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[QUOTE]Originally posted by ScottSA: [QB] jb, the biggest and bestest lesson you can learn is the one in my sig. That's why it scares me when you talk about buying hope...hope comes pretty expensively around these parts, and there are hopehawkers on every streetcorner. Learn to read charts...they're really pretty simple once you figure out what they mean. If you're gonna chase fast money, learn when to buy crap stocks and when to sell them. Forget about the "great ideas" and what a nice guy the CEO is and what he says is "right around the corner." That usually means your pocket is about to be picked. 1 Forget the 'idea' of the company. Great ideas are a dime a dozen. I remember a company named Wamex (WAMX), way back around 1999 - 2000, with a brilliant new idea for a trading floor that would cut out the MMs by direct trading. The stock went from around $16, where I bought in, to $26, while we all held on, knowing that the idea would make us rich. Then it fell to 15, then 10, then 5, and then the CEO put out a news release, and it went to 6, and then 3, and then hovered for a while around 2, until the big day came...its first television ad on MSN! The stock shot up to 10 and was well on its way through the roof to make us all rich, when the FBI and the SEC all coverged on Wamex HQ, which happened to be a little office in a dive, and carted off the executive officers in handcuffs. The stock dropped to .25, where I sold it, but for months afterwards a number of the so-called "longs" kept in communication of the one surviving EO, and were even going to pool money to bail out the company. That was a lesson learned, as this and others will eventually be for you. 2 Understand that 'volume' is not always, or even usually, an indicator that the stock is going to pop. In the subs it more likely means the o/s is increasing from one gazillion to 10 gazillion and the CEO is releasing PRs and shovelling dilution. 3 Understand that just because a stock is low, that doesn't mean the only way left to go is up. It's not. A subpenny that flattens out into a slow decline might P&D someday, but not by much...and if you get out of it with your skin and a bit of dignity, you're lucky. It might also flatline forever, or be shut down by the SEC, or be f/s or r/s, both of which are usually bad in a subpenny. In fact, the probability of a subpenny at .0001 doing something bad is far higher than the probability of it doing something good. When you hear these newbie blowhards talking about "risk analysis," it's because they don't have a clue what the risk really is. 4 Count the float. 5 Count the o/s 6 Read pinksheets. See who is selling what and when. See how much red is on the pink sheets page. Don't pay much attention to the news releases, unless a PR says the CEO is under arrest...that's usually a bad sign. If the CEO is not yet under arrest, but promising to buy IBM or Nortel next week, or promising a sure thing Russian oilfield, that's always a bad sign and you should not invest in the company at all costs. 7 If you get an email from a "hot stock pick" company, delete it and run away. 8 Look for a company with a small float, a small o/s, history of low dilution (that doesn't always mean it won't dilute, but it makes it less likely), and that's only a starting point. Then look to see what the accum/distribution is doing. Is it going up? What's the volume doing, and what's the price doing? What's the money flow doing? Keep your money in an interest account and don't buy the stock. Pick a few stocks like that and watch them every day, until you get a feel for what they are doing and what the indicators do in relation to the stock price. Wait till one of them pops, and study what the indicators are up to, and what happened just prior to the pop. If you're lucky enough to stumble on all those conditions, plus a falling stock price and a rising a/c, you can probably bet a little on a pop coming pretty soon, but you'd be smart to get someone's opinion first. Not mine, because I'm just a basher, after all... 9 Don't listen to newbie dweebs who claim to have a "spidey-sense." You'll find that it "tingles" often and never in relation to the actual stock price. Listen to the old hands...if they claim to have a spider sense, it's not some mystical thing; it's a developed feel for what the stock is going to do, and it's almost always based on the charts. Not me, of course, because I'm just a basher. [/QB][/QUOTE]
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