A Very Bad Year

2008 is finally over, and it's been a very bad year for my investments.  At the closing bell today, my portfolio looks like this:

And over the course of the year ...

Not much to celebrate on this New Year's Eve, but reason enough for drinks aplenty.

While I'm disappointed, I'm not entirely morose: there are good years and bad years, and this has been one of the worst in recent memory.  

Weekly Summary

It's just two weeks until the end of a very bad year, and here's where things stand:


In the next couple of weeks, I'll be selling off some of these dogs to take capital losses - not that I don't have losses aplenty in my main portfolio, but when deciding which stocks to keep and which to sell, most of these have little prospect for improvement.

Weekly Summary

Virtually nothing has changed ...



.... not much to say.

Weekly Summary

I've not updated my blog in the past couple of weeks - partly because I was traveling during the Thanksgiving holiday, partly because it's been a horrific bloodbath that I'd rather not watch:


Things are still stinking, and there's not much hope that will change. Within the next few weeks, I'll start dumping the biggest losers to take a tax write-off - and I expect others will do the same, driving the market further down than it already is.

Weekly Summary

Another week has passed, and things continue to slip deeper into the red:


There's still no sign of a turn-around, and not much point in getting in deeper - so for now, I'll continue to ride it out.

Weekly Summary

At the end of this week, I'm back to where I was a couple weeks ago:


I'm still hopeful that the market has reached its bottom - but since there's not much time left in the year, I doubt I'll be recovering. Looking ahead, I'll probably ride out the year without adding to my portfolio, but just ride it out instead and hope for a better one in 2009.

Back in the Dumper Again

I had hoped that yesterday's elections would have helped the markets turn around a bit, but they've taken a turn for the worse instead.

Toward the end of last week, things seemed to be picking up in anticipation of the Presidential elections. I figured that, no matter who came out on top, the market would show some signs of improvement - but instead, the market took a serious dive - all the major indexes were down today, and I expect the trend to continue through the week.

Fortunately, I maintained a healthy skepticism, and didn't follow through on my notion of dumping more money into the markets in anticipation of a major rally. And at this point, I'm not expecting that to occur.

Weekly Summary

In the past week, I've experienced some degree of recovery, but my portfolio is still far lower than it has been earlier this year:


Today's headlines read that it's been the worst month in 21 years, and I'm feeling it - but I also have some optimism that the markets will bounce back in the months ahead, so I expect that it may be time to move some of the cash I've been sheltering back into equities to take advantage of the recovery.

I'll consider that over the weekend, but unless I change my mind, expect to see some movement of funds, and a spending spree in the next couple of weeks.

Bottom Feeding

It's not news that the markets are in terrible shape - that has been evident for far too long. Neither is it news that they will eventually find a bottom - various pundits have been proclaiming it for some time, even as the market has continued to plummet. Eventually, that's bound to happen. What is new, if not news, is that I'm beginning to think that now may be the right time to get back into the game - move some of the funds I've been sheltering in treasury securities and CDs to equities. Here's why:

The market indices have all been fluctuating wildly - up one day, down the next - but have been in a consistently upward trend for the last three days in a row, with less brutal swings in value, and the major economic indicators, while far from rosy, don't justify the level to which the markets have already fallen.

Next week's elections, however they turn out, will provide some sense of a certain direction for the economic future of the nation. It's really doesn't matter which candidate comes out on top: what matters is that the decision will be made, one way or the other.

And so, unless a major bomb is dropped in the next few days, I expect we're on the road to recovery. Granted, many voices have said as much for quite some time, and I've not been entirely convinced.

I'm still not entirely convinced, but I'm beginning to have my doubts about my doubts, and that's as close to optimism as one can get in this market.

Weekly Summary

It's been another brutal week on the markets, and my portfolio is in tatters:


At this point, I'm not laying any plans, just riding the storm out and, like many, waiting for the markets to hit bottom and start staggering upward again.

Headed South ...

When Freddie Mac and Fannie Mae were taken into custody, I held out some hope that the government's goal was to shepherd them back to solvency ... but it turns out they're doing a better job of destroying the companies than the corporate executives that ran them into the ground to begin with.

The Federal Housing Finance Agency, which placed the two companies in conservatorship on Sept. 7, directed them last month to start increasing their purchases of loans and mortgage-backed securities as the Treasury seeks to absorb underperforming and illiquid assets from financial companies.

Federal regulators directed Fannie Mae and Freddie Mac to start purchasing $40 billion a month of underperforming mortgage bonds ... Each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential.

When patients, already sick, are being fed poison pills by the doctor they turn to for healing, there's virtually no hope of recovery. But then, considering what Bernake and Paulson are doing to the nation's economy at large, is there any safe harbor?

Weekly Summary

There's been some recovery in the markets this week, but not much, and my portfolio is still well in the red:


Just not much to say these days ... still in wait-and-see mode.

Another Reverse Split?

Rite-Aid has been put on notice: its stock has been trading below the $1 borderline on the NYSE for the past month now, and must drag itself back over the line in six months or face delisting.

Faced with the same problem, Revlon made the same move just over a month ago - and their shares have recovered slightly since - but I commented at the time that it was the first time I'd seen that happen.

Given that Rite-Aid is still struggling to recover from its acquisitions, and the entire market is struggling to regain ground, I think it's unlikely they'll pull out of their nosedive in the near future, and a reverse-split will eventually occur.

I may be wrong about that ... or they may be able to effect a similar recovery after the reverse-split takes effect ... but I'm doubtful on both counts.

Weekly Summary

This past week was murderous to my portfolio - though given the performance of the entire market, I don't think I'm alone in this predicament:


Given the way things are going in the overall market, I'm going to have to deviate from my general strategy of dumping a position when it falls below 50% of its original value. Otherwise, I'd be dumping about half of my portfolio: DEXI, FEEC, RAD, IVAN, and FRE.

The wise guys are saying that this is the time to buy, as you'll make a killing when the market recovers. While that sounds like good advice, they've been saying the same thing for the past month, and anyone who's done so is sorely regretting it.

I'm going to wait for a full week of positive movement before I get any deeper into the markets, and I'll hold onto what I've got in hopes of recovering some of what I have already lost.

Weekly Summary

It's the end of a turbulent week in the markets, and my portfolio has taken a $500 dive:


Nothing has done particularly badly: Krispy Kreme and Freddie Mac have dropped about $100 apiece, and the rest of the loss is forty dollars here, sixty there, twenty there - every single stock is down from where it was last week.

In brighter news, much of the turbulence has been over the federal bailout bill, which has finally been passed and signed. Like many investors, I have mixed feelings about it - whether it was the "right" or "wrong" thing to do from an ethical perspective, and whether it will make any difference at all to the markets, what with other economic indicators sagging ... but what's done is done, and we'll just have to wait and see.

Quarterly Report

It's the end of third quarter, and here's how things have gone so far this year ...


I could feel pretty bad about that, but here's a comparison between my portfolio and the S&P 500's performance this year ....




All things considered, I think I've done quite all right.

MIVA Dropped

This morning, I dumped my position in MIVA, which I bought into in February in hopes that they could either turn around the companies they'd consolidated or sell them off to bigger players, but neither has happened thus far and there's no sign that it ever will.

The result, a net loss of 52.4% ...



They've been flirting with disaster for a few months now, and have bounced below and back above my usual stop-loss of 50% for penny stocks - I finally decided to get off the dime, before the share-price fell to a dime - and divert the cash to better bets.

Weekly Summary

It's been a week of ups and downs on the market, and the net result has been largely a break-even from the week before:


Most of the Wall Street's mood-swings deal with uncertainty over the government's plan to bail out the financial sector, and the only stock directly affected is Freddy Mac, which has recovered nicely from its initial tumble.

It may be that buying in wasn't such a bad idea after all, and that it's taking some time for things to be set right ... though there's still a chance I'm dead wrong, and it will fall back to nothing. To some degree, that's true of each of my positions.

Weekly Summary

At ten end of a rollercoaster week on the markets, my portfolio has regained some ground:


Primarily, my gains come from Blockbuster Video, which rose nearly 40%, and Revlon, which gained 8% as investors regain confidence in these struggling firms. I'd hoped (and expected) that they would rebound sooner than they have - but I suppose it's better late than never.

Reverse split boosts Revlon shares

Rvlon (REV) shares underwent a 10-for-1 reverse-split today, as they had announced some time ago. And then, something very strange happened: the shares gained value.

It's been my experience that a stock that consolidates shares in fear of being delisted (or in hopes of upgrading" to a better exchange) generally experiences a massive decrease in market capitalization on the very first day - and while I will always be skeptical, having been burned several times before, I'm very pleasantly surprised.

I've considered moving the shares to my big-board portfolio, as the company is no longer a "penny stock," but have decided against that: even though REV is not a penny stock now, it was when I bought it, so I'll keep the shares where they are until I decide to sell them.

Weekly Summary

Things have changed quite a bit since last week, and one risky play has wiped out my profits for the entire year:


The question I ask myself when a deal goes south like this is: would I do it again? And the answer: probably so. I knew when I got into it that it was a hard-way bet and I was bucking the market ... and if things had worked out differently, I'd have cashed out nicely. As it stands, I have a ghost of a chance that it may recover later this year, and another tax write-off if it doesn't. Way it goes, sometimes.

On the bright side, if I played it safe and bought into an index fund, I'd probably be in the same shape, almost to the penny: the DOW, the S&P 500, and the NASDAQ composite are all down about 15% for the year - so what's the difference?

Freddie Mac - Whacked

Yesterday, the Treasury Department announced a takeover of mortgage giants Fannie Mae and Freddie Mac. While the bailout eased market tensions, it's bad news for shareholders: the stock price of both companies took a nosedive.

I knew when I got into this that I was betting against the house, and last week's recovery of the stock price was an encouraging sign - but the surprise announcement this weekend completely erased that, and I've gone from a 66% profit to a 72% loss in a single trading day.

That's just the way it goes, sometimes.

For now, I'll hold my shares rather than dumping them, on the hope that the market's reaction was an over-reaction and the stock price will recover - though it's equally likely (and some would say even more likely) that the firm will sink from a conservatorsip to full-blown nationalization in the coming months.

Weekly Summary

It's been a four-day week in the markets, and while the last couple of days have been brutal on the big boards, there's not been much change in my holdings:


Second quarter reports are trickling in, and I don't see anything particularly alarming, though the upcoming reverse-split of Revlon has me slightly edgy, I don't foresee needing to make any changes in my portfolio in the near term ... but then, one never knows.

Revlon plans equity rights offering

Revlon is continuing to show signs of improvement: today the company announced plans to pay down $170 million in their debt using cash raised selling off its Bozzano business in Brazil ($63M) and an equity rights offering to current common shareholders ($107M).

Following the announcement, the stock took a 6% dive (from $1.34 to $1.26), presumably fueled by panic from investors who don't understand the meaning of "equity rights offering" and assumed it would dilute the value of their shares.

If the dive had been steeper, I'd have snapped up a load of cheap shares to make a profit on the rebound, when cooler heads prevail. As it stands, I'll earmark some cash for when the rights offering goes through.

Unfortunately, the company also restated, in the same announcement, that it still plans to move forward with a 10-for-1 reverse split of its stock later this month to solidify its position (translation: to keep from being delisted), which suggests that management is nervous about its ability to effect a turn-around, at least in the short run.

Weekly Summary

In spite of today's losses, it's been a great week for my penny stock portfolio:


The gamble I took on Freddie Mac seems to be paying off nicely - while the firm is still on shaky ground, the doom-and-gloom predictions have been considered and rejected by the market and the price has made a substantial recovery throughout the week. Meanwhile, my other positions have made moderate progress, and even the most flea bitten of my dogs are showing signs of recovery.

GDP Surpasses Expetations

The market in general jumped today on the latest news from the Department of Commerce:

Gross domestic product rose at an annual rate of 3.3 percent ... beyond the government's initial estimate of 1.9 percent as well as economists' forecast of 2.7 percent .... [this growth] marked the economy's best performance since the third quarter of last year, when GDP rose at a 4.8 percent pace.

Economists who have been sermonizing doom and gloom about the state of the economy were quick to dismiss these results as a fluke or a "head fake," suggesting that the economy was still sluggish and would continue to be so for quite some time.

"This is just sort of data that trickles out that can be very positive one day and negative the next," one was quoted as saying. "We don't yet think it signals a trend." - but given the (false) claims of recession we've been hearing all year, one wonders exactly what data, if anything, the weathermen of our economy have been considering - if any at all.

Weekly Summary

In general, it's been a good week for me - transfer of additional funds into my portfolio to take a risk on Freddie Mac has diluted my return ratio, but it's still looking pretty good.



My sickest dog (MIVA) has pulled back from the edge of a stop-loss sell order, and a handful of them are doing well - especially Krispy Kreme. I'm at a loss to explain that, in the absense of any market news - but I don't feel the need to worry about a ray of sun in an otherwise stormy market.

Federal Home Loan Mortgage Corporation (FRE)

Company:	Federal Home Loan Mortgage Corporation
Web Site:	http://www.freddiemac.com
Purchase Price:	$3.05
Current Price:	Click Here

I've moved about $1,000 into my Penny stock account to take a gamble on Federal Home Loan Mortgage Corporation, affectionately known as "Freddie Mac" - in hopes that it's a daring move that will pay off nicely ...

The mortgage giant is beleaguered by write-offs, and industry pundits seem to expect that the company will soon need a federal bailout that will devastate, perhaps completely eradicate, shareholder equity, and the price has plummeted from a 52-week high of $65.88 to a mere $3.05 a share ... making it a "penny stock" by the "less than $5 per share" definition.

The doomsayer's predictions are possible - and many would say that they are likely - but there remains a good chance that the company will pull out of its crisis, or that a government-engineered plan to save it (and keep the mortgage markets fluid) may not be as damaging to the current investors.

Though the disclaimer at the top of my blog discourages readers from following my (risky) investments in this portfolio, it's worth repeating for this one specifically: this is a big risk, and I strongly discourage anyone from tailgating me on this gamble.

Weekly Summary

It's been an up-and-down week ... and in the end, my bottom line hasn't changed much:


In my main portfolio, stocks are recovering as the price of oil falls back to a sane level, and if that trend continues, I may move over additional funds to the penny-stock portfolio and take a few positions in some of my watchlist companies that are beginning to show some promise.

Weekly Summary

While there's been some turbulence in the larger markets, things have been going well in my penny stock portfolio - with only three positions in the red (and only one of those by more than ten percent), things are looking great:


There are a few other companies that look promising right now, but I'm short of funds in this portfolio. I've been debating whether to cash out some of my profits to expand my holdings, or perhaps moving over additional funds from my main investment portfolio ... but more likely, I'll sit back and let things go a while longer before making any greater commitment to the market.

GOGB Dropped

I've finally dropped GoIP Global (GOGB, previously GOIG) from my portfolio - since the value was worth less than the commission to sell the shares, it wasn't worth hanging onto, and I doubt any charity would have accepted the shares. And so, I called my broekr and asked them to drop it from my portfolio.

Since I sold half of the shares earlier and doubled my money, the total loss on the remaining half means a break-even, less commissions, on the investment. Considering how hard it was to dump the shares, I consider myself lucky to have gotten out without having lost significantly more.

Blockbuster Adds DVD Vending Kiosks

Blockbuster Video has entered into a partnership agreement with NCR to deploy DVD rental kiosks:

The DVD-rental only kiosks will start to appear in the third quarter, with full deployment by the end of 2008...down the line, these kiosks will add DVD buy and downloads as well, the companies said. "Looking beyond this initial deployment, our mutual goal is to have 10,000 kiosks installed within 18 months," said Bill Nuti, NCR CEO

These video kiosks will be similar to the Redbox kiosks. According to the same press release, Redbox (a joint venture of Macdonalds and Coinstar) has deployed 9600 such kiosks thus far and has been very profitable.

Since Redbox locations are limited (to Macdonalds restaurants), the company does not have significant coverage, and should not pose much of a threat to Blockbuster's own rollout.

Weekly Summary

My portfolio's been looking better in recent weeks - between the ups and the downs, I'm back on top by an appreciable margin:


Of all my positions, I've got two that are serious losers: GOIG has fallen to a small fraction of its former value. Rather than waiting for it to fall off the books, I'm going to donate my shares to charity and write off the purchase price as a deduction - and MIVA has been teetering on the brink, and has finally fallen beyond the point of no return: unless it takes a leap upward after the bell on Monday morning, I'm going to cut my losses on that one as well.

AVI Biopharma

Company:	AVI Biopharma
Web Site:	http://www.antivirals.com
Purchase Price:	$1.16
Current Price:	Click Here

AVI Biopharma has been on my watch list for several months, since their acquisition of Ercole Biotech earlier this year. The company has been increasing its revenues, but like so many other small fish that try to absorb another small fish, the expenses it took on in the acquisition have weighed down its balance sheet with debt.

In recent months, the company has been refocusing its portfolio of projects with an eye toward routing resources to the most promising research and have brought aboard industry heavyweight J. David Boyle as their CFO. I have the sense that this transfusion could bring life back to the company, whose stock has been on a slow and steady decline thus far.

Ivanhoe Energy (IVAN)

Company:	Ivanhoe Energy, Inc.
Web Site:	http://www.ivanhoe-energy.com
Purchase Price:	$2.31
Current Price:	Click Here

I've had my eye on Ivanhoe Energy for a couple of months now - ever since the company acquired three leases in the Athabasca oil sands region in Alberta. While I've been watching several companies through the spring, I've been reluctant to get back into the oil business since taking a loss on Pilgrim ... but there's just too much potential in this player, and the major players are beginning to take notice - so I figure now is the time to strike.

Weekly Summary

After taking a tumble last week, my portfolio has recovered nicely, and the value the highest it's been all year:



There are a couple of sick dogs in the pound, which is to be expected, and some of them just won't get up and run - but those that have taken off have largely carried the rest.

Run Away!

A week after buying into eTrade on news that they were liquidating an underperforming unit to address their solvency issues, I've dumped my shares on news that the company reported a significant loss, and issued a press release stating that "the current economic environment may impede our expectations to return to profitability from continuing operations this year."

I got out early, and preserved some of the gains I had made before the feeding frenzy began:


A 46.2% gain is probably nothing to be too upset about - but it is a 9% drop from yesterday's closing price, and I expect it will slide deeper as the day wears on.

This is the second time I've played eTrade this year. I bought in at $2.99 in January, then sold out at $4.21 in March when the company seemed resolved to let its subprime portfolio drag it down the tubes.

I tend to doubt I'll go back for a third helping ... but then, you never know.

Weekly Summary

This week, I'm back in the black by an appreciable margin, largely due to my recent investment in eTrade and the continued progress of Krispy Kreme:



While the beleaguered big-board stocks have been making sufficient gains, my "true" penny stocks are continuing to flounder, with Miva dancing at the edge of my tolerance for bad performance - but in the end, my losses and gains have largely balanced one another out, and I've yet to stumble across a multi-bagger this year.

Revlon Swings to Profit

Revlon has announced a small profit for second quarter 2008, defying analysts predictions for a loss, and reports that sales are continuing to grow:

According to preliminary estimates, profit in the three months ended June 30 totaled $20 million, or 4 cents per share, compared with a loss of $11.3 million, or a loss of 2 cents per share in the same period last year. Net sales in second quarter rose by 8 percent to $375 million compared with $349.2 million last year.

The stock has gained some ground as a result - or more aptly, it has regained some ground that it has lost so far this year. I'm still in the red on this one, but if they can continue to grow, slow and steady, my sense is that buying into REV is a move I won't regret.

Insider Investment at Rite Aid

A week after trimming back its outlook for the current fiscal year, Rite Aid insiders are loading up on cheap shares:

[CEO] Mary Sammons and fellow board members Robert Miller and George Golleher purchased 1.48 million shares in open-market transactions this week. The price: $1 a share. Sammons bought 486,750 shares, while Miller and Golleher bought 500,000 shares a piece.

This is a significant vote of confidence by people who are "in the know" about this company's long-term potential. While I think it's going to take longer than I had hoped to turn a profit on this investment, I still expect I'll end up well in the black.

E-Trade (Again)

Company:	E*Trade Financial Corporation
Web Site:	http://www.etrade.com
Purchase Price:	$2.46
Current Price:	Click Here

E*Trade is one of the pioneers of online securities trading, who took a significant loss (five billion) in the subprime lending crisis, which sent its stock price plummeting from over $25/share to almost $2/share over the course of several months.

I played this stock earlier this year, and made a pretty good profit on it before it started to sink again and I cashed in my chips. Today, the company announced the sale of its Canadian subsidiary for almost half a billion dollars, which should go a long way to improving their debt ratio, and I expect that the shares will start moving up again, so I'm buying back in.

As before, I'll keep a close eye on things, but I expect to make another win.

Weekly Summary

The market in general has been in chaos this week, and my own holdings are down. On the bright side, I'm still in the black ... by about a buck:


I'm still trying to dump my shares in GoIP Global, but there simply isn't sufficient value to unload them at any price - my sense is it won't be long before the stock price won't cover the commission to unload them, and I'll end up taking a total loss.

Rite Aid cuts fiscal 2009 outlook

Sometimes, my timing really sucks ...

Drugstore operator Rite Aid Corp. on Wednesday reduced its guidance for fiscal 2009 because of refinancing costs. The Camp Hill, Pa.-based company said it now expects net loss between 39 cents and 52 cents per share, compared with previous guidance for a loss of 34 cents to 48 cents per share.

While I still expect that the firm will eventually dig its way out of debt, its shares are sure to plummet in the short run, and since the price is getting close to the $1 mark, they may either have to reverse-split (which is never a good thing) or face the prospect of being delisted (ditto).

So long, SOYO

SOYO Electronics has dropped to the point of no return, so I've cashed out to salvage what value is left:


I held out hope that this former microchip manufacturer could segue into the consumer electronics industry, but they've not been very successful - by all accounts, their products have been good, but they don't know how to define their niche, establish a market for themselves, or compete against more established firms ... and they don't seem to be learning from their mistakes.

And so, it's time for me to bail. I'll keep an eye on the press releases to see if they bring in some talent to help them make the transition - but for now, I'm no longer willing to fund their clumsy efforts.

Weekly Summary

Another week has gone by, and the ups and downs in my holdings have once again balanced out:


SOYO has puts its toes across the point of no return (a 50% loss) and I will be looking to unload it and cut my losses unless there's some significant development in the next few days; GOIG has been there for a while, but it's so thinly traded that it's impossible to unload my shares at any price.

On the brighter side of things, I'm beginning to consider when to take profit from KKD, which has shot upward but seems to have reached a new plateau, and FEEC, which I already cashed out my original investment, and whose star also seems to be fading in recent weeks.

Video Rental Follies

It's ben a busy week in the video rental industry ...

Last week, I bought into Blockbuster video, after the press got wind of Netflix's unilateral decision to dump "profiles," one of the few features that gave the firm competitive advantage in the industry and Movie Show Video, its main brick-and-mortar competitor, announced a desperate restructuring plan to stave off its creditors.

While Movie Show is still speeding downhill, Netflix came to its senses earlier this week and announced that it would keep the "profiles" feature (and retain the customers who were threatening to jump ship) - and since Blockbuster failed to act on this opportunity, the window for them to regain some ground in the online market has closed ... at least until the next time Netflix takes aim at its own foot.

However, there's still some potential for profit, asn Blockbuster announced today that it has reconsidered its plan to buy electronics retailer Circuit City Stores, which many analysts saw as a marriage of two struggling firms that would produce little fruit, and the stock snapped back upward by five percent (Meanwhile, CC shares plummeted to a seven-year low).

I expect the stock will continue to recover as the news spreads, and I will probably cash out sooner than expected, with a smaller gain than I had hoped, unless they can build on this momentum by announcing alternative plans.

Quartely Report

Here's how things have gone so far this year:


All in all, it's been a slow year for penny stocks: I've invested in 15 companies and seem to be waiting longer for them to pay off - and the majority of my holdings have fleas. I've been trading in penny stocks for over a decade now, and this has been the slowest year ever.

But then, that's not entirely a bad thing - my picks aren't taking off quickly, but they're not taking a fast dive, either - and a 6.6% gain may seem small, but considering that the S&P has lost 13.8% during that time period, it's really not that bad.

Weekly Summary

I've made a few acquisitions this week, moving some of the funds that were laying fallow in my account into companies that I hope will be more productive - but other than that, the overall value of hasn't changed dramatically from last week. Given the turbulence in the market, breaking even feels like a small victory


About half of my holdings are now big-board stocks that have gone south: Revlon, Rite Aid, Blockbuster, and Krispy Kreme. This is unusual, as my typical tactic for a penny stock portfolio is to invest in smaller firms whose growth will come from scaling up their operations rather than larger firms who are seeking to solve balance-sheet issues - but then, I'll take profit however I can get it.

Rite Aid (RAD)

Company:	Rite Aid Corporation
Web Site:	http://www.riteaid.com
Purchase Price:	$1.45
Current Price:	Click Here

Rite Aid Corporation, the nation's second-largest chain of retail drugstores, has been struggling under the weight of recent acquisitions, and today announced a first-quarter loss of over $150 million, sending its price on a downward spiral.

While the company is experiencing a severe case of indigestion, my sense is they can survive: they have been in business since 1927, currently operate over 5,000 stores, and have revenue growth of nearly 50% year-to-year - and while the loss seems significant, it's nothing that an $11 billion dollar corporation can't handle.

The company is already in the process of streamlining its operations to eliminate redundancies and market cannibalization, and I fully expect that they will show signs of recovery by the end of this year, and should be back in the black before long - and while the stock will probably take a while to recover completely, I expect to turn a fair profit within the next six months.

Blockbuster, Inc (BBI)

Company:	Blockbuster, Inc.
Web Site:	http://www. blockbuster.com
Purchase Price:	$2.55
Current Price:	Click Here

Over the past five years, Blockbuster's stock has fallen, in spite of the fact that the company has continued to prosper. There are two major competitors that were expected to steal their business - but recent events seem to indicate that they may be pulling ahead in the race.

First, Netflix was supposed to make the entire brick-and-mortar video store obsolete - analysts seemed to expect that the vast majority of customers are enthusiastic about technology and will stop shopping in meatspace as soon as a Web site came along to sell the same product, which is the kind of thinking that led to the dot-com crash several years ago.

Netflix has taken a significant number of customers away from them, but has become complacent and imperious, taking away valued services and ignoring the (literally) hundreds of customers who are complaining and threatening to take their business elsewhere. From their tone, it's unlikely they'll come to the realization that customer service is the key to success, and if they continue along this path, they'll follow in the path of PetSmart and PeaPod to become a footnote in industry history as a warning to others.

The other factor that was supposed to lead to Blockbuster's demise was the consolidation of rival chains: Movie Show Video, a sizable competitor from the opposite side of the tracks, bought out Hollywood Video in an attempt to steal away a significant share of the brick-and-mortar market by spanning more market segments and saturating the market. Unfortunately, it was a bigger pill than they could swallow, and MOVI soon declared bankruptcy.

And while Netflix is screwing their customers, Movie Show is screwing their stockholders, canceling their common shares and planning a reissue to placate their creditors and reward their employees for so efficiently running the company into the ground. After all, it worked for Delta Airlines, right?

And while the competitors who were expected to overwhelm Blockbuster have been busy doing "big" things that turned out to be big mistakes, Blockbuster itself has been quietly keeping its doors open and serving its customers ... and in the long run, that's what really matters.

Weekly Summary

It's been another up-and-down week, and with the exception of Krisy Kreme (which spiked on their earnings report), there's not been a lot of motion in either direction:


I had meant to open a few more positions this week, as about a third of my portfolio is sitting fallow in cash, but none of the stocks on my watch list seem to be sparkling, and nothing new has come to my attention of late.

KKD - on the rise

Since posting a $4 million profit, shares of Krispy Kreme has been headed north for the past three days - from an opening price of $4.40 on Monday to a close of $5.20 today, and it seems to be gaining steam.

Some pundits are cautious, and cite the past quarter's success as a fluke rather than a sign of recovery - but then, I bought in because I felt it was grossly undervalued: the stock was trading at more than $10 a share just one year ago and had fallen to that level from nearly $45 before the financial woes of rampant growth gutted shareholder confidence.

The firm is still going strong, and the local franchises don't seem to have suffered much - so I still have a great deal of faith that the corporation can straighten out its balance sheets and pull through.

Weekly Summary

Having sold off two of my positions this week, my penny portfolio is down to eight stocks:


Overall performance is looking good, but since I haven't identified any new investments (been to busy adjusting my main portfolio) about a third of my penny stock portfolio is currently in cash. I'll do some research over the weekend to identify at least two companies that show potential and get a little more of that money working for me.

Petel - Dump

Petel Incorporate has finally worn out my patience. I made a tidy profit earlier this year and sold about half my shares to lock it in ... and a good thing too, as the price has been headed south ever since. Here's what I've made on the remainder:


While I took a loss on those shares, I made a profit overall - earning $993.75 ($825 in January, $168.75 today) on a $540 investment. I do wish the company would have done better, but maybe that's just greed.

This only underscores the importance of taking profit when you can, rather than holding out in hopes that a company will continue to grow. The latter may be a good idea for blue-chip investments, but this is the pink sheets, and the rules are totally different.

FEEC Cashout

Shares of Far East Energy have risen sharply over the past two weeks, and it's gotten to the point where I can cash out and make a tidy profit, and so I did:


I still hold 500 shares in the company, so I can reap even more profit if it continues to grow at this rate - but I'll lock in some profits in case it takes a turn for the worse.

Weekly Summary

In spite of the turmoil on the big boards, my portfolio has edged back into the black this week:


This week's biggest gainers were KKD and FEEC - but I can't see a reason for that: neither has updated their financial statements or announced anything particularly positive, and the trading volume has not been unusual for either.

Hip Hop Flop

After seeing the videos taken at the "grand opening" of H3 Enterprise's second restaurant in Miami, I've decided to bail. While their flagship operation in Tampa looked well-planned and well-executed, the Miami franchise is a tiny place in a run-down strip mall - an embarrassment to a brand that's not established enough to be forgiven for such a mistake.

And so, like most of their customers, I'm getting out and probably won't be back:



Since the company was approaching my loss limit of 50%, it was probably only a matter of time before I bailed out anyway ... and I expect that, given time, I won't have any regrets for getting out early.

Weekly Summary

There has been virtually no change in the value of my portfolio in the past week:


Some of my positions have gone up, others down, and I think the net difference is less than two dollars.

Revlon to meet NYSE price criteria via reverse stock split

Just after the bell on Friday, Revlon announced that ...

[the corporation] plans to regain compliance with the New York Stock Exchange's criteria of $1 a share average closing price over 30 consecutive trading days through its pending reverse stock split. ... the company's board had approved a 1-for-10 reverse split of Revlon's Class A and Class B common stock. Revlon has 6 months from the April 2008 notification to the exchange to bring its share price and 30 trading day average share price to $1.00 or above.

This is unfortunate news, and wholly unexpected in light of recent announcements that company insiders have been loading up on shares, expanding product lines are bringing increased revenue, and there is an ongoing campaign to revitalize the brand.

Especially with the penny stocks, actions speak louder than words - and while press releases may brag about the company's hopes, the start reality is that the executives, the board, and the shareholders do not have much faith that the company can pull out of its slump in the next six months, and that a reverse-split is the only measure that will save them from being delisted.

However, they haven't acted yet: the split was approved, but no date has been announced. When that happens, it's time to cut and run: it's extremely rare that a company reverse-splits only once: they RS, the price falls, they RS again, the price falls, they RS again ... it's a death roll.

Weekly Summary

This week has been up and down, and the net result is not much of a change, overall:


In particular, Petel, Inc. has pretty much established itself as a loser - I keep saying that I'll hang onto the "free" shares I have, but they keep sliding downward, and it might make sense to unload them before their value is less than the commission to get rid of them, and Far East Energy has been doing well overall, though it ended the week with more of a whimper than a bang.

Otherwise, my positions are all either doing "good but not great" to "bad but not rotten."

Miami HipHopSodaShop Grand Opening on May 22

H3 Enterprises will be opening its second "Hip Hop Soda Shop" in Miami this weekend, and has announced that ...

The Miami HipHopSodaShop launch is a celebration of the evolution, flava, and cultural genius of Miami hip-hop. The grand opening will pay tribute to the artistic talent of Miami hip-hop artists Rick Ross, Trina, Trick Daddy, Grind Mode, Flo-Rida, Luther Campbell, Ball Greasy, Gorilla Tech, Brisko, Bizzle, DJ Chipman, DJ Khaled, DJ Entyce, and DJ Ali.

For what it's worth, I have no earthly idea who any of those people are ... but I hope that their target market has.

Weekly Summary

The gains on the big boards have, to some extent, been echoed on the pink sheets this week, with microcaps gaining some of the ground they have lost in recent weeks:


In all, things seem to be going fairly well, though I'm beginning to get the sense that, in this market at least, I may have been better off sticking the money in a muni bond mutual fund and waiting out some of the volatility.

SOYO Inc. Reports First Quarter 2008 Financial Results

In a press release today, SOYO announced significant growth in their net revenues:

The Company reported first quarter net revenues of $24,795,315 for the three months ending March 31, 2008, an increase of 68.8% compared to $14,691,110 in the first quarter fiscal year 2007. Gross margin for the first quarter 2008 was 3,106,104, as compared to 2,608,196 for the first quarter fiscal year 2007. Income from operations for the three months ending March 31, 2008 was 809,567 as compared to 414,437 for the same period in 2007.

Since the company has doubled its revenues and profits, it would stand to reason that he demand for its stock, and the price buyers will be willing to pay, should follow. I don't expect it will quite double, but I'm hopeful there will be a significant bump, possibly enough to get this one out of the red.

Revlon chairman Perelman buys 500,000 shares

A follow-up to a previous post ... Revlon Chairman Ronald Perelman acquired another 500,000 shares of company stock. Combined with the 600,000 shares he purchased last month, this adds up to over million shares.

With micro-cap stocks that trade in the sub-penny range, that's really nothing remarkable - you can suck up a million shares with a small amount of cash - but since revlon is trading around $1 a share, this represents a significant investment.

While I don't have enough funds in this portfolio to justify pumping more cash into this company, I'm giving serious consideration to adding a significant position in Revlon to my main portfolio.

PTEL: All too quiet

Petel, Inc., recently announced ... well ... nothing at all for the past couple of months, which is unusual for a company that has a history of pumping out press releases every fortnight or so to remind stockholders that it's still trying to gain a foothold in the industry.

The company has been uncharacteristically silent while its stock price continues to plunge, and it's fallen below the threshold at which I usually bail out - but since I've already taken profits on this one, its downward spiral isn't costing me any real money.

If corporate insiders were loading up on shares, I'd suspect that there was something big in the works that they wanted to keep out of the public eye - but since there's no evidence of that, and I've no reason to suspect they're doing so covertly, my sense is that this isn't the calm before the storm, but merely the awkward silence of the righteously embarrassed.

Weekly Summary

This week, I've dipped closer to break-even. I'm still ahead of the S&P 500, which is down about 5% for the year, but that's cold comfort given the amount of research that goes into selecting stocks.


I have enough cash at this point to open a position on another company, but the stocks on my watch list aren't showing much promise - had I bought into them, I'd have more to regret than to celebrate - so I'll hang onto my liquid assets until I find something I have a stronger sense about.

BLSH - Cut and Run

Blue Star Health has been dancing on the edge of a 50% loss, the point at which I've learned (the hard way) to cut and run, and so I liquidated my position:


Given the current "crisis" with grain crops, legislators are beginning to question whether it makes sense to subsidize biofuels, and the concept is losing its glamor in the consumer market as well. Since it is estimate that it will take five years to ramp up grain production, it's unlikely this will bounce back in the short run.

I might look into this company again if the situation improves, if it survives - but for now, I see nothing but a downward trend.

H3 Announces Grand Opening in Miami

H3 Enterprises announced today that ...

The Grand Opening of the HipHopSodaShop in Miami, Florida is scheduled to begin on May 21, 2008 and will last until July 21, 2008.

On one hand, it's great that the store will be opening in time for Memorial Day weekend, as I expect that this will boost its performance out of the gate and help them to build a client base at the beginning of the summer holidays.

On the other hand, I do wonder why an "Opening" is going to last for a two-month period. No details were provided on this matter, and it could be that they will open an unfinished restaurant, with a promise of additional features to be added over the next few months. That could do them more harm than good.

Weekly Summary

My portfolio has recovered slightly this week, bouncing back from the general slump that's started my second quarter with a fizzle:

Two of my holdings are dancing on the edge of the abyss - I generally dump a stock that loses more than 50% of its value, as I have never owned one that has come back afterward - and some of the others are doing moderately well.