I am not a registered investment advisor with the SEC. Nothing in this video, should be taken as legally binding investment advice, in the same way that SEC licensed stockbrokers can advise their clients. I am not “selling” any stocks or OTC penny stocks as a broker in this video. The purpose of this video, is only to offer guidance to those who are interested in educating themselves, about self-directed investing and Biblically Responsible Investing (BRI).
UPDATE: 1/31/23 – I stand corrected. There actually are college textbooks about investing. I suppose this would be for people trying to get a bachelor’s degree in economics and finance. I’ve even come across a degree called the B.A. in Finance and Investment, but these usually seem to be only found in British Empire type countries. Although I did see one degree called the B.S. in Investment Management in Boca Raton, Florida at Lynn University. Apparently the two leading textbooks for classes like this are the following:
1. Zvi Bodie, Alex Kane, Alan Marcus, eds. Investments, 12th ed. (McGraw Hill, 2020).
2. Bradford Jordan, Thomas Miller, and Steve Dolvin, eds. Fundamentals of Investments, 9th ed. (McGraw Hill, 2020).
I guess you could call this a PLAYING THE ODDS STOCK SCREEN. If this method works, then it could mean that for every 130 IPO stocks that you buy, that one of them could blow up to 700% some day…
Here’s a 1 in 53 odds stock screen. A whole lot better than the 1 in 301 million odds you play with a lottery ticket I’d say. Buy 1 share of all 53 of these stocks and watch what happens in a week or so.
UPDATE: 2/1/23 – Here’s an example of a 1-IN-28 “PLAYING THE ODDS” STOCK SCREEN. I have every reason to believe this could be very profitable for investors who decide to buy all of these (just 1 share) for monitoring the price movements in real-time on schwab.com. Then when one of them blows up to 200% or 300%, put more money into it. My observation is that screening by IPO date actually limits opportunities for finding fast growers. So I have excluded that criterion from my screens. The only ones that seem to matter are these: 1. Market Cap: -Micro (under $300mln). 2. Change: Up 15%. Notice how Motorsport Games (MSGM) still populated in this screen. Just as Genius Group (GNS) populated in the last one. Each of those was at 713% a day and 206% at one point. Screening for microcap stocks really seems to be the way to hit home runs with stocks. Its at least part of the puzzle of the investments picture. Even the government put out a pamphlet called Microcap Stock: A Guide for Investors (2004), as if to say I’m really onto something here, so better play by the rules.
UPDATE: 2/1/23 – Here’s a 1-in-22 Odds Stock Screen. This is the best one yet I think. Buy ’em and watch what happens (except for non-BRI ones).
Which do you think is a better way to make money? A 1-in-22 odds microcap stock that could double or triple or even multiply your money seven times in one day? Or a local Cash Pop lottery ticket for $1 or $2 that gives you a 1-in-31 chance of winning a grand return of $5 or $10? Its a no-brainer! Screen for microcaps! Buy 22 of these and watch for price percentage changes on schwab.com daily. If one goes into 200%, 300%, or higher, then put some money in to multiply your gains. Its just that simple!
Of course, another odds-advantaged way to screen for stocks would be this way. In this case, I left out the criterion of Market Cap entirely, because Finviz just didn’t have information on it for two stocks (-). So I just used:
1. Price: Under $2.
2. Change: Up 20%.
This resulted in 28 growth stocks with FOUR of them growing fast–I repeat–FOUR OF THE 28 STOCKS from this screen were currently in rallies ranging from 100% to 200%. If you bought 1 share of all 28 of those stocks, then you’d be sittin’ pretty today, for some growth opportunities, provided you put a couple thousand into each of those four fast growers.
Although it seems all that is necessary to get the most out of a growth stock screen is just this one criterion: Change: Up 20%…
UPDATE: 2/2/23 – The potential for stock price manipulation by the financial press. This has been one of the thoughts I’ve had provoked by reading chapter 8 of One Up on Wall Street by Peter Lynch. To my surprise, although Lynch is a big supporter of penny stocks and microcap stocks, or stocks that sell anywhere from 25 cents to $3 dollars, at the same time he speaks against investing in any of the high-tech, biotechnology, or software companies that often pop up in this category. Mergers and acquisitions: an often frequent microcap category–he’s supportive of that. But the high-tech microcap stocks: a big fat NO from Peter Lynch. Why? Well, he doesn’t quite come out and say it like this, but I think I can get the gist of his notion: it all seems to boil down to whether the company’s product is easy enough for a reporter to write about it in an article in the financial press. The Wall Street Journal, Barron’s, Inc, Fast Company, Forbes, Fortune, and Bloomberg Businessweek–although Lynch doesn’t come out and say it like this–it seems that this is part of what he’s hinting at. If the company, if the stock, is sensational, easy to understand, or might even have a goofy product or goofy company name: there’s a higher chance of that stock getting written up by some reporter in the financial press. I think that Lynch might agree with me, and just common sense, that the average reporter has no interest in writing about complicated biotechnology and software subjects. Most reporters are young and fresh out of college anyway: they are the furthest thing from a grey-haired security analyst who only looks at stock numbers, percentages, and P/E ratios. When a financial reporter publishes some article about an easy-to-understand stock, then it can often create a feeding frenzy and sometimes cause that stock’s price to go up 200% or 300%, after the financial article has been published. So when you’re buying, selling, and trading stocks–its good to pay close attention to which stocks were being written about either yesterday or today in the high-profile financial publications. However, I can’t say which publication has the most microcap feeding frenzy influence out of all of them. It seems to me that the most efficient way to keep a pulse on recent stock news would be to skim over the Finviz News page every day.
TEST THE HYPOTHESIS: (for “financial press” I typed the company and stock ticker into Google: then I click on the “News” feature, then I clicked on “Tools” on the right, then I clicked on “Sorted by relevance” and switched to “Sorted by date.” Then I looked to see if any significant news articles, were published about the following rally stocks, the day before their their stock prices soared. Was there a possible cause-and-effect relationship between a stock news writeup the day before and the same stock’s price soaring the next day? We shall see…)
1. Genius Group (GNS) – 290% on 1/19/23 – financial press: 1/18/23–the only two articles that I found posted the day before the GNS rally were one by stocksregister.com and businesswire.com – the first one said “Genius Group (GNS): A Hidden Gem Despite Volatility” and the second website (owned by Berkshire Hathaway, Warren Buffett’s company) said: “Genius Group Wins Real Leaders Impact Awards.” The Google chart shows that the price of GNS had been steadily rising from 40 cents to 58 cents (from January 6th to January 17th), it slightly dipped to 54 cents on 1/18/23, and then exploded to $2.09 on 1/19/23, which resulted in a 290% gain for that day. It continued to soar to $4.71 on 1/23/23 which is when it reached its height; and then it started to decline the next day. GNS started out as a penny stock going for 32 cents.
2. Motorsport Games (MSGM) – 713% on 1/31/23 – financial press:
3. Versus Systems (VS) – 247% on 2/1/23 – financial press:
4. Mobile Global Exports (MGAM) – 161% on 1/31/23 – financial press:
5. Bright Green Corporation (BGXX) – 228% on 2/1/23 – financial press:
6. Digital Health Acquisition Corp (DGACW) – 200% on 2/1/23 – financial press:
7. AlphaTime Acquisition Corp (ATMCW) – 100% on 2/1/23 – financial press:
8. Golden Sun Education Group Limited (GSUN) – 125% on 2/1/23 – financial press:
There also might be something to be said about the popularity of a company with regard to its stock growth. It would likely have to be sudden, newfound popularity. One quick way to determine if one company is astronomically more popular than other ones, is to type all of the stock companies that you are considering into Google and mark how many results popped up. For example, as of the writing, Innovative Eyewear is at 100% on Finviz. When compared to the other stock rallies, it blows them out of the water in terms of Google results: almost 14,000,000 results on the search.
COPY PETER LYNCH AND YOU CAN’T GO WRONG
A lot of the hyper-analysis of Graham, Buffett, and even Lynch at times seems to be kind of a drag; and might actually hinder financial success through stocks. At the end of the day, I’m growing to view stocks as a playing the odds game. It seems to me that the only way to win at a game of odds like this is to have a stake in practically every growth stock. Then when one of your 1,000 stocks blows up to 200% or 300%, just put more money into it in order to multiply it. Why 1,000? Here’s what Lynch said:
How do you design a portfolio to get that 12-15 percent return? How many stocks should you own? Right away I can tell you this: Don’t own 1,400 stocks if you can help it, but that’s my problem and not yours. You don’t have to worry about the 5-percent rule and the 10-percent rule and the $9 billion to manage (One Up on Wall Street, p. 241).
Here he’s warning against overdiversification. If you put a lot of money into 1,000 stocks, then that would hinder your growth. But I believe that overdiversification only becomes a problem when the asset allocation is blown out of proportion. Like, for example, if you put $100 into 1,000 stocks, the likelihood of you losing $100,000 would be very high. And unlike Lynch, I’m not talking about a set-it-and-forget-it mutual fund. All I’m saying, is that in order to get visibility on real-time stock price movements, this is something you absolutely need to have in your portfolio, if you want to take advantage of sudden, surprising, and profitable trading opportunities. This aspect is worth buying 1,000 stocks in my opinion. But when I say, “Buying 1,000 stocks,” I basically mean buying only one share of each of those stocks at first. And then only deciding to add more shares to the stocks that start to dramatically gain by price increases (Lynch, op. cit., p. 126). But why stop at 1,000 stocks. There’s over 8,000 stocks on the stock market. I suppose the ideal situation would be to own one share of every single stock on the stock market; and then once one of them blows up, THEN DO YOUR ANALYSIS, and ask yourself if you have a clean conscience about ADDING MORE SHARES for financial growth.
UPDATE: 2/4/23 – As you can see I’ve been literally living inside of Finviz for weeks trying to understand growth stocks, and especially the microcap stocks within the growth stock category. These are “price appreciation” stocks: not the type of stocks you’d expect dividends from and hold for years and years. These are the type of stocks that you buy, with the expectation that one day they will double or triple your money, and then you can sell your shares, and take your gains to the bank. To see many of these same stocks pulled aside and appearing again on the “Total Return” screen for Value Line was very reassuring: