Monday, December 27, 2010

Santa's Gone...

... and just when I thought this was the worst Christmas ever, I got rewarded with a minor rally today in addition to some great trading insight over the weekend. I spent a lot of time strategising when I really should have been packing. But I've got half a mind to leave lots of stuff behind and I might just donate a tonne of fun to Oxfam or the Red Cross. I noticed Crate & Barrel is having a sale - yay! Although I would have liked to shop at Neiman Marcus instead, I'm going to do some low key living until I ascertain whether those companies I have job interviews with are worth getting excited about. I remember when I first moved to Belgium, I had nothing but a bed for almost a year. Since I've been through that, I can do that all over again until I settle in. And for my purposes, a bed is really all I need. I mean, you can even do it on the floor - trading that is.

So back to trading... I plan on investing in several penny stocks over the next quarter and will aim to bank a 7-40 fold return over the course of the next few months. How can this conceivably happen? Well, in addition to being in high beta, high volume penny stocks, several other factors also need to be present in order to make a penny stock an interesting proposition:

1. actual revenues
2. growth
3. net cash on the balance sheet (as opposed to debt)
4. also make sure you don't shoot yourself right in the foot, which you will do if you get into a penny stock with debt and a penchant for losing money...

Buy a stock that has 1-3 of the aforementioned criteria at the lowest possible price and it's only a matter of time before it goes up if it is well supported by high volume and high beta. I've also been looking at 3 month charts for penny stocks. If I see there's a pretty wide spread on a 3 month chart, then that's basically a stock that I'll be jumping on asap.

So essentially, I'm going to invest just enough that'll make a 7-40 fold return worthwhile over the next three to four months. I'm going to invest at the lowest possible price. And I'm going to target different limits with each penny stock. I have several penny stocks I'm going to target at crazy bid prices.

I'm also going to continue to invest in undervalued and overlooked large cap stocks on a regular basis. Earnings season for the financial sector is coming up soon, isn't it?

+0.09% on the SBA
+0.80% on the Roth IRA


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