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EverydayInvestor (< 20)

October 2008



My Jesse Livermore Moment

October 24, 2008 – Comments (25) | RELATED TICKERS: CEG.DL2 , BRK-A , BRK-B

It is said that on the day of the 1929 stock market crash, the great speculator Jesse Livermore returned home to find that his wife had packed up some of their necessities from their mansion and moved them into the servants' quarters. She believed that he had lost all their money. On the contrary, he made more that day than on any other day of his career.   [more]



Yes, some people are this stupid

October 18, 2008 – Comments (6)

From a comment in response to Chuck Jaffe's good column on why Spicy Pickle (OTC BB:SPKL) sucks:  [more]



Now is a Good Time to Buy Back Stock

October 16, 2008 – Comments (7)

Many companies borrowed money to buy back stock when their stock prices were high. Now that stock prices have fallen they are conserving cash. That is backwards. One tiny little company did the opposite. That company is TSR, Inc. (TSRI: $2.1501 -7.32%, market cap: $9.8M). I have previously written about TSR, recommending it when its stock price was about twice as high as it is now (oops), and then writing about my attempt to get the company to spend its cash hoard. The company instituted a buyback plan but bought few shares. Then today it announced that it had just bought back over 10% of the outstanding shares at a price of $2.30 per share. At this price the company bought its stock for 80% of its net quick assets (cash + receivables + non-current Treasury bonds). This will be accretive to book value per share and will not harm the company’s liquidity. That is how companies should use buybacks.  [more]



Thursday Night Music Video & The Beneficial Effects of a Market Meltdown

October 16, 2008 – Comments (1) | RELATED TICKERS: IOC , PRKR , SUF.DL

People are bemoaning the loss of wealth of this market crash, yet I see one really good thing that has happened -- equity costs have increased. They have increased most for the riskiest and sketchiest companies. Take a look at some of my favorite bad companies: Razer (RZ), Parkervision (PRKR), Interoil (IOC), Sulphco (SUF), Research Frontiers (REFR), Altair (ALTI), and Medis Technologies (MDTL). All of these are terminal shorts in my opinion. Their crashing stock prices will hopefully prevent them from raising more money by selling stock, thus leading to their demise. Remember, the point of the stock market is not to make me rich but to allocate capital. The world will be a better place when money goes to real companies and not pipe dreams peddling vaporwear like the above.   [more]



The perils of idiocy and what that means for The Sharper Image "Investors"

October 13, 2008 – Comments (11)

The stock market is pretty efficient. This is especially true of large-cap stocks and well-followed stocks,such as Apple (AAPL), GE (GE), and Research in Motion (RIMM). Even small-caps are generally priced fairly well. However, in the deep, dark corners of the markets, occasionally stocks can have glaringly absurd valuations. This is typically the case in low-priced OTC and Pink Sheet stocks where short sellers and institutional investors do not normally tread. A great example of this is TSIC (Pink Sheets: SHRPQ), formerly known as The Sharper Image.   [more]



All Life on Earth Will Not Be Extinguished; A Time to Buy

October 09, 2008 – Comments (26) | RELATED TICKERS: BDK.DL , NED.DL , MSFT

No Youtube videos. No wit. Just one concise argument. I have for a period of time been a bear, arguing that the mortgage crisis was deeper than most believed. Times change, though people never do. The worst is not over, but there is blood in the streets. I sense panic in most of the investors and traders I know. That tells me that it may be time to buy. Another indication that it is time to buy is that valuations are getting absurdly low in some cases. Money is made not in selling during a crash, but in buying at the bottom, when the future appears bleakest. While I have no clue if a bottom will come soon, I will be increasing my allocation to debt and equities with each significant drop in the markets. Stocks could drop another 50%, although I doubt it. Anyway, I will be buying all the way down. As you read this please keep in mind that I am a professional short seller. I do not encourage buying or optimism lightly.   [more]

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