Dog stocks, shares that bark

[drmb]

I sold out of my position today at a small loss, PDN causes me more stress than anything else!

PDN went up close to 15% over the next week

I am human, & I got sick & tired of seeing PDN just sit there in the red on my portfolio, like a dog : The lack of dividends are a bit of a downer as well.Well, I certainly do believe it has future long term potential, and that may be sooner than later - I just need to get out of the negative mindset first, before I re-enter!

I feel the pain too sometimes of having carefully researched a company, decided it's a winner, found the readies and put a bundle down only to see the company languish seemingly forever, it's only existence seemingly to provide directors' fees and provide employment opportunities, forgetting the shareholders too would like a return on their investment

Here are three tragics that I have owned or still own with my own opinion, please do your own research:

INL - base metals producer

A company seemingly with potential caught between being a base metals producer and a tech stock but now paying the penalty of nobody in the market understanding it or caring. Not helped when directors convert oppies to shares and immediately sell off again. Now seems doomed to remain unloved as has burned too many on its tragic way down. I still hold, why? I think as long as I hold I won't see the loss, it's all still a paper loss, maybe I'll take when it's tax time. Oh, misery


VCR - Left ventricular assist device

A single product company seemingly caught in a death spiral of facing hefty competition from 4th gen LVADs that are smaller and possibly cheaper, an industry leader that seems to dominate the US market, and an addiction to almost annual fund raising at discount to the sp to "sophisticated investors", latest 80c when sp was 88c, now sp down to low 60s. Seems to have a possibly annual income of 25-30 mil but a cash burn of 2, 3 or 4 mil per month, making it unlikely winner imo. I still hold, why? I think as long as I hold I won't see the loss, it's ....etc. Oh, misery

MOS - small Aussie oiler

I thought it had potential but seems to exist to pump gas, employ people, have nice stable income, some exploration prospects, but it seems no other prospects. Lots of take over rumours fuelled (sorry) the price hikes but the company due diligence must have been too good, never became a bride. Sold to take a loss last FY, to offset some capital gains

Of course the moment I sell, they’ll all streak away, a la TZL

 

[brilliantmichael]

I feel for you drmb, and it's perfectly natural for you to feel that way. We are all after all only human. Now I know that a stock chat forum is just a stock chat forum, but thanks anyway for sharing your experience. I don't know what situation you're personally in but rest assured, it is a natural fact of life that people try, and many fail. It is encouraging to see that you haven't the slightest trace of hubris. You learn your lesson (or cope with more than your fair share of bad luck) and you move on. That's how we grow, no matter what stage of the journey we're in.

Just consider that instead of the pokies or the lottery (which we all know is a losers game), you bet on something with a lot more promise. But we all gotta remember: Stock investing to the small investor is still ultimately, for outsiders like us, just a bet. The difference is we bet with better odds.

How are our odds improved? By reading, by learning, by educating ourselves, by learning from our mistakes. By developing our own theoretical frameworks, by willing to put in the hard yards and research, and of course by learning from the great teachers of investing who have a track record and a reputation to prove their worth.

After learning, it is also important for us to remember our own limitations. I for one strain and ponder constantly about my own limitations, and do admit to engaging in a bit of hubris myself. While this can provide a thrill and rush as we move to click the "submit order" button, we gotta remember what is waiting for us on the other side.

My rule of thumb is: If a stock purchase is going to keep me awake at night, or I believe it will keep me awake at night, then I avoid the so called "opportunity" and count my blessings. Only buy a stock you could sleep like a baby on, even if it went down to $0.001. As somebody with a day job I have other priorities too, and have learned myself recently that the stock market can be as all consuming as a day at the race track or the RSL pokies. Remember most of us do not have the occupation title: "Trader". Why then take on his burdens? Know your limits. If I find it irresistable to make a far-fetched bet, then I keep the risk extremely low: Bet no more than 5-10% of your float. Don't be greedy. Be rational. Be pragmatic. That's all you can learn.

This post might not make you feel any better, but I once again thank you for reminding us of the all too familiar feeling of being on the other end of Fortune's scales.

Good luck and Godspeed.

PS: If you're technical trading (though I'm not a technical player myself), I read somewhere that the rule of thumb is to 'follow the trend'. This also means you cut your losses early and move on. If you aggregate your net losses and gains, a technical trader supposedly has fewer gains than losses, but sticks with the gains when they're substantive. 'Keep your eye on the exit.' is a quote that springs to mind. Hope this helps.

 

[mayk]

Nice post brilliantmichael

Good advice.

 

[drmb]

My rule of thumb is: If a stock purchase is going to keep me awake at night, or I believe it will keep me awake at night, then I avoid the so called "opportunity" and count my blessings. Only buy a stock you could sleep like a baby on, even if it went down to $0.001.

This post might not make you feel any better, but I once again thank you for reminding us of the all too familiar feeling of being on the other end of Fortune's scales.

Good luck and Godspeed.

PS: If you're technical trading (though I'm not a technical player myself), I read somewhere that the rule of thumb is to 'follow the trend'. This also means you cut your losses early and move on. If you aggregate your net losses and gains, a technical trader supposedly has fewer gains than losses, but sticks with the gains when they're substantive. 'Keep your eye on the exit.' is a quote that springs to mind. Hope this helps.

Thanks for great response - yes, I agree with you regarding speccies and once I decide to "invest" (read - speculate/bet) then I only use money I don't mind losing, with a philosphy that if the sp goes to zero next day, I will not miss it. INL is about 1.5% and VR <1% of my total holdings, which mainly comprise eg CBA, ARG, AFI, ALR, WOW, DUI, ZFX, etc. Altogether I am not complaining, I am up this year >24%, better than bank interest.

Just curious to hear from others if there are any "misery" stocks they have?

 

[steven1234]

drmb

Is there any speccie you hold that you are considering selling? From the sounds of it the drmb indicator may be a short bet, ie the moment you sell the price rises...

Alot of people who have taken losses recently fail to clarify that much of that loss is only a portion of their accumalated prior gains. Overall most, despite the correction are still ahead. Hope I'm not speaking too soon! This is so as its the speccies that have sufered the most during the correction, but it was the speccies that have run the most in the short term past.

 

[tech/a]

The trick of course is to recognise the dog which is about to bark and to recognise when its biting.

There are a few that I'm looking at for those tell tale signs now.
LAF QTK NEU.

The general concensus and one that I agree with is that its dangerous to pick or at least to attemp to pick bottoms.

But as you'll notice all bull runs start from a bottom.

Anyone pick any signs in these?

 

[It's Snake Pliskin]

The trick of course is to recognise the dog which is about to bark and to recognise when its biting.

There are a few that I'm looking at for those tell tale signs now.
LAF QTK NEU.

The general concensus and one that I agree with is that its dangerous to pick or at least to attemp to pick bottoms.

But as you'll notice all bull runs start from a bottom.

Anyone pick any signs in these?

LAF and NEU are worth watching. But I am not saying anything about buying!

 

[hangseng]

The trick of course is to recognise the dog which is about to bark and to recognise when its biting.

There are a few that I'm looking at for those tell tale signs now.
LAF QTK NEU.

The general concensus and one that I agree with is that its dangerous to pick or at least to attemp to pick bottoms.

But as you'll notice all bull runs start from a bottom.

Anyone pick any signs in these?

I have had LAF on my watch list since it fell to ~7c

It is just now showing some signs of resurrection, although caution needed without confirmation technically. If the news comes out positive that may just be the catalyst it finally needs.

Huge financial hurdle to overcome but I have a feeling LAF has the long term backing to get through this. Keep in mind most small holders would have panicked and left the building long ago. Who bought all of those cheap shares? Not buying just yet but very close now.

 

[Dukey]

Re: Dog stocks that prevent sleep.

For me LAF is and example of one that disrupted my sleep pattern for a while.

I was in - got burnt - got out. Happy to have cut and run on this one - lesson learned: 'know thyself'. (preferably before putting your cash down). Sleep better now!!

In the end it came down to this - although they seem to have suport in high places - when the population (incl religious leaders) is against you - you are always gonna be pushing sh%t uphill. + typhoons. I also came to think more about the sensitivity of a 'small tropical, reef fringed island' environment. .. I decided that some places should be off limits being that there's plenty of gold in less sensitive environs (ie here in Aus deserts). Do we really need to take those risks with sensitive areas at this stage - just because we can... for a buck?

Anyway - that was just my experience with a dog share. Could well be on the verge of a comeback.... Now I know to check my conscience more carefully before buying.

(personal opinion/experience only)

 

[dalek]

Thanks for great response - yes, I agree with you regarding speccies and once I decide to "invest" (read - speculate/bet) then I only use money I don't mind losing, with a philosphy that if the sp goes to zero next day, I will not miss it. INL is about 1.5% and VR <1% of my total holdings, which mainly comprise eg CBA, ARG, AFI, ALR, WOW, DUI, ZFX, etc. Altogether I am not complaining, I am up this year >24%, better than bank interest.

Just curious to hear from others if there are any "misery" stocks they have?

I have found that after many years of buying / selling there comes a point where strategy necessarily changes. This occurs when the amount invested in the market reaches critical mass (an amount you personally regard as a lot of money)
At that point the primary objective absolutely becomes "don't lose money" with the obvious secondary objective of "make money"
My dogs and past errors of judgement probably amount to $50k but are now no longer relevant other than for the lessons they provided.
Today I share your view that nothing gets my cash that will cause anything more than minor (and reversible) discomfort and certainly no loss of sleep.
e.g. CBA WES WOW NAB ZFX etc. and I find trading this type of stock riding the $1-$2 fluctuations in reasonable size parcels easily provides a profit that keeps me in the manner I am accustomed. But I am a Mazda kind of guy I do confess. (How can anyone use the words car and investment in the same sentence ?!?!)
In any event, for amusement and hopefully some profit I do allocate around 2% for speccies such as GDR UNW etc.
So in summary I'm pretty much with you.

 

[tech/a]

(1) Dont let a position in a stock turn into a dog.
(2) Learn how to read "The tape" of a stock so you are in a better position to take advantage of those opportunities when they are presented.
(3) Understand that not all "Penny" stocks are tradable.Dont even try.
(4) Keep your universe of Penny's restricted to those with clear interest from punters.

The lure of the pennies is logical.
Its here where we see common moves of over 50-100% in a few weeks.
They are a challenge within themselves one which I've been working on for the last 3 yrs.
It is certainly a case of cutting losses quickly and letting profits run but more so.

(1) Identifying low risk high R/R trades.
(2) Identifying High probability turning points.Deciphering noise from termination of trends.
(3) Due to the speed these move I doubt that you can trade these as well using EOD as you can with smaller timeframes,5,15,30 and 60 min.

Often turning on its head "Conventional" technical analysis and as such where people find them almost impossible to trade with consistent profit.