.  Lazard reitierates $3 target 2-19-07


XMSR-  I took a small position in this at 15.50 today based on the volume and proposed merger.  It dipped below 15 but now has come back.  I guess 50 million shares traded of a $15 stock just got my attention on a dip.

[mbaugh]

David, I just wanted to say that the BIGGEST thing you have taught me is "PATIENCE" & "PATIENCE", you are very patient even in the short-term! You have hit 300% in your main portfolio! WOW! This does indeed win the game and keeps you in longer! Great Job!

[David Randolph]

BBC is a good example to: "when it looks too good to be true, it probably isn't true".

Here's the analysis I made on January 6, 2007:

«The video analysis:

http://video.google.com/googleplayer.swf?docId=-1959434691382203537&hl=en

General Overview:

- Technical analysis is bearish
- Numbers, especially the net profit margin, looks too good to be true
- AMEX letter and shareholder's lawsuits against the company for providing false information
- Revenue numbers are probably real, the stock can be more safe at a below average revenue multiple, say around $3

Final comment:

The stock will probably be up a lot on Monday (closed 14% higher in after hours) due to the following press releases Friday after the closing bell:

• Bodisen Biotech Receives Preliminary Determination From Amex
PrimeNewswire (Fri 4:46pm)

• Bodisen Biotech Provides Clarifying Information on Past Consulting Relationship With New York Global Group
PrimeNewswire (Fri 9:03pm)

I fear small Chinese companies with very high net profit margin numbers. Perhaps I'm wrong on this one, but been burned before. Since the chart says "sell" I don't trust the financials. Good luck to anyone holding, though.»

The stock is down 20% since my initial analysis.

[David Randolph]

A couple of your old picks.  Both with rumors lately.

INSM  NYT article and a stipulation agreement between TRCA and INSM in their trial leading to speculation of settlement.  Lazard reitierates $3 target 2-19-07

XMSR-  I took a small position in this at 15.50 today based on the volume and proposed merger.  It dipped below 15 but now has come back.  I guess 50 million shares traded of a $15 stock just got my attention on a dip.

I dislike INSM, please check my latest take on the Stocks Covered List, under "N". I think that lawsuit doesn't make much difference to the bearish case on the stock, which to me is: even if they approve and commercialize their main drug, iPlex, a drug to cure children with very small stature, the market potential of the drug is too small, because just 20 or 30 thousand children suffer from the disease in the US.

As for XMSR, if you recall correctly, my trade was short on the stock above $20 (I was right, but lost a bit of money anyway, because my hands were weaker back then and shorting is a loser's game over the long term). The merger with SIRI is a very positive step in the right direction, but the balance sheet is lousy ... and both companies have the horrible habit of diluting shareholder's value every chance they get. I wouldn't buy on this news, but good luck

[kpusan]

RICK

Fairly priced?

[David Randolph]

QCC analysis made on the 8th of January, 2007:

«Here's the video analysis for QCC requested by Terliso:

http://video.google.com/googleplayer.swf?docId=1580140004511543256&hl=en

General Overview:

- Long term technical trend is bullish. Important resistance at $3.03.
- I don't know what this company does:
   - The balance sheet is odd;
   - The share count is rising a lot;
   - Gross margin is 80%, net margin is 70%;
   - QCC is a strange stock, I don't know what to think of it.

Outlook: Neutral»

I didn't know what to think of it back then, and I still don't know. The stock is down 6% from my initial analysis.

[David Randolph]

David, I just wanted to say that the BIGGEST thing you have taught me is "PATIENCE" & "PATIENCE", you are very patient even in the short-term! You have hit 300% in your main portfolio! WOW! This does indeed win the game and keeps you in longer! Great Job!

I wasn't even looking, the Main Portfolio is up 302% since inception in April 2005.

Call me crazy, but I can't feel happy about it. I've taken so much punches and even cried so much during my 11 years trading career, that I simply don't feel happy or sad when winning or losing. I don't care. My happiness depends on other issues in life.

The market has no power over me. This game is between me and me. I choose when to be happy or sad, not the market with its fluctuations. This is the only way a speculator can do this job for years and years and live a happy life.

[la-onda]

nice comment David, applause (what about a happy family e.g.?)

what about CRAY ?
tia
Oliver

[kslifka]

MLSS.ob  Medical supply company with market cap of 32 million.  Strong uptrend.

[David Randolph]

Hi Bourbon

DSEN.OB has an extremely low average traded volume, just $17,000 or so traded today, so I couldn't buy the stock even if I wanted (there's always the risk of liquidity dropping so low that the bid/ask spread gets to 10 or 20% - I sure don't like that).

But, strong day on Thursday, I hope you're in before that

Fundamentally:

- Market cap is $10.2 M. The Company conducts telephone market research and provides data entry services for third parties.
- Balance sheet is weak with negative working capital (although just barely, a negative working capital is never a good thing). By the way, let's check the share count trend on that magic link: ohh, no data available for DSEN.OB.
- Revenue trend is positive, revenues are growing every year.
- Q3 results were spectacular, with $0.04 EPS and $4.2 M in revenues. If they maintain this profitability, the company will earn $0.16 in a full year, and that would put the earnings multiple at 3.7, which is an outrageously low valuation.

You're right Bourbon, DSEN.OB looks very attractive at this point from a technical and fundamental standpoint, it's a pity volume is so low. Good luck

[David Randolph]

SEC file just out for CPNE.OB showing JLF Asset Management is holding 3,037,500 shares, or 6.42% of the company (this means a share count of 47,313,084, roughly equal to the Q3 share count number, so there's no dilution at all).