My smallest long position, Ciena, reported a great quarter but gave terrible guidance and talked about struggling into year-end with a few “variables.” I don’t like the commentary out of the conference call either, but I’m not jumping to any rash decisions. I’m making some phone calls into industry people and analysts and will let you know if and when I either add to it or sell it. This call and the guidance need to be analyzed first.
Meanwhile, Ambarella is up for earnings tonight and the stock is putting in a big intraday move higher after a weak opening. I’ve recently been building this stocka and while I do expect a strong report, it’ll need to also give some strong guidance and update us about iPhone and/or other new opportunities. Regardless, I’d expect to buy some more if the stock does get hit as I expect the demand for its video chipsets will be through the roof next year.
Now onto today’s report.
You have to be aware of these speculative bubbled frenzies and paid-promotion scams even if you’re just an average Joe investor. I personally have received dozens of thank you’s from readers who listened to my advice to stay away from these lousy investments and themselves saved millions of dollars in unnecessary losses. Remember my simple rule: don’t ever buy a penny stock.
Here’s an audacious real-life, real-time example of how this penny stock promotion game works. Indeed, this is the most brazen stock promotion game I’ve ever seen, and I’ve seen them all.
This company gets paid $17,500 dollars by BreedIT, a lousy penny stock trading at 19 cents per share, to write an article touting the BreedIT stock which they then pay to get sent out over the newswire services and which then even gets picked up on Marketwatch’s Newswire feeds.
This in particular article is all the more outrageous as it quotes yours truly and cites Marketwatch to try to gain some semblance of credibility: “As noted by Marketwatch contributor and major Scutify shareholder Cody Willard, Aegion items like ‘water and wastewater, Brinderson, corrosion engineering and cathodic protection’ will be in direct demand. It’s notable that Willard is adamant about only investing in blue chip plays. Monsanto and billionaire investor George Soros have gotten their hands dirty and pushed to get into the marijuana business.”
Ironically, the article they’re citing that I wrote for Marketwatch is all about avoiding penny stocks like BreedIT. Here’s a better, more apropos quote from me in that same article where I mentioned Aegion as a great long-term marijuana play: “I’ll give you one more public service announcement that penny stocks up 1,000% on hype will take you to the poorhouse. Do you think I’m wrong that these penny pot stocks like $PHOT, $CBIS, $HEMP and $MJNA are going to leave retail investors with big losses when it’s all said and done? Comment below or come join the discussion on this stuff over on my Scutify page.”
You can click on any of those symbols and you’ll see my track record and historical analysis for each one. In fact, every single one of those four pot penny stocks I mentioned in that article are down 60%-90% since I wrote that. Just in the last couple days, I’ve added 150% to my performance on Scutify Sentiment rankings as two pot penny stocks and one other penny stock Bearish Sentiment Views expired.
Meanwhile, Aegion is up about 10% since I wrote that article. But back to BreedIT — BreedIT has generated some $6,000 in revenues each of the last two years (you read that right, six thousand dollars in sales in 2012 and 2013) and would need to grow that number 30,000% to get to sales to 1x market cap. And the kicker is that up until the recently popped marijuana penny stock bubble got started, this BreedIT company which currently says it’s in the business of “develops, licenses, and markets agro-breeding solutions for plant breeders and researchers” was actually called ProGaming and touted itself as “an online gaming platform for multiplayer skill game competitions on the internet.”
So let me be clear since this company and it’s hypester shills have tried to associate my name with it — I predict that BRDT will be right back down to its 52-week low of 3 cents per share and that it’s headed much lower than that over the next few years. I don’t think it has any product for “agro-breeding solutions for plant breeders” that will ever sell enough to make this company worth $1 million, much less the current $17 million market cap it has.
After I mention how much money I have saved warning retail investors about pot penny stocks, the attacks commence immediately. Insiders and hypesters are sensitive about people calling out their scams. My favorite attack from the hypsters recently is the guy on Twitter who calls me an idiot for having nailed an 80% crash in ERBB. Now the hypesters are deleting their tweets to me cuz I made them look stupid by calling out their scams. Sigh.
Forget penny stocks. The key is to have a strategy for finding the best revolutionary stocks on the planet and navigating the broader market swings with them. I covered much of this recently on a panel I sat on with Bill Harris of Personal Capital, Jim Hurd of Green Science Exchange, talking about how “disruption from drones, robots, wearables, nanotech, and cleantech is coming our way.”
Sticking with the best revolutionary stocks that I’ve outlined for years such as Apple, Google, Facebook while avoiding penny stocks and other scams will put you far ahead of most retail investors. It still won’t be easy and it will be stressful, but a good game plan for the long-term is what it’s all about.
I don’t know when the ongoing bubble-blowing bull market will pop or what will actually cause it to pop. I am doing my best to look out over the next year or two and get a feel for where the economy, earnings and stocks and other financial assets are headed, but when it comes to investing, I want to just slowly scale into the most revolutionary stocks on the planet and use tranche-trading to maximize my gains and minimize my risks over the next decade or two.
If and when the markets do crash, which could be another 3 or 5 years out for all I know, I expect I will have navigated it by having lots of cash on the sides to continue building my favorite revolutionary stocks. Longer-term I think we’ll have 10x our money on another Google or another Apple kind of 100x gain in some of our stocks, and that’s the reason I risk my hard-earned capital to begin with.
In the meantime, there are also great pitches being thrown at all traders as the markets bubble and swing. I’ve recently been focusing some on finding great bubbled up tech shorting opportunities, and there are a plethora of them in this bubble-blowing bull market.