E*Trade Financial Announces Super Bowl Advertisments

E*Trade Financial Corporation today announced the Company will debut two thirty-second advertisements during Super Bowl XLII, a strategic investment that will gain the Company broad exposure to a captivated audience of financial services consumers. ... "With the boost in visibility from our Super Bowl advertisements ... we will demonstrate that we remain completely committed to our core retail business and to our customers," said Nicholas Utton, Chief Marketing Officer.

Frankly, I'm appalled.

It used to be that blowing a significant amount of money on a Super Bowl ad was a sign of an up-and-coming company, and may young Internet firms launched themselves by betting on a single roll of the dice. E*Trade, however, is no young company - and instead of seeming bold, this move just seems desperate.

Said another way, the ship is sinking, and they've just spent a lot of time and money writing a new jingle. They really ought to be focusing their efforts on improving their capital structure (especially, escaping the burden of subprime loans that are weighing them down).

The fact that they're resorting to distraction tactics in a desperate attempt to remind us that they're still in business is a very bad sign. The fact that the don't realize that their investors will see right through this is even worse.

Roller Coaster

I got an e-mail alert today that Petel, which I sold yesterday at 11 cents, rocketed up to 20 cents today, which annoyed me greatly at first. By close of business, it was back down to 8 cents, some 20% lower than its closing price (12 cents) yesterday.

All things considered, I'm glad I acted when I did to lock in profits, even though I could have made more than I did: there's a lot of volatility in the penny stocks, and you can't really predict when a stock has topped out. When you're lucky enough to turn a profit, take the money and run.

PTEI Pays Out

Petel Incorporated has taken off, more than tripling in value since I bought it a few weeks ago. And so, I've sold off half my shares to lock in profits, and am holding the remainder in hopes that the upward trend will continue.


The profits from the sale more than covered the buy-in for the full amount, so I'm riding free shares at this point. And yeah, it feels great.

Weekly Summary

Things were going miserably earlier this week, but the market recovered nicely, making up for my losses for the past month:


In all, it's good to be ahead of the game for a change, if only by a little bit.

ETrade (ETFC)

Company:	E*Trade Financial Corporation
Web Site:	http://www.etrade.com
Purchase Price:	$2.99
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've been watching the company since its price plummeted in November and have been hesitant to invest, but its recent signs of recovery (most notably, the restructuring of its capital reserves by reducing its holdings in mortgage-backed securities) have been encouraging.

And so, I've bought a couple hundred shares, and expect to make a satisfactory return within the next six to twelve months.

Weekly Summary

It's been a brutal week in the market, and I've had some double-digit losses but am still down by a small percentage, overall. Here's how it turned out.


I've got funds to invest, and have my eye on a handful of companies that look promising - but am waiting for the market to even out before getting any more skin in the game.

Weekly Summary

Two weeks into the year, here's where things stand:

I'm still running at a net loss, largely due to intraday fluctuations in stock prices, but remain optimistic overall.

Blue Star Health (BLSH)

Company:	Blue Star Health
Web Site:	http://www.zeonfuel.com
Purchase Price:	$0.075
Current Price:	Click Here

Blue Star Health has recently acquired Zeon Fuel, a small but growing biodiesel firm that is expanding its operations. Unlike other micro-cap stocks in the biodiesel industry, they are more than just a shell: they have wholesale and retail facilities.

Currently, the company is seeking to upgrade to the OTC bulletin board. Since insiders hold the majority of stock, it seems likely that they will avoid the usual tactics (dilution to raise funds, reverse-split to reduce shares, then more dilution) that wreck shareholder value in order to increase the stock price, and will instead pursue the proper course (i.e., grow and strengthen the company) to reach that goal.

This will probably be a short to mid-range play – my plan is to get in ahead of the pack, then dump he stock back on the market when the buzz about the “new” company has reached its peak. It’s a fairly risky move, as an uplisting doesn’t necessarily guarantee that there will be any excitement about the firm, but I expect that if my short-term strategy doesn’t pan out, the company will eventually regain ground to minimize my losses.

Krispy Kreme Elects New Chief Executive Officer

In a press release dated January 7, Krispy Kreme announced:

[The Company's] Board of Directors has elected the Company's Chairman of the Board, James H. Morgan, to the additional positions of President and Chief Executive Officer. ...

Morgan brings over 25 years of management experience to the Company, including his most recent role as Chairman and Chief Investment Officer of Covenant Capital, LLC, an investment management firm which he founded. Previously, Mr. Morgan served as Chairman and Chief Executive Officer of Interstate/Johnson Lane, an investment banking and brokerage firm, which was acquired by Wachovia Corporation in 1999. After the acquisition, Mr. Morgan served as Chairman and Chief Executive Officer of Wachovia Securities, Inc.

Normally, I'm less than thrilled when an accountant is given the CEO's chair - it is an indication that the company is no longer growing its markets, but is instead focusing on its capital structure. At best, that means cutting costs to make operations more efficient, which improves the bottom line, but does not result in any real growth in sales.

For a penny stock, especially one that doesn't have sufficient income to cover expenses, that can be the kiss of death, but in this instance, it's a very wise move. Krispy Kreme has had phenomenal growth over the past few years, and their top line is impressive. However, their weakness is inefficiency - so at this moment in time, getting an accountant to clean up the books and streamline operations is critical, and growth in sales could be detrimental.

In the short run, cleaning up the books and streamlining operations can ensure that more of the top-line revenues end up as bottom-line profits ... and once they've got that straightened out, they can rotate in a new chief who's focused on real growth.

Petel Incorporated (PTEI)

This summary is not available. Please click here to view the post.

Pilgrim Petroleum to Acquire Additional Acreage in Palo Duro Basin

This week, Pilgrim Petroleum announced ...

[The company] has signed a Letter of Intent to acquire a 70% working interest in 8000 acres on Wilbarger County in Texas. This property has a history of great production and significant reserves. …

The Palo Duro Basin prospect, which is currently being evaluated for further development, has been compared to the Barnett Shale discovery. Barnett Shale is estimated to contain some 30 trillion cubic feet of natural gas. Management believes Palo Duro could prove to be one of the largest natural gas deposits in North America.

Given that the company is prone to making wild claims about its potential for profit, I’m skeptical about that last paragraph. However, the acquisition of new land is a promising sing. Given that the company sold off most of its acreage in exchange for stock (in an unknown firm), Pilgrim was beginning to seem more like a mutual fund than an oil company.

The company still has a steady stream of income from the properties it retained, sufficient to cover operating expenses and keep the company in the black while it continues to go wildcatting on uncharted lands, so I’m not overly concerned about them putting all their eggs in one basked. I hope and expect that the Palo Duro property is one of several acquisitions in the coming year.

Weekly Summary

I plan on posting weekly summaries, but being as this week has only been three days long, there’s really not much progress to report All the same, here goes:


It’s been three days, and I’m down $50.00 ($89.80, including commissions).

I’m not particularly upset about that, as it’s the nature of the game. Also, I’ve dumped another $2500 into the account to provide funds for additional investments.

H3 Enterprises (HTRE)

Company:	H3 Enterprises
Web Site:	http://www.h3inc.com
Purchase Price:	$0.11
Current Price:	Click Here

H3 Enterprises has created a new franchise, called the "Hip Hop Soda Shop," a theme restaurant for teens. They have opened their first restaurant recently (proving there's more than just talk to this one) and have plans to open others in major cities across the country.

Their concept strikes me as being like "Chuck E. Cheese" for a slightly older crowd, which strikes me as a great idea. I can't think of another corporation that's looking to give teens and young adults a place to hang out ... or maybe others have tried and failed. If they can make it work, it could be a gold mine.

I expect this one will take off when word gets out, and will dump my shares when it hits 50 cents. On the other hand, if there are signs of trouble and it looks like it won't expand, I'll cut my losses.

Pilgrim Petroleum (PGPM)

Company:	Pilgrim Petroleum Corporation
Web Site:	http:// www.apetroleum.com
Purchase Price:	$0.0025
Current Price:	Click Here

Pilgrim Petroleum is an oil exploration company in Texas. They seem to be involved primarily in shale squeezing, a process that extracts remnant oil from spent wells.

When oil prices are low, it's cheaper to buy foreign oil than squeeze shale - but oil prices have not, and probably will not, be low for quite some time, so I expect they will be around for a while. What's more, they are currently completely debt-free and are generating income from several properties to fund their operations.

This is a medium-range stock. I will hold it for this year in hopes that they take off. If they don't, I'll take a look at it again in December to decide whether it's worth holding for another year.

Krispy Kreme (KKD)

Company:	Krispy Kreme Donuts
Web Site:	http://www.krispykreme.com
Purchase Price:	$3.11
Current Price:	Click Here

Krispy Kreme makes some of the finest donuts on the planet. The company has been in business since the 1930's, but only recently wet public and began to expand their chain nationally and internationally.

I bought into this company because they have a long track record of success, an the opening of a new franchise always causes a mob scene and makes the local news. They're having some growing pains, but I expect they will recover and the stock will return to its previous levels ($12 to $15 per share).

This is another long-run stock, which I will hold indefinitely.

Revlon (REV)

Company:	Revlon Cosmetics
Web Site:	http://www.revlon.com
Purchase Price:	$1.18
Current Price:	Click Here

Revlon corporation is a household name: they've been in the cosmetics business for ages, and were at one time a major player. You can still find the Revlon brand in drug stores, supermarkets, and major retailers.

The main reason I'm buying in is that Revlon is a major player and a highly profitable organization that's been around for ages. They're currently in a slump, but I expect that they will re-gear their organization and re-focus their brand, and the stock will recover as well.

I'm into this one for the long run, and plan to hold this stock indefinitely.

Opening Positions

To start off the new year, I've created a new brokerage account and funded it with $2500, and have invested in the following four companies:


I'll explain the "what" and "why" of each in follow-on posts.

In the Beginning ...

I'm starting this blog to track my penny stock investments. Though given my historical performance, it's more accurate to call it my penny stock "gambles." I've been investing in penny stocks for a long while (more than ten years), and have had a few spectacular successes, some dismal failures, and a lot of stocks that simply fade away slowly and painfully over time.

In general, I'm a fairly conservative investor, and keep most of my assets in mutual funds and big-board stocks, but I like to dabble in the small-caps - so what you see here isn't typical behavior, nor do I recommend it to anyone as a means of building wealth. I wouldn't advise risking any more money on penny stocks than you would at a craps table. In fact, your chances are probably better at craps.

Said another way ... don't try this at home, kids.