Reshuffling the deck - The dangers of marrying a stock

Opportunities come up every day on the stock markets.  Right now I bet there is a 1 cent stock poised to go to a dime, a 10 cent stock primed to hit a buck and a $1 stock that will be trading for more than $10 before too long.

Of course unless you have a bottomless bag of money at your disposal, then you're going to have to sell some stocks to take advantage of opportunities that arise, and hopefully you'll be taking profits. That's something I've been doing of late with a number of the stocks that I've written about here at Avoid The Bag.  

As disclosed yesterday (Oct 24, 2016) I closed out my position in Lithium Americas (LAC.TO) for a nice capital gain.  I also decided to reduce my position in Eguana (EGT.V) by half, realizing a 100% profit on the shares I sold, having bought them at 15 cents.  Xenith Bankshares (XBKS) is another I reduced by about one third, having a cost basis of $1.60 means a return in excess of 40% on the shares I sold.  With all those capital gains I also booked a capital loss on LED Medical (LMD.V), a penny stock I thought was a good prospect to get some attention, but it didn't pan out, at least not yet.

In my younger days selling would have been harder, but I've learned some valuable lessons over the years, both from my late great Father, as well as from a most invaluable teacher called Experience.

Too often I find investors fall head over heels in love with their stocks, and all too often just one. Putting all your eggs, as well as all your money, in just one basket is not only incredibly risky, its also incredibly stupid in my opinion, but people do it all the time.  Why?  Because they've fallen in love. Its something that's happened to me before, and something I try to avoid now.  

I still like EGT and XBKS which is why I didn't sell out entirely.  I'm still holding some LMD.V as well in hopes it will start to attract the attention of investors.  The only stock I sold off completely is LAC, although I still think they have a chance to make a go of their Lithium Mine with SQM's backing.  

So what are the opportunities I saw?  One is in another stock that trades in what I'll call the "New Energy" space.  Ideal Power Inc. trades on the Nasdaq with the symbol IPWR. Beside recent developments and potential for stocks in the Energy Storage market, I love the way the chart looks.

I'll be doing a specific blog post on Ideal Power in the days to come.

Good luck to all three of my loyal blog dawgs, and I hope you're making money....not just on paper though, but with real capital gains that come from turning shares into money.

Cheers.

LED Medical Diagnostics - When promotion fails.....

I am as prone to the sin of vanity as anyone else.  This blog is not yet even 3 months old and already I've put out some ideas that have played out very well.  

I've expressed bullish opinions on Lithium Americas (LAC.TO) at 75 cents and its now at $1.08. Eguana Tech (EGT.V) was another bullish opinion at 15 cents and its over 30 cents currently.  And on the bearish side I've expressed negative views on ZIOP, KTOV and ABRW with all three being down.  

Some of my bullish opinions haven't borne fruit of course, at least not yet.  I did a post on Resverlogix about their phase III clinical trial for their lead compound RVX-208.  That was when the stock was trading in and around $1.30 and it has pulled back to a close of $1.18 today.  And HMPR which I consider to be a low risk play from a buy/hold/prosper perspective, it was written about here at $1.81 and it just closed at $1.76.

Not bad, not perfect of course....but overall pretty good.  EGT has more than doubled, LAC is up around 60% from my predicted low and my bearish calls with KTOV, ZIOP and ABRW are all down with KTOV absolutely cratering from up around $6 to less than $3 currently.

My bullish opinions on RVX and HMPR haven't played out yet, and perhaps they never will but at least with HMPR I am still very bullish.  With RVX I think success or failure hinges on their phase III trial which has a long way to go yet, a very high risk/reward play in my view.

If I was asked to self grade this blog right now I'd give it a B, maybe a B+.  

But it pays to keep yourself humble because success in the markets can be fleeting.  Before starting Avoid The Bag I was writing an InstaBlog on Seeking Alpha.  It was there that I did my first post about LED Medical (LED.V in Canada LEDIF OTC in the US) back on March 29th 2015.  

Beer Budgets And Champagne Tastes - Why Retail Investors Will Avoid LEDIF

In point of fact I'd bought into LMD.V sometime in the summer of 2013, liking the potential for the company to attract the attention of investors with their Velscope device used for detecting oral cancer. The Velscope had been featured on both "Dr. Oz" and "The Doctors" prior to LED Medical being a public company.  

LMD or LEDIF had what I considered to be great potential.  The market cap was small, there were only about 60 million shares outstanding in August of 2013, and trading was thin.....If their story caught fire I figured LMD.V could go from the 30-40 cents it was trading at then to maybe as high as $5 CDN.  

Things did get interesting, Nick Hodge of 'The Outsider Club' fame started touting the company in his email blasts.  I had seen how SBOT traded after this outfit was touting that stock in 2014  with it climbing around 1,000% and figured LMD.V could possibly have a similar run.  A Seeking Alpha Pro Blogger named Dallas Salazar started touting them, Zacks put out a bullish analyst report....I could taste big gains thinking the herd was going to start moving in any day.

Then in October 2013 the company brought on David Gane as CEO.  In checking his history I found that he had a complaint brought against him by the SEC for an alleged promotional scheme from his time with Dicom Imaging Systems, another Dental company.  The SEC claimed Dr. Gane had given out inflated guidance figures in tandem with paid promoters hyping Dicom's stock.  He was exonerated however based on the fact that the guidance figures were forward looking and hence protected by safe harbor provisions.

Was LED (LEDIF OTCBB) going to start soaring?  Would a tsunami of promotion and hype send the PPS up 500% or more?  As you can see from the chart LMD.V never went on a sustained run:

It did pop a little, going up over 50 cents.  But volumes never topped more than a couple million and I figured more was coming....it never did, the herd never showed up.  I had a chance to make a small gain, but I got greedy thinking I could make more.

Despite Outsider Club email blasts, bullish write ups by Pro Seeking Alpha blogger Dallas Salazar, professional IR and bullish analysis by Zacks....nothing worked.  Perhaps Gane's reputation from his days with Dicom squelched serious buying from excited retailers?  

That's life with speculative stocks in money losing companies.  A few will turn things around and become profitable, with their stocks delivering long term shareholder value.  Many more, in my opinion, will see their stock prices rise sharply and then fall, as investors get excited about a story.

Or, as in LMD Medical's case, some will just drift lower and lower.  Sometimes you have to take your lumps, swallow a loss and move on.  And when you do well, remember your failures to keep yourself humble.