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Momentum21 (93.82)

Halloween Sick Picks

Recs

26

October 26, 2010 – Comments (26) | RELATED TICKERS: GIGM , ARNA , DJSP.PK

My case of bottom feeder's disease has reached an all-time high today. I have a pretty good streak of success going with wins like JAV, KV-A, FOLD, EXEL, CFW, CDII and ANTH to name a few. Only KV-A is actually a multibagger but these are tickers where I have already booked some solid gains...there are some others like S, STD, DYP and TSYS that are still "open" and playing out. 

More recently I think I might be tempting fate and putting my streak "winnings" in grave danger. 

Here are the sickest of the sick picks:

ARNA - I went against the better judgment of CAPS biotech guru zzlangerhans and held my position through Friday's FDA decision. I own the stock at $1.85 and was actually thinking that the "soft" rejection would have propelled it forward from Friday's close. Not the case...and now I have fallen in love with this underdog and want to be a long term long and join the ranks of crazies who think this thing will be in your local CVS in 12 months. 

AIB - We all want to find the next Citi 4 bagger. This play is a bit delusional but I am a proud holder at $1.14. I doubled down today when I saw Porte buying for his "virtual fund." He gave me the confidence to see my bad idea through!

DJSP - I wish I never came across Valyooo's blog post on this dog. I now own a decent position at $1.61 and never fathomed that this foreclosure juggernaut could inspire more hatred and disgust then Enron and BP combined. This is my "most likely to go to zero" but I am starting to use hope as a strategy. Please get the boot off David Stern's throat! Somebody has to send these garbage loans to a better place. 

...and in an attempt to cover my tracks on these 3 picks I went for the Hail Mary, 5 bagger/ticker scam known as GigaMedia (GIGM) today. I bought at 1.75 and like the others I am convinced that I picked the exact bottom because golly...how can thinks get much worse for any of them?!? And besides, I think BravoBevo gave them a green thumb recently...how can I fail from here?

Anyway, I just wanted to post these sick ideas so some newbie investor can learn what NOT to do if they want to sleep soundly at night.  : )

BTW - I also doubled my position in MSFT today right before it "took off"...that is the only rational thing that I have done in weeks! 

What's your sickest pick this month? 

 

26 Comments – Post Your Own

#1) On October 26, 2010 at 11:37 PM, MyunderratedLife (72.35) wrote:

How big a portfolio are you running?

I ask because this would be a very daring series of positions if you run a "significant" amount.

I shared your in the glory of ANTH, and FOLD, although I only got 50% on ANTH because I was trigger happy. 

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#2) On October 26, 2010 at 11:45 PM, Momentum21 (93.82) wrote:

MyunderratedLife - Each of these picks are around 2% of the current total...being down 38% in DJSP already makes that one a bit overweighted right now obviously... thanks for checking in. FOLD was nice...keep thinking those thoughts...: )

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#3) On October 27, 2010 at 12:11 AM, MyunderratedLife (72.35) wrote:

In light of this type of speculation, today I began a small position in SVNT during afterhour trading.

Maybe worth a look...

 

I have been monitoring AIB for sometime as well, not sure how I feel about it.  I think after a string of gains I feel particularly risk adverse... 

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#4) On October 27, 2010 at 12:23 AM, Momentum21 (93.82) wrote:

Yes, of course...I was looking yesterday and like it even more under 12. Put AIB out of your mind and focus on SVNT...I should have done the same... : )

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#5) On October 27, 2010 at 12:25 AM, HarryCarysGhost (99.74) wrote:

Am I sick for researching Spkl.ob (Spicy Pickle).

T.S pick and I' ve been looking at it.

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#6) On October 27, 2010 at 12:29 AM, Momentum21 (93.82) wrote:

Not at all...I like the looks!  Too safe to be sick...

Founded in 1999, Spicy Pickle Franchising, Inc. (SPKL 0.07, 0.00, 0.00%) serves high quality meats and fine artisan breads, baked fresh daily, along with a wide choice of eight different cheeses, twenty-two different toppings, and fourteen proprietary spreads to create healthy and delicious panini and sub sandwiches with flavors from around the world. As a leading "fast-casual" concept, Spicy Pickle restaurants offer menu items that are far beyond traditional fast food but without the price point of casual dining. The hallmark of a Spicy Pickle restaurant is quality food, great service and an enjoyable atmosphere. 

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#7) On October 27, 2010 at 12:34 AM, TMFBabo (100.00) wrote:

Hello, my fellow DJSP holder! I hope you haven't added since you said you did at $1.56.  I was tempted to add at $0.92, but I didn't.  It probably would've been best to buy now, at its bleakest, but there's nothing that could happen that would make me sell other than this headline: "DJSP files for bankruptcy". 

It's still just a 2% position (at initial basis anyway) and will be paid for by my profits from other stocks I've realized in the past few months.

I'd be careful about following Bravo's CAPS picks (or anyone's CAPS picks) with real money.  Some of them are purely technical picks just to take advantage of stocks trading in a certain range.  He does of course have some picks backed by solid research, but some are quite speculative and you don't know which is which unless he pitches them.

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#8) On October 27, 2010 at 12:49 AM, Momentum21 (93.82) wrote:

bullishbabo (100.00) - my friend...thanks for checking in! I did add a small amount at 1.08...when it hit .94 last week I thought for sure it was over! Whatever the outcome buying DJSP will go down as being the sickest play of the year I think. 

And yes, I am careful about following others but with any of the picks listed here, I am not sure that research or even divine intervention would matter...these are simply pot odds on survival. : ) Having you and Bravo on my side just makes me feel better!

 

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#9) On October 27, 2010 at 12:55 AM, MyunderratedLife (72.35) wrote:

Babo,

What Bravobevo pick are you alluding to? 

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#10) On October 27, 2010 at 1:12 AM, Momentum21 (93.82) wrote:

#9 - I referenced Bravo's CAPS pick of GIGM in the post. I think that is where the reference came from...

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#11) On October 27, 2010 at 9:50 AM, Momentum21 (93.82) wrote:

And I forgot to mention IDRA which was another purchase inspired by the now famous GBMB portfolio...

Something tells me I won't truly learn my lesson with biotech gaming, I mean investing, until the bottom falls out and my bottle of Herradura hits the pavement.   

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#12) On October 27, 2010 at 10:14 AM, TMFBabo (100.00) wrote:

Oh, you're looking for the sickest picks.  Here goes:

DJSP: I think I bought too early, but I'm holding 12+ months and letting it all play out.  I still believe there's a chance business starts back up a year from now even though it may look at times like the stock is going to zero.  I wouldn't advise anyone follow me into this kind of pick.

PRFPF.PK and CMZPF.PK: These are oil/natural gas plays in similar situations (just became cash flow positive, renegotiated their debt, etc.) and they each tie for 2nd biggest holding in my portfolio.  They're both traded in Canada and on the pink sheets and trade below $1.00 right now. 

I think the chance of bankruptcy for both companies is well under 50% and there's potential for multiple bags in each one.  I intend to hold the two as a pair and let them both play out to reduce company risk.  There's not much information about either company online (especially PRFPF.PK), so you have to trust your own interpretation of the company filings.  

CHBT, GFRE: These two and half of my other Chinese micros have been called frauds at various times.  In fact, CHBT was called an outright fraud by Citron Research sometime before I bought it.  I do not think every Chinese company is a fraud and if the financials are accurate, they stand to gain at least a double over time.

Here's how I justify the worst case: half of my Chinese holdings go to zero and the other half, being undervalued and not fraudulent, will double.  I will at the end have earned a return of 0% (neither a loss or a gain) but I will have taken several blows to the stomach for having endured that misery.

If one cannot allow them to play out correctly and let some of them go to zero, one should simply not buy them at all.  I don't think every Chinese company traded in the US (or even half) are fraudulent, but my worst case scenario has allowed for half of them to be fraudulent. 

I am absolutely going to let all of them play out and hold them together as a basket, unless I see the headline "XYZ is going bankrupt" like I'm doing with DJSP.  At that time, I'll sell that one and let the rest of them play out.

Now that I look at it, I think a significant chunk of my portfolio would make others' stomachs churn.  I am confident in my investment hypotheses, but I would never wish these stocks on others without knowing that their stomachs are stronger than mine (I don't talk to others long enough to find out).

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#13) On October 27, 2010 at 10:48 AM, Momentum21 (93.82) wrote:

If one cannot allow them to play out correctly and let some of them go to zero, one should simply not buy them at all.

This is a critical point...and I think the complement point would be that one needs to allow the "double" to play out. Sick picks make you want to sell at the "real bottom" and also before your reward has fully blossomed. Simply booking a 25% gain when risking everything will catch up to you quick... 

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#14) On October 27, 2010 at 12:05 PM, TMFBabo (100.00) wrote:

Great point.  It's one I learned only recently, since I never tried my hand at multiple-bags-or-bust properly till now.  If you buy a triple-or-nothing play, you'd better try for that triple and not book a small gain.  The expected value is only 50% for that type of play if half of them actually triple and half go bankrupt. 

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#15) On October 27, 2010 at 12:45 PM, dragonLZ (89.48) wrote:

Why do you guys invest in these risky / crappy companies at all?

I don't get it.

p.s.

Whatever your reason is, I still wish you a lot of luck / multiple bags. :)

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#16) On October 27, 2010 at 12:47 PM, dragonLZ (89.48) wrote:

Btw., I honestly thought the title of this post was Halloween Six Pack... 

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#17) On October 27, 2010 at 12:59 PM, Momentum21 (93.82) wrote:

#15 - I don't know either but here are the top reasons that might be possible:

A subconscious desire to self destruct... 

A passion for finding a gem amongst the poop...

The need for interesting blog material...

Love for the underdog...

or perhaps I am just sick.  : ) Let's hope some of these babies get hot!!!!! 

And when all else fails a six pack always comes to my rescue! From RedHOOK of course... 

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#18) On October 27, 2010 at 4:37 PM, Seansonfire (28.19) wrote:

I have been looking a AIB a lot lately, as there loans seem to be turning the corner since last year.  I have had a thumbs up for a number of months in CAPs and now am looking to pick up some in my RL Portfolio.  They still have a long way to go, but I think they may be out of the woods from going under for now.  The real question for me right now is how cheap can I actually get this stock.  $0.50 might be possible?  If so i am definitly behind that one.

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#19) On October 27, 2010 at 5:28 PM, Momentum21 (93.82) wrote:

I pray to the heavens above that you don't get your price. That's a long way down from here and would be painful experience to endure. Nothing personal though...

Don't get so greedy I say...hold your nose and pull the trigger! : )

Only kidding of course...the wonderful thing about sick picks like AIB is that .50 is often much closer than it seems.  

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#20) On October 27, 2010 at 5:38 PM, TMFBabo (100.00) wrote:

Why do you guys invest in these risky / crappy companies at all?

I admit DJSP is straight crappy, but I picked my other holdings over the rest of what the market offers me on purpose.  Some of my holdings honestly stand to triple or more with little chance of bankruptcy.

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#21) On October 27, 2010 at 6:00 PM, Momentum21 (93.82) wrote:

#20 - dragon had to be a bit sarcastic there...

He sold me with his pitch for WL for God's sake! That pick falls right in line with all of the above. Of course he wasn't sick enough to buy it in RL but he pitched it darn good.   

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#22) On October 27, 2010 at 10:23 PM, TMFBabo (100.00) wrote:

I haven't figured out dragon's sarcasm yet.  Sometimes it's scathing but meant in jest and sometimes, it's something else entirely.  I do know he doesn't mean harm in general and we're civil with each other, so I'm good with him commenting whenever.

Momentum21, I can't figure you out other than your love for GBMB style picks.  What type of investor are you? I looked at your past blogs and they're mostly bottom-grabbing alerts.  

I like to think I'm a value-focused investor and I like to keep tabs on CAPS members like JakilaTheHun (really glad this guy started blogging again), UltraLong, AAOI, TMFDeej, Bays, anticitrade, mrindependent, etc.  Your favorites list is too huge and diverse to glean any specific style from it.

While I have plays that are bottom-grabbing in nature like yours, I'm only grabbing bottoms because the price has finally reached a point where I believe the risk/reward is favorable.  I won't do it just because it might be a bottom.

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#23) On October 27, 2010 at 11:04 PM, Momentum22 (29.05) wrote:

bullishbabo (100.00) - thanks for taking time for trying to figure me out...I would like to believe that posting helps me to reflect upon why I act the way I do and figure out who I am as well.

The posts often provoke some really valuable criticism that I always think long and hard about...there are some very smart people here and I try to consider everyone's view and learn as much as I can each day. Sometimes I act first and ask questions later...not always a winning strategy but it does have some benefits. 

I fancy myself as a value investor...and I really have become fascinated with an event-driven approach...trying to understand investor sentiment and what moves sectors and individual stocks is as important as navigating financial statements (an area where I don't add much value).

Obviously all sell-offs are not created equal and biotech bottom-grabbing is a whole different ball game. I am still learning and really hope to improve my accuracy in figuring out where the risk/reward is favorable! I will definitely continue to look to you and the others you mentioned who I love to follow as well... : )

You have actually inspired another post that I will have to spend more time on. I think it is time to zero in on a more focused approach and start narrowing down my mess of a portfolio. My discipline needs improvement...thanks again for taking time to comment here. 

 

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#24) On November 01, 2010 at 2:48 PM, BadCopNoDonuts (< 20) wrote:

I love these high-risk bottomed out specs.  I have no qualms about jumping on them for $500 or $1000 a pop.  The risk/reward ratio definitely seems attractive.  I just bought small chunks of almost every stock mentioned in this comment section..:-)

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#25) On November 03, 2010 at 11:59 PM, MyunderratedLife (72.35) wrote:

AIB, IRE, NBG, STD

When will it be eurobank time?  The shares are disintegrating to a pathetic level... 

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#26) On November 04, 2010 at 12:54 AM, Momentum21 (93.82) wrote:

MyunderratedLife (32.21) - I own 3 of those 4 you mention but STD is the only one I would recommend to a friend. Hopefully "eurobank time" hasn't come and gone...but adding to STD at this point seems to make sense, they are definitely in a different league and pay a dividend at least.  

BadCopNoDonuts (94.64) - glad to hear those chunks are small! I can't tell you how many times over the past week I have wanted to purge my sickness...good luck!

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