Stop Shorting Penny Stocks Randomly, This Isn’t CNBC, I Want You To Profit!
I’m seeing a lot of comments/emails from people re-shorting these pump and dumps waaaay late in the game, just because they missed profiting from the initial dump. Here’s a tip—STOP!
Yes, these companies are all crap (okay, okay 99.9%, but this is the last time I’ll ever qualify that), but you gotta understand crap companies can and do rise faster than quality companies for several reasons:
a.) there’s no pesky actual businesses to get in the way of hyping / putting out fraudulent / exaggerated press releases so investors must only be convinced of the dream, not the execution of the dream, which is helpful considering the harsh reality / inevitable failure of these companies
b.) no pesky morals or ethics instilled in those who manage such companies / promote such stocks
c.) the ever-replenishing supply of suckers willing to put their money into far-fetched dreams and their unwillingness to be skeptical or cynical until they lose their $ and vow never to repeat the same mistakes…not that it matters cuz there’s always new suckers who don’t know any better!
d.) most importantly, you, the naïve short sellers—who mistakenly believe that just because a company is crap / fraudulent, it’s gonna go to 0—because you guys are the ones who take longer-term short positions and get squeezed when the scumbag company/promoters pump these suckas up!
My blog is not some BS entertainment outlet like CNBC (remember the GTE pump, yeah, it still hasn’t broken out and actually coulda woulda shoulda been a good short for 15%!)—here I profit based on probability so I don’t make impossible-to-have-any-edge-whatsoever predictions. I take it one high percentage play at a time, trades that have excellent risk-reward ratios and when I’m wrong, I focus on cutting my losses quickly.
When you randomly short dogsh#@ stocks like (KOG), (EDEN), (PSTI), (ORGN), (CNOA), (PWSV), (OCTL), (TIGR) you risk getting caught in/causing big short squeezes—sure, there’s still some downside on these stocks—and if you have excess capital to spare for a few months, they might be worth it—but for you guys out there with TIM-sized accounts and under, the risk-reward ain’t pretty! For us, the only time to short is into that initial dump because as I’ve posted again and again, the variables are perfectly aligned, the odds are in our favor…trust me, I’ve been profiting handsomely and refining PennyStocking for nearly a decade now, I’ve considered all the angles. Don’t believe me—good!
Trust charts over humans, former pump and dump IDMI:
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| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| July 23 | MKTY | $4.73 | $5.40 | $187 |
| July 22 | MKTY | $4.10 | $4.28 | $240 |
| July 21 | ZYXI | $3.03 | $3.18 | $130 |
| July 15 | MNLU | $6.37 | $6.73 | $340 |
| July 11 | IDAE | $2.27 | $2.49 | $630 |
| July 8 | ERII | $11.29 | $11.00 | $162 |
| July 3 | TGC | $2.14 | $2.39 | $471 |
| July 2 | HYGS | $2.15 | $2.29 | $260 |
| July 2 | TGC | $3.44 | $3.49 | $80 |
Total: $22,457 (
81%)
1Michael Goode
April 23rd, 2008 at 2:31 pm
For once I’ll agree with you, Tim. My account size is now larger than peanuts, which gives me the leeway to take positions in stocks that might take months (or even years!) to go down, like YTBLA and MXFD. I’m not the kind of guy who gets squeezed. I just sit around and wait until the good days come, all the time having enough cash or margin available to act if I do find something else to trade in the meantime. It is the people who do not have gobs of patience and money who will get caught up in a short squeeze and close their position then.
2timsykes
April 23rd, 2008 at 2:47 pm
exactly
3A
April 23rd, 2008 at 2:49 pm
Tim,
You mention over and over again that PennyStocking will not get you in the tens of millions of dollars. What are you going to do once your account size gets too big for your PennyStocking strategy?
4Goat
April 23rd, 2008 at 2:50 pm
SSRX will run into close…load up for the gap up tomorrow!!
5timsykes
April 23rd, 2008 at 2:52 pm
i’m gonna retire, by then I’ll have back my $2 million and millions more in book/dvd sales/speaking fees in teaching you guys how to play the game!
6A
April 23rd, 2008 at 2:53 pm
Thanks Tim. Guess u have no aspirations of getting in Buffet, Tudor Jones, and Soros’s league.
7Tony Ellis
April 23rd, 2008 at 3:01 pm
JRJC a good example of what happens when you randomly short?
8timsykes
April 23rd, 2008 at 3:02 pm
nope i used to, but now i realize my strategy isn’t scalable so i’ll just take form what i can, but without any expectations
9Goat
April 23rd, 2008 at 3:03 pm
Do you like SSRX tim?
10Davey
April 23rd, 2008 at 3:08 pm
Tim,
You say you’re gonna make back your 2 mil or so and retire because you’re in publishing mainly, but you would agree that someone could make more than 2 million with your strategy by aiming for a few hundred thousand every year. You just can’t make several million in one year. By the way are you looking to expand your publishing company into magazines more books etc. in the future?
11Joe
April 23rd, 2008 at 3:13 pm
Don’t short yourself Tim……find a new strategy when this one no longer works.
12Mark
April 23rd, 2008 at 3:26 pm
Shorted 1200 shares of EDEN earlier at $2.30 earlier. Check out the 3 month charts for STEN and GRIN and see what happened after their similar spikes. It’s lookin a lot like PSTI too. I’m staying short for now. I’ll givin it another day or two.
13timsykes
April 23rd, 2008 at 3:33 pm
ssrx isn’t up enough
u shouldnt aim to make x amount with this strategy, its not a liquid market like all other niches, so u really just have to judge it one play at a time…no idea how long its gonna taken me to get to 1.65mil again, probly between 5-10 years
mark-yes, the chart looks good, but i dont like how well it held up, its tiny marketcap nor the fact that they’re even kinda associated with agri
14Goat
April 23rd, 2008 at 3:36 pm
I mean go long SSRX, not short
15timsykes
April 23rd, 2008 at 3:43 pm
ha i’d never go long anything with a chart like that
16timsykes
April 23rd, 2008 at 3:52 pm
shorted 700 PDO at $6.22 into this nice gradual negative close, goal is to take out stop losses at $6, cover $5.75ish
17Mark
April 23rd, 2008 at 4:16 pm
This southern goy ain’t gonna argue with you about EDEN. Hopefully, it’ll do the usual and drop back to the mean, but we’ll see. Thanks for responding. I value your input. That’s for sure.
18Brewster
April 23rd, 2008 at 4:18 pm
Tim, do you have to call it in everytime you go short?
19timsykes
April 23rd, 2008 at 4:23 pm
hello no, i just pull up my handy chat window
20Happycamper
April 23rd, 2008 at 5:03 pm
Tim,
What made you think PDO is the one going down besides the gradual down at closing you mentioned above? Just want to learn your strategy on PDO.
21timsykes
April 23rd, 2008 at 5:13 pm
i’ll have a detailed post tomorrow morning
22Tony Ellis
April 23rd, 2008 at 5:19 pm
ASIA–earnings look good and a share repurchase, I thought these companies only issued new shares.
23Zykosis
April 23rd, 2008 at 5:30 pm
what are you looking for on dgly, i noticed it on your watch list. if it breaks 9?
24Dan-O
April 23rd, 2008 at 5:34 pm
Chat window? Sweet jeebus
25Happycamper
April 23rd, 2008 at 5:59 pm
Just filled 500 shares PDO short at $6.30 after hours. Don’t know who is buying but it was filled! Lets see what happens tomorrow.
26timsykes
April 23rd, 2008 at 6:01 pm
nice, i also saw 1,000 sold off at $6…looking good
27manhack
April 23rd, 2008 at 6:04 pm
I had borrowed 1000 shares of PDO this morning from TOS. Almost sold it at 6.50. Crapped myself when it plunged to 6.00 in seconds. Never had the guts to jump back on long or short.
28nodin
April 23rd, 2008 at 7:28 pm
craaap….f*&$ing day trader pattern alert…..didn’t allow me to short it……hopefully tomorrow still on time..
29Jay Zalowitz
April 23rd, 2008 at 10:37 pm
Hey guys check out
http://www.thefinanceprofessor.com
you can join and create your own club
its social networking for investors.
30Jack
April 24th, 2008 at 2:05 am
What do you think about V? I have all my eggs in ETFC but I am thinking about selling all of it and going all in for V before earnings and holding for a while or going 50/50… what do you think
31timsykes
April 24th, 2008 at 7:53 am
jack i think ETFC is random, i think V is random, i’m over here with a freaken broken slot machine that pays out far too often and you’re wondering what number to bet on at the roulette wheel!
32Tony Ellis
April 24th, 2008 at 8:46 am
ASIA 13.50 PM. Only 6K shares, need to see more volume.
33Jibri
April 24th, 2008 at 6:58 pm
Tim, ok I’ve done my homework. I had the concept that the market was buy low sell high. I kept reading about something called ’short selling’. To the blogger, thanks for the tip about investopedia.com
Wow, you’ll are betting against the stock, against the trend. I see the edge now. Thats risky business, but hey isn’t life. You mean that every time a business’s stock falls someone just made money. You should have your 2 mil back in no time. Now that I think about 2 mil is not alot of money.
Man, just think I use to work 2 jobs and not make half of what I made today. I need more info, I’m all over this site and more. Thanks guys.
34Jibri
April 24th, 2008 at 7:14 pm
Visa is holding steady.