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Despite a major rally in the foreign markets this morning, U.S. investors are waking up around the country with their collective finger on the sell button hoping to move their assets quickly to cash. Read the rest of this entry »

Despite a major rally in the foreign markets this morning, U.S. investors are waking up around the country with their collective finger on the sell button hoping to move their assets quickly to cash.

However, most of the research that I’ve come across lately indicates that heading for ‘greener’ pastures is not historically as profitable a decision as holding tight and weathering the storm.

According to a recent New York Times article that takes a look at a 2005 study conducted by the University of Michigan, “From 1963 to 2004, the index of American stocks tested gained 10.84 percent annually in a geometric average, which avoided overstating the true performance. For people who missed the 90 biggest-gaining days in that period, however, the annual return fell to just 3.2 percent. Less than 1 percent of the trading days accounted for 96 percent of the market gains.”

Timing is Everything

Timing is everything folks, and most investors like ourselves never seem to end up getting back in before the market bounces back. Unless the world disintegrates over the next 5-10 years, a market rebound is inevitable. Since there indeed is not much upside potential in cash today other than short-term safety, if you have the money, I suggest looking hard for value in today’s bargain basement environment.

Here are a few potential candidates

Outside of the small cap arena, I’ve fallen in love with CreditCorp (NYSE: BAP) over the past few months only to watch share price erode nearly 50% from its 52-week high. Peru’s biggest bank should benefit greatly from the country’s booming economy which is expected to grow by 9.2% this year despite the ongoing global meltdown. Shares now trade at around $40 vs. $73 on September 10th.

Also, some very sexy Asian and South American ETFs including the iShares FTSE/ Xinhau China 25 Index Fund ( (NYSEArca: FXI) and the iShares MSCI Brazil ETF(AMEX: EWZ) have been battered over the past few weeks as well. Although both nations have been severely impacted by the slowdown in the U.S., both stocks are now down 50% to 60% since January 1st. If the global markets rebound majorly, these could be two of the first stocks to rally.

On the other side of the fence there is Quantum Fuel Systems (Nasdaq:QTWW). The stock ran from under $.40 to over $3.20 earlier this year and has given back most of its gains despite commenting publicly on a number of very positive developments in its solar energy business over the past month or so.

Net-Net

With Wall St. bouncing back this morning in early trading after a global market rally and a number of solid companies now trading at major discounts, we suggest thinking twice before moving too heavily into cash.

Note: 

Microstockprofit.com and its affiliates hold no position in any of the companies mentioned in this edition.

Despite a major rally in the foreign markets this morning, U.S. investors are waking up around the country with their collective finger on the sell button hoping to move their assets quickly to cash.

However, most of the research that I’ve come across lately indicates that heading for ‘greener’ pastures is not historically as profitable a decision as holding tight and weathering the storm.

According to a recent New York Times article that takes a look at a 2005 study conducted by the University of Michigan, “From 1963 to 2004, the index of American stocks tested gained 10.84 percent annually in a geometric average, which avoided overstating the true performance. For people who missed the 90 biggest-gaining days in that period, however, the annual return fell to just 3.2 percent. Less than 1 percent of the trading days accounted for 96 percent of the market gains.”

Timing is Everything

Timing is everything folks, and most investors like ourselves never seem to end up getting back in before the market bounces back. Unless the world disintegrates over the next 5-10 years, a market rebound is inevitable. Since there indeed is not much upside potential in cash today other than short-term safety, if you have the money, I suggest looking hard for value in today’s bargain basement environment.

Here are a few potential candidates

Outside of the small cap arena, I’ve fallen in love with CreditCorp (NYSE: BAP) over the past few months only to watch share price erode nearly 50% from its 52-week high. Peru’s biggest bank should benefit greatly from the country’s booming economy which is expected to grow by 9.2% this year despite the ongoing global meltdown. Shares now trade at around $40 vs. $73 on September 10th.

Also, some very sexy Asian and South American ETFs including the iShares FTSE/ Xinhau China 25 Index Fund ( (NYSEArca: FXI) and the iShares MSCI Brazil ETF(AMEX: EWZ) have been battered over the past few weeks as well. Although both nations have been severely impacted by the slowdown in the U.S., both stocks are now down 50% to 60% since January 1st. If the global markets rebound majorly, these could be two of the first stocks to rally.

On the other side of the fence there is Quantum Fuel Systems (Nasdaq:QTWW). The stock ran from under $.40 to over $3.20 earlier this year and has given back most of its gains despite commenting publicly on a number of very positive developments in its solar energy business over the past month or so.

Net-Net

With Wall St. bouncing back this morning in early trading after a global market rally and a number of solid companies now trading at major discounts, we suggest thinking twice before moving too heavily into cash.

Note: 

Microstockprofit.com and its affiliates hold no position in any of the companies mentioned in this edition.

Quantum Fuel Systems Technologies Worldwide Inc. (QTWW) gained nearly 17% Monday by the time after-hours trading concluded on more than 4 million shares traded.

Although QTWW remains a concept company in my mind with roughly $3M in revenues and a bottom line of ($47m) as of its last quarterly filing, the company is surely building a very diverse portfolio of alternative energy investments.

Daily volume increased more than 400% Monday over last Friday and QTWW likely attracted some attention from investors fed up with failing oil and gas stocks. We saw a recent high of $1.72 on Monday and the stock could test $2.00 on Tuesday if it can bounce back towards $1.70 after giving back nearly half of its gains in after hours trading.

OTCBB: Total Dollar Volume by Year (2000 - 2007)

Here’s a comparative look at the total dollar value of all securities traded on t

he OTC Bulletin Board over the past 7 yrs - courtesy of the OTCBB itself - (chart to right).

As the chart indicates, dollar value dipped below $44 billion for the first time in ‘07 since ‘03. This is no bombshell since the economy has been shaky at best as of late.

The OTCBB also provides a graphic depiction of the monthly dollar value of securities traded on the exchange from 8/07 to 8/08 (chart below to left), which is also quite interesting in my opinion.

OTCBB: Total Dollar Volume by Month

 (August 2007 - August 2008)

As depicted by the chart to the right, total dollar volume has been dropping considerably over the past year with August figures representing a nearly 60% decrease. In addition, total share volume is down almost 20%. So, things have certainly been better for the exchange in past months.

While the overall Bulletin Board exchange may have seen better days, there are still a great number of compelling plays in this arena and a great deal of money to be made in playing BB Stocks.

Here’s a few examples of some recent small cap success stories that should have you watching the exchange despite it being down overall from many angles:

Quest Minerals & Mining Corp. (OTCBB: QMNM) recent advanced more than 4,000% in just 3 trading sessions, running from $.0016 to $.075 from 6/18 to 6/23. Roughly every $1,000 invested at the recent low yielded profits of approximately $43,000. Not bad for three days of pointing and clicking.

City Loan Inc. (OTCBB: CYLN) advanced near 3,2000% Tuesday on 30K shares traded and followed up that performance today gaining 50% or $.05 on modest volume of 2.679. CYLN is now showing potential to reach higher highs as its financial situation improves and the company pushes forward with aggressive expansion plans. As I’ve mentioned previously CYLN operates in the somber, but prosperous auto title loan industry and could transform itself into a national market leader if growth objectives are met over the next 12-24 months.

Quantum Technologies (OTCBB: QTWW) ran from $.50 on 1/30 to more than $3.00 in July for +500% gains on sheer future potential despite a horrendous bottom line, for now at least. 

Biophan Technologies, Inc. (OTCBB: BIPH) - a medical device company focussed on treatment of acute heart failure - gained 212% or nearly $.02 Wednesday on news it recently eliminated $2.3M in dilutive financing .

Location Based Technologies (OTCBB: LBAS) - a provider of personal location solutions - has seen its stock price surge from the $1.50 range back in July of ‘07 to a recent high of $10.61 this past summer for gains exceeding 600%.