I answer the questions your searches pose

It is always fun to see what search terms people use to find my blog. Here are my responses to a few of the most memorable, with the search terms phrased as questions:

Q: Are covered calls a bad investment
A: Yes. Mathematically, selling covered calls is just like writing puts. Small reward, big downside. Plus, the commissions for options at most brokerages are very high.

Q: Is Bernie Schaeffer a fraud/scam?
A: No. But you shouldn’t listen to him if you want to make money in investments. You’d do better in an index fund. Plus, his fees are outrageous.

Q: Cheap disclosures on felonies?
A: Huh?

Q: Can I earn $100k per year on my investments?
A: Yes, if you have $2 million and invest it in stocks or bonds yielding 5%.

Q: Is Fox Petroleum (OTC BB: FXPE) a good buy?
A: No. If you think it might be, please find a nice Vanguard index fund for 99% of your money and amuse yourself at the horse track with the other 1%.

Q: Have I made a bad investment?
A: If you have to ask, then yes, you probably have.

Q: I lost all my savings trading.
A: Work hard, save some more, and this time invest it in a target-date retirement fund from Vanguard. Over time you should do okay.

Q: I recommend Fox Petroleum.
A: I don’t.

Q: [Can I] make a million shorting stocks?
A: Easily. Just start with two million. After awhile, you’ll have $1 million. Keep in mind that when short selling, you are going against the long-term trend of the market. Are you good enough to beat those odds?

Q: [Are there] microcaps with dividends?
A: TSR [[tsri]] comes to mind.

Q: [Are there] otc value stocks?
A: Yes, and I bought one a couple weeks ago. I won’t tell you what it is, though. I may wish to buy more, and it is very risky.

Q: UPDA why is it a bad investment?
A: Actually, it might not be. Considering that the company owns 87% of another penny stock, which has an implied market cap over $200 million, and its market cap is $30 million, it could be profitable to buy it. Of course, my bet is that the company it owns will see its share price decrease, so a prudent person would avoid UPDA.

Disclosure: I am long TSRI. I have no pecuniary interest in any other stock mentioned. My disclosure policy, by the way, invests in index funds and low-cost ETFs.

0 thoughts on “I answer the questions your searches pose”

  1. I bought CBAI almost a year ago. It’s dropped 50% since I bought in but everything I read about this company is positive. Should I stay for the long haul?

    1. David,

      I cannot give any specific investment advice, but the general advice I give is to never, ever invest in OTC or pink sheet stocks (although they can make for good day-trades and good shorts). Many of these are pure scams, with little in the way of real businesses. They exist solely to be fodder for pump & dumps. Even the non-scam stocks are usually just hope & dream companies, with very low chances of ever succeeding in their business. A great example of the hope and dream kind of company is Cytocore (CYOE) … I blogged very negatively about it in late 2007 and early 2008. As a result, some stupid investors who believed in the company posted my home address on a message board and implicitly threatened my wife and me. I of course have the last laugh because the stock is down 98% since then. That long-term drop into oblivion is the fate of most OTC companies. While a 50% loss may seem bad, long-term holders of OTC stocks often end up with much worse returns.

      http://www.goodevalue.com/2007/12/27/when-nobody-knows-how-many-shares-are-outstanding/
      http://www.goodevalue.com/2008/02/cytocore-management-by-hype-and-distortion/
      http://www.goodevalue.com/2008/01/i-matter/

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