kfisherprotege (31.49)

Week 39 - Addendum 1

September 25, 2008 – Comments (0) | RELATED TICKERS: UPG , ERS , CFS.DL

I must admit, I got off my game a little bit and piled onto the boatload of opinions on the current financial sector meltdown in my recent post.  As FloridaBuilder puts it, we are back to being an investment site (or at least we should be).  I will return to writing about personal stock strategies, portfolio performance rather than reacting to every little headline on how the Feds are handling the current crisis.  After all, a buy and holder like me should be looking months and years out and positioning my holdings accordingly.

Instructions to that stone-age brain of mine: "Don't chase performance, Don't react to whipsaw market fluctuations."  I said it.  Now I feel much better.

I have a further take on FB's suggestion of buying penny stocks that are beaten down 80% or more.  It goes something like this.  Screen micro-caps (aka penny stocks) low in price, with very low P/S ratios, low institutional ownership, have positive YoY earnings, cash rich, and that have been ignored by analysts over the past few years (flatline average volume).  Personally, I like and use the screener on Google's finance page.  From those, target the ones rising on unusual volume over a few weeks.  At this stage, price matters less than volume.  Take a long position when all conditions are right and watch the stock take off!  Granted, some will burn out and hit the wall, but if at least a couple picks are multi-baggers then it will pay off.  I'm looking at UPG, ERS, CFS, CNOA,OB and a bunch of others right now.

Now I don't know if the current environment is conducive to a growth strategy like this or if I should stick to a value play.  Furthermore, my real portfolio tied up in long positions of other beaten down stocks right now, so the point is rather moot. 

There.  A complete blog with no mention of: Paulson, Congress, bailout, tax burden, or idiots.

-kfp