Monthly Subscription Financial newsletter August 15, 2005/Jess Ragaza
The Market is now somewhat overbought!
Sell as best you can, starting with your most winning possibilities. I just sold Paradyne Networks (PDYN http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=pdyn&sid=0&o_symb=pdyn&x=53&y=11 - see below for details of this success story).
The Federal Reserve raised the interest rate by another quarter point, for the 10th consecutive time, to put the brakes on the slowly but surely inflationary laden economy. This will definitely dampen the financial markets as well. Although we are still hardly breathing below my forecast of around three percent (3%) average inflation, based on the Consumer Price Index (CPI), for this year which I presume is the most that the Fed would allow, it is certainly prudent for the Central Bank to put on the brakes now "on measured terms" since we have already seen three months - February, March, and April - all above my projection. This means that the moderately restrictive monetary policy will result in cooling the economy with its corresponding slowing effect on the financial markets, particularly the directly traded, non-derivative, equities. The financial derivatives http://www.imf.org/external/np/sta/fd (will be discussed more below), however, may go the other way around, especially now
that more and more businesses are using this tool as a hedge during uncertain times such as now.
On Wednesday, August 10, 2005, following the Fed's decision the previous day, the market opened up enthusiastically with all indices up and all the news brought by the media (television, radio, internet, etc.) were trumpeting this early euphoria. I of course expected the market to come down that day. Well guess what ... It did! This most unusual reversal is just a harbinger of things to come. It is another classic example of the contrarian approach (i.e., to go opposite common belief) which helped yours truly thread through the slippery, but challenging and interesting world of investments: and the extreme success of this newsletter!
Following my advice, my activity has been mostly on the sideline watching and screening for future investments (see below for the results). This preliminary outcome, however, is not necessarily a recommendation because the investment climate is a little cloudy right now. I foresee the NASDAQ http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=nasdaq&sid=3291 now that it has glossed over 2,200 as I have previously predicted to go back down to 2,100 and the Dow Jones Industrial average http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=djia&sid=1643 will pull back to 10,500. Sometimes it is even best not to do anything at all in the stock market other than watch and wait.
As a matter of fact, although I do not recommend this approach, those who have the guts may short sell http://en.wikipedia.org/wiki/Short_sell some securities that are selling much above the average for its industry group such as US UNWIRED INC (OBB : UNWR http://smallcapcenter.com/snapshot_chart.asp?ticker=UNWR). Some Hedge funds href="http://www.google.com/search?hl=en&lr=&oi=defmore&q=define:Hedge+Funds, however, use this tool as well as financial derivatives and are quite doing well.
I emphasize to everyone to be cautious. The price of oil is creeping up again http://www.wtrg.com/daily/crudeoilprice.html touching an intra-day high
of $66 a barrel on August 11, 2005. The market could very well be more or less dispirited for at least two months and may start having life again in Spring. What serendipity! To jump back to life, ... get it?! Patience, my dear.
The stocks in my unpretentious portfolio that were previously recommended and now profitably traded are:
(1) Petroquest Energy (PQUE - http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=pque&sid=0&o_symb=pque) originally suggested in the Financial newsletter April 16, 2004 (http://livinggracefully.com/financialnewsletter_040416.htm);
(2) FREMONT (FMT - http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=fmt&sid=0&o_symb=fmt&freq=1&time=8) which was also mentioned in that issue;
(3) Innexus Biotechnology, the Canadian firm specializing in bringing new Super Antibody technologies into the healthcare industry (IXSBF - http://www.bloomberg.com/apps/quote?ticker=ixsbf&x=9&y=10) which was first announced in the Financial newsletter October 15, 2004 (http://livinggracefully.com/Financial%20Newsletter/financialnewsletter.htm);
(4) US 1 Industries, Inc. (USOO - http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=USOO&sid=0&o_symb=USOO&freq=1&time=7&x=45&y=16), mentioned in the previous quarter’s financial report;
(5) I just traded JOYSTAR INC (JYSR) http://www.smallcapcenter.com/snapshot_chart.asp?ticker=JYSR http://www.smallcapcenter.com/snapshot_chart.asp?ticker=JYSR which I mentioned in a communiqué early this month and published in my book’s web site http://livinggracefully.com/Financial%20Newsletter/Unique%20Opportunity%20-%20Take%20Advantage%20of%20the%20Stock%20Market's%20Oversold%20Condition.htm. Holding it from 4/25/2005 to 5/19/2005 (less than a month) JYSR yielded a handsome more than 450% on annualized basis. But noticing that it followed worst than the general market for no other reason than the general downward trend and its price went down again to 0.37/share on 5/17/05 much ahead (by at least a week) of the market which saw its low on 5/25/04 I placed a limit order again to buy it at 0.38/share. Today, 5/31/05 I was mildly surprised to see that I got it and the stock immediately went back to a closing of 0.44/share on the same day. And sold it at
0.60/share on June 15 yielding an amazing 1,408% on annualized basis even better than the first time! So those who are following my advice must have gotten at least the double whammy within a span of only one and a half (1 1/2) months.
(6) Mirant Corporation (MIRKQ http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=MIRKQ&sid=0&o_symb=MIRKQ&freq=1&time=6&x=32&y=12) which provides electricity and energy-related products and services throughout the world, owns and operates power production and delivery facilities, markets energy and energy-linked commodities and manages the risk associated with market price fluctuations, which yours truly acquired on 4/11/05 for 0.29/sh and liquidated on 7/7/05 for 0.60/sh at an extremely high return (including commissions) of one hundred twenty three percent (123%) on an annualized basis!
(7) Paradyne Networks (PDYN http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=pdyn&sid=0&o_symb=pdyn&x=53&y=11 through its wholly-owned subsidiary, Paradyne Corporation, is a leading developer, manufacturer and distributor of broadband, or high-speed digital, and narrowband, or conventional analog, communications products for network service providers and business customers. The company offers cost-effective hardware and software products that enable business class, service level managed, high-speed connectivity over the existing telephone network infrastructure.
Within a month on a very aggressive and obvious upward movement, it was aggressively trading in the 1.95 to 2.08/sh, unfortunately (I should say 'fortunately" for vigilant and very patient traders) when the market nosedived on Friday, June 24, 2005 due to the price of oil getting back to the $60s/barrel PDYN went back down to 1.80 satisfying my limit order of 1.82! http://www.marketwatch.com/news/story.asp?siteid=bigcharts&dist=bigcharts&guid=%7B28AF4156-9E61-4A05-955E-9882BF46D134%7D.
Following my advice to you last month to "save your winning situations now," I unloaded this stock on exactly the same date as the previous newsletter at 2.54/sh an unbelievable gain of 35.9% in only twenty one (21) days, or two hundred six percent (206%) on annualized bases!
The ones remaining in my portfolio are:
(1) PUTNAM CAL INVT (PCA - http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=pca&sid=0&o_symb=pca&freq=1&time=8)
(2) Liberty Star Gold Corp (LBTS http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=LBTS&sid=0&o_symb=LBTS&freq=1&time=8&x=)
(3) Dura Automotive Systems Cl A (DRRA - http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=drra&sid=0&o_symb=drra&freq=1&time=6), first reported in one of my messages in early December 2004
(4) Integrated Electrical Svc (IES) (http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ies&sid=0&o_symb=ies&freq=1&time=5, subsequently announced in my message dated December 16, 2004
(5) PENDER FINL GROUP CORP (PDFFF - http://charts3.barchart.com/chart.asp?sym=PDFFF&data=A&jav=adv&vol=Y&evnt=adv&grid=Y&code=BSTK&org=stk&fix=), also mentioned in the previous quarter’s financial report.
(6) After noticing that InNexus Biotechnology, Inc.’s very uncommon disparity between its stock price, which was going down, and its excellent public announcement about its Super Antibody technology, I acquired the stock again.
(7) Following the success of Petroquest Energy and because the price of oil can only keep on going up (oil reserves are now dwindling) I also added just recently Montana Oil & Gas Inc (MOGI http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=MOGI&sid=0&o_symb=MOGI&x=22&y=15), a company drilling in the oil-and-gas-rich region of Alberta, Canada. Also check its web site http://www.montanaoil.com/ for the latest update.
(8) Segmentz Inc. (SZI http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=SZI&sid=0&o_symb=SZI&freq=1&time=6)
provides specialized transportation and third party logistics services. The Company's services include expedited airfreight forwarding, ground and ocean movement, transportation management, warehousing management, order fulfillment, and reverse logistics. Segmentz operates locations in several states.
(9) OCA INC (OCA) as an analyst calls it the "McDonald's of braces," provides business services to orthodontists and pediatric dentists. The Company's client practices provide treatment to patients throughout the United States, Japan, Mexico, Spain and Puerto Rico. It nosedived (in the week beginning 6/6) upon discovery of impropriety, but steadily stabilized upon immediate action of its Board of Directors (BOD). From a yearly high of 7.88/sh to a low of 1.75/sh on 6/12 then immediately stabilized and firmly supported in a narrow price range between 1.75 and 1.85/sh (including daily fluctuations). On 7/11, my order placed the previous day, Sunday, 7/10, was executed at 1.76/sh. Then the stock after touching a momentary low of 1.75/shot immediately back up to 1.82/sh. This opportune incident almost tempted me to resell immediately as in a day’s trade. But better judgment led me to stick to my disciplined investing for more profits on a little longer term.
(10) A sizable amount of his majesty, CASH
For possible near term investment, I am presently watching the following companies:
1. ELINEAR INC (AMX : ELU) http://smallcapcenter.com/snapshot_chart.asp?ticker=ELU is an internet professional service firm providing strategic creative design, technology services, and training to companies seeking to utilize the internet for personnel, processes and systems in an electronic enterprise, allowing them to transact business, communicate information and share knowledge among employees, customers and suppliers. But where it is establishing a niche is in the network security and Voice Over Internet solutions.
2. Labrador Technologies, Inc. (V.LTX) http://www.labradortechnologies.com
Labrador Technologies develops software that helps oil and gas companies more easily retrieve and analyze business data. Formerly known as Sterne Stackhouse, the company was founded in 1981.
3. BrandPartners Group, Inc. (BPTR) provides merchandising, branch planning and design, creative services through its Willey Brothers, Inc. subsidiary, and market research data through its iMapData http://www.imapdata.com/ subsidiary.
Financial derivatives were more or less recognized by the International Monetary Fund (IMF) when it published the Balance of Payments Manual in 1993. They have been traded, however, through the Chicago Board of Trade (CBOT) since 1972 starting with futures in Foreign Exchange (British pound, Canadian dollar, German mark, Dutch guilder, Japanese yen, Mexican peso, and Swiss franc) followed by futures in interest rates in 1975 and later (GNMA mortgage-backed certificates, U.S. Treasury Bills, Treasury Bonds). Immediately after these two milestone developments by the IMF and CBOT the market in derivatives, especially since they have included the indices as well -e.g., S&P 500, has rather blown better than modestly!
This is no surprise because Hedge Funds, in addition to extremely affluent individuals and other institutional investors, also started using these instruments. Also visit Strategy for global hedge funds and alternative investment http://www.hedgefundsworld.com/tmpl/Reports.aspx?RID=286.
Our interest in these financial instruments was the result of our research into "Artificial Intelligence http://www.stottlerhenke.com/ai_general/glossary.htm (AI), neural networks and a variety of statistical analyses Software" which we announced in previous newsletters. It appears that these AI, neural systems are as advantageous in making decisions regarding Foreign Exchange as well as in Stock Investments.
Do yourself and your family a favor, have a nice, healthful dinner. Have a party. No, ... Have a Ball! See a movie. Enjoy.
Whatever it takes to take your mind off the stock market!
< font>The background Rachmaninoff's Symphonic Dances provides an additional incentive that in fact there is more life than meets the market. Think about it!
Better still, match your wits joyfully against others by partaking in
1. Jesus’ Excellence in literature competition (http://livinggracefully.com/Humanities/Excellence%20in%20literature%20competition%20050401.htm)
2. Win Prizes! Join Jesus' Write Along Competition.
Continue the Saga of John the Time Traveler ... (Pre 911)
(http://livinggracefully.com/Humanities/It's%20John!%20Time%20Traveler's%20Adventure.htm)
It has been a pleasure serving you,
Jess Ragaza http://www.livinggracefully.com/jess_curr_vita.html
Newark, NJ 07101
PS As an added incentive: get twenty five percent (25%) off your next subscription for every one that you refer and subscribe. Just fill this form's comments with the comma delimited character strings of e-mail addresses, e.g., "Jess Ragaza" <[log in to unmask]>, "JR" <[log in to unmask]>, ... Alternatively, get ten per cent (10%) credit, payable either by check or electronic funds transfer for your every referral that subscribe
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