Re: [CANSLIM] MicroCaps

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] MicroCaps
Date: Thu, 21 Mar 2002 23:05:15 -0500
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Chaz,

One (among many) problems in trying to invest (vs trading) in small caps =
that are both low priced and thinly traded is the lack of liquidity. The =
four times I bot EPIQ, the ADV was under 10,000. Didn't stop me making =
very respectable money on it, but I did have to buy it with a long term =
perspective, and a willingness to sell it only after a lot of other =
retail investors (and eventually mutual funds) discovered it and placed =
it under demand. That also meant being willing to hold it thru the hard =
times, when a few hundred shares sold could move it down sharply, =
because I believed in the business model given the state of the economy =
at that time.

Same is true of MDII, which just gave me nearly a 100% return in under a =
year. Volume was very sporadic, often trading next to no shares at all. =
But when the buyout was announced, I could have sold hundreds of =
thousands of shares without a problem or a price penalty.

That's one of the many reasons why I don't post my stocks, they just are =
not suitable for most investors, much less CANSLIMers.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----=20
From: Gene Ricci=20
To: canslim@lists.xmission.com=20
Sent: Thursday, March 21, 2002 12:44 PM
Subject: Re: [CANSLIM] MicroCaps


Charley, I'm not Fred.... I bought a lot less than $25,000 and it took =
me 7 days to get in.....without really raising the price.=20

If you buy $25,000 @ $19.70 you'll want over 1k shares.... it's 11:30 =
CDT and zero shares have been traded today (normal 1300 shares) ... if =
you can afford to sell slowly probably no big deal.... but to sell 1k+  =
in one day will most likely cause you significant PAIN! Today's ask is =
$19.70 and bid $19.00... no bites... what price would interest a buyer =
to buy 1K shares today???

Gene
  ----- Original Message -----=20
  From: Chazmoore@aol.com=20
  To: canslim@lists.xmission.com=20
  Sent: Thursday, March 21, 2002 11:19 AM
  Subject: Re: [CANSLIM] MicroCaps


  Fred: I too see the financials moving although I have not ventured =
into the micro-caps. My general rule is to invest $25,000 to $30,000 in =
any given stock, and I would follow that rule even with micro-caps. Can =
you briefly explain the downside? For example, if I bought $25,000 of =
NASB, would I have any trouble unloading tomorrow? Charley=20

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<BODY bgColor=3D#ffffff>
<DIV><FONT face=3DArial>Chaz,</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>One (among many) problems in trying to invest =
(vs trading)=20
in small caps that are both low priced and thinly traded is the lack of=20
liquidity. The four times I bot EPIQ, the ADV was under 10,000. Didn't =
stop me=20
making very respectable money on it, but I did have to buy it with a =
long term=20
perspective, and a willingness to sell it only after a lot of other =
retail=20
investors (and eventually mutual funds)&nbsp;discovered it and placed it =
under=20
demand. That also meant being willing to hold it thru the hard times, =
when a few=20
hundred shares sold could move it down sharply, because I believed in =
the=20
business model given the state of the economy at that time.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Same is true of MDII, which just gave me nearly =
a 100%=20
return in under a year. Volume was very sporadic, often trading next to =
no=20
shares at all. But when the buyout was announced, I could have sold =
hundreds of=20
thousands of shares without a problem or a price penalty.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>That's one of the many reasons why I don't post =
my stocks,=20
they just are not suitable for most investors, much less=20
CANSLIMers.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV>Tom Worley<BR><A=20
href=3D"mailto:stkguru@bellsouth.net">stkguru@bellsouth.net</A><BR>AIM:=20
TexWorley</DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dgenr@swbell.net href=3D"mailto:genr@swbell.net">Gene Ricci</A> =
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
 </DIV>
<DIV><B>Sent:</B> Thursday, March 21, 2002 12:44 PM</DIV>
<DIV><B>Subject:</B> Re: [CANSLIM] MicroCaps</DIV></DIV>
<DIV><BR></DIV>
<DIV><FONT face=3D"Comic Sans MS">Charley, I'm not Fred.... =
I&nbsp;bought a lot=20
less than $25,000 and it took me 7 days to get in.....without really =
raising the=20
price.&nbsp;</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"></FONT>&nbsp;</DIV>
<DIV><FONT face=3D"Comic Sans MS">If you buy $25,000 @ $19.70 you'll =
want over 1k=20
shares.... it's 11:30 CDT and zero shares </FONT><FONT face=3D"Comic =
Sans MS">have=20
been traded today (normal 1300 shares) ... if you can afford to sell =
slowly=20
probably no big deal.... but to sell 1k+ </FONT>&nbsp;<FONT=20
face=3D"Comic Sans MS">in one day will most likely cause you significant =
PAIN!=20
Today's ask is $19.70 and bid $19.00... no bites... what price would =
interest a=20
buyer to buy 1K shares today???</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS"></FONT>&nbsp;</DIV>
<DIV><FONT face=3D"Comic Sans MS">Gene</FONT></DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
  <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
  <DIV=20
  style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
  <A title=3DChazmoore@aol.com=20
  href=3D"mailto:Chazmoore@aol.com">Chazmoore@aol.com</A> </DIV>
  <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
 </DIV>
  <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Thursday, March 21, 2002 =
11:19=20
  AM</DIV>
  <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
MicroCaps</DIV>
  <DIV><BR></DIV><FONT face=3Darial,helvetica><FONT size=3D2>Fred: I too =
see the=20
  financials moving although I have not ventured into the micro-caps. My =
general=20
  rule is to invest $25,000 to $30,000 in any given stock, and I would =
follow=20
  that rule even with micro-caps. Can you briefly explain the downside? =
For=20
  example, if I bought $25,000 of NASB, would I have any trouble =
unloading=20
  tomorrow? Charley</FONT> </FONT></BLOCKQUOTE></BODY></HTML>

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