TFN eNews 09/01/2009: Musings of a reluctant optimist… and a great recommendation!
Published via e-mail broadcast on September 1, 2009
In today’s TFN eNews:
* Reader questions
* The safety of subjunctives
* Debbie always rings twice…
Dear TFN Reader,
Biotech and small pharma stocks have made a big splash over the past couple of days. We’ve seen — and in some cases taken! — substantial gains in our open positions, both in our TFN recommendations and our premium service HSC picks.
So despite my belief that the market’s recent gains are based on not much more than happy thoughts, there’s some reason for reluctant optimism. If you’re in the market to make money, that is…
HSC Member Mark M. feels our pain, especially when it comes to taking profits on rising stocks.
He writes: “Well, I appreciate your (our) predicament with this crazy Vical Incorporated (NASDAQ:VICL): WOW! and 45 cents disappears POOF!! I’m a Canadian I’m supposed to be conservative but what has happened to the American ‘Let it ride!’ or ‘Let’s bet it all!’ mentality. As soon as there’s a little scrap of meat on the table everybody dives for it… (profit-taking ).
“We’ll I’m betting with you guys at HSC, regardless of all these sellers: The swine flu problem will still be around tomorrow and likely the stock will again reflect that.”
VICL, by the way, just turned around again and is on its way up.
*** Don’t tell Laura, but I’m passing on one of her “between-issues” recommendations to HSC readers to you. You’ll see why:
This is what she sent out today:
“You saw the jump (89% in just one day!) Cerus Corporation (NASDAQ:CERS) made on its INTERCEPT system’s approval by the Swiss for the extended storage of blood platelets. Many of you banked gains anywhere from 53% to 72%. [We recorded a 54% gain for the HSC portfolio on August 19.]
“I remain bullish on this company. Now that the price has again dropped, I think we should get back in. It’s all about the company. Here’s why:
“Unlike whole blood donations, which can be stored for up to 42 days, platelets are typically held for just 5 days. Cerus can treat those platelets to allow that storage time to be extended to 7 days. This is what the Swiss have embraced.
“As a regular platelet donor, I’m in a unique position to know how crucial this is. Within 7 days of my last donation, a charming lady named Debbie calls me to schedule my next. Sometimes she even provides specifics, ‘We have 3 liver transplants scheduled and there are 2 shooting victims at area hospitals. We really need your help.’
“A neonatologist friend tells me that sometimes, it’s difficult to locate even a thimble-full of platelets for her tiny patients.
“Then there’s the constant need from cancer patients going through chemotherapy.
“The ability to store platelets safely for a longer period would have a significant impact. But it isn’t just platelets. The company’s technology is designed to destroy pathogens in all donated blood components. Many of their systems are in place in different countries in Europe. I’m confident Cerus will get approval from the FDA when they’ve completed their ongoing Phase III trials.
“Let’s get back in so when can enjoy those gains when they do! I recommend you buy shares of Cerus Corporation (NASDAQ:CERS) under $2.”
Again. You didn’t hear it from me.
*** We’ve received a whole bunch of reader questions over the last couple of days. I picked the ones that you, too, may have wondered about.
TFN eNews reader Juergen B. “I’d like to have some advice as to how to establish a decent portfolio and have the ability to track and place or withdraw certain investment transactions as per your recommendations. I do not have any investing experience but am a fast learner — especially if I make a profit.”
True, nothing provides more positive reinforcement than profits taken on lessons learned.
The most simple way to start is to open an account with the online broker of your choice. We have list of cheap online brokers you can use at TFN Free Research Report: How to trade penny stocks. It not just applies to penny shares, but anything else as well. (And no, we don’t and never will have any financial incentive or stake in recommending a particular broker…)
Simply transfer a comfortable amount of “play money” from your bank account to your brokerage account… and simply pick the stock whose line of argument you agree with.
If by “decent” you mean a diversified portfolio, I’d be inclined to say “don’t bother about diversification” right now: This is still an incredibly volatile market. And as the last two crashes (November 2008 and February 2009) have shown, there’s no asset that is really safe.
We think this is a great time to use select stocks to get a head-start in speculative investing. (Let’s face it: ALL investing at this point is speculative!)
Start small, with money you can truly afford to put at risk. And use any gains you make as capital for subsequent speculations!
*** TFN eNews reader and HSC Member Ron S. has a whole bunch of questions for us: “Do you offer other services? Are you affiliated with Penny Stock Fortunes? A number of the companies you recommend are rated poor for financial strength and effectiveness. Is that common with lower-cost offerings?”
Let’s check them off one after the other:
TFN currently offers two premium services to interested readers: Hot Stock Confidential (which focuses on easily traded U.S. stocks and ADRs with great short- to-medium-term potential). And we have an options service called TFN Strategic Trader, which is run by TFN’s resident guru Andrew Snyder.
Based on popular demand, we’re currently in the final phases of creating “Penny Stock Confidential” — which will focus on high-volatility penny stocks and be restricted to a small group of subscribers. We’ll have more about that service in a week.
Regarding Penny Stock Fortunes: Back in the 1990’s, PSF was part of the Taipan Group, which I ran from 1989 to 2007. It’s been part of Agora Financial Publishing since around 2001. While TFN, Taipan Group, and Agora Financial are all owned by Agora Inc. in Baltimore, we’re independently run businesses and (more or less) friendly competitors.
About that “poor financial strength”: In a normal market, we like to look at solid financials and earnings. In this market, we spend a lot of time at the TFN office debating fundamentals and pure speculative potential. And decide on a case-by-case basis what to recommend.
There is a highly speculative group of stocks that we frequently like to recommend: Speculative biotechs. Often, these outfits have no earnings, are burning cash, but are working toward a breakthrough. If that breakthrough consists in an actual product, product approval, actual sales, or merely a media frenzy doesn’t really matter to us.
If we went in for the speculative catalyst, we take any gains it may generate, regardless of fundamental respectability.
*** TFN eNews reader Rudy D. writes in response to one of our invitations to join TFN Strategic Trader:
“Why do you guys always use the frash ‘could’, as in ‘China’s “repo man” could bring you gains of 1,389%’?”
We live in a litigious country, Rudy. A country where the heart-felt, forward-looking prospect of 1,389% gains could be the reason for a complaint if “only” 1,388% or 1,390% are achieved. Our corporate lawyers dislike dealing with these cases and have hence condemned us to the perceived safety of subjunctives.
And speaking of grammar: We interpret your use of the term “frash” in its second meaning of “adj., a combination of the words fresh and awesome,” of course.
*** Last week, HSC members were instructed to take gains of :
* 30% on the first half of our position in SpongeTech (OTC:SPNG)
* 23% on Seattle Genetics Inc. (NASDAQ:SGEN)
* and 70% gains CEL-SCI Corporation (AMEX:CVM) in just above a week.
That made for double-digit gainers #48, #49, and #50 for our closed positions this year. And we’ve got slew of other double-digit gainers cooking right now.
How long can you afford just watching how others make money? Join our tight-knit group of profit-takers today!
Quote of the Day:
“The timid civilized world has found nothing with which to oppose the onslaught of a sudden revival of barefaced barbarity, other than concessions and smiles.”
– Aleksandr Solzhenitsyn, quoted by Thomas Sowell
Recommended Reading:
TFN Special Report: The Top Alternative Energy Stocks Under $6
The Top Swine Flu Vaccine Stocks under $20
The 3 Best Chinese Stocks Under $5!
Today’s Top 3 Financial News Stories:
Bloomberg.com – China Manufacturing Grows at Fastest Pace Since 2008 “China’s manufacturing expanded at the fastest pace in 16 months in August, driven by record lending in the first half of the year, two surveys showed.”
MoneyNews.com — Shiller: Why the Rally? Good Feelings “Look beyond the traditional economic links and think of the world economy as driven by social epidemics, contagion of ideas and huge feedback loops that gradually change world views.”
WSJ.com – Health-Care Anger Has Deeper Roots “Recent town-hall uproars weren’t just about health care. They were also eruptions of concern that the government is taking on too much at once.”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
Next Article: 130/30 ETFs: All hype and no reward?
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