My Record so Far

Following is my record so far on all stocks I have disparaged or praised in this blog (not just the ones on which I made a good call):

Disparaged:

American Realty Investors [[ARL]]: Down 1.4% since I pilloried this over-indebted real estate company.

Home Solutions of America [[hsoa]]: Down 49.4% since I discussed Andrew Left’s criticism of the company.

Document Security Solutions [[dmc]]: Down 33% since I criticized the company on August 21. While short the company at the time, I closed my short position at a loss to concentrate on other opportunities. Oops.

Remote MDX (OTC BB: RMDX): Up 96% since I criticized the company and its management. I was short at the time and I am short now. Ouch.

Sun-Cal Energy (OTC BB: SCEY): Down 82% since I slammed this stock back in mid-July.

Octillion (OTC BB: OCTL): Down 60% since I wrote about this horrid little penny stock. I was not short at that time but have since been able to sell short some shares.

Fox Petroleum (OTC BB: FXPE): Down 18% since I compared it negatively to Stormcat Energy [[scu]]. Going long Stormcat and shorting Fox would have resulted in a hedged profit of 8% since my article.

Continental Fuels (OTC BB: CFUL): Down 85% since I first pilloried this horrid little company. Down 65% since my second critical article was published October 12. I shorted this stock most of the way down, although I am no longer short. I do believe that the stock has quite a bit farther to fall, eventually to around $.01 per share or less.

H2Diesel (OTC BB: HTWO): Down 43% since I criticized it less than one month ago.

Praised:

International Shipholding [[ish]]: Up 39% since I discussed the sell-off in this stock on August 8.

TSR Inc [[tsri]]: Up 10.3% since I praised this undervalued microcap with lots of cash.

Hastings [[hast]]: Up 23% since I noted its great earnings on August 21. I owned the stock at the time and I sold it off a couple weeks ago at $9.12 per share.

Stormcat Energy [[scu]]: Down 10% since I compared it favorably to Fox Petroleum (OTC BB: FXPE). Going long Stormcat and shorting Fox would have resulted in a hedged profit of 8% since my article.

Neutral:

Movie Star Inc. [[msi]]: Down 14% since I discussed it July 10. In that article I explained that I thought it was fully valued despite being a good company.

Regent Communications [[rgci]]: Down 24% since I discussed the company’s annoying management back on August 16. I sold out my stake at a loss since then, although with John Ahn of Riley Investment Management (an activist hedge fund) getting on the board, maybe the future will be brighter.

My Overall Record

I was perfect on stocks that I liked (if we consider Stormcat to be a pair trade with shorting Fox Petroleum). I was 8 out of 9 on stocks I disliked. Both the stocks on which I was neutral or uncertain went down.

So should you buy the stocks I like and short the ones I dislike? Buying the stocks I like might work, but I like few enough that it would not lead to a diversified portfolio. Avoiding the stocks I dislike would be a very good idea. My record on stocks I dislike reveals an excellent reason why shorting stocks is so risky (and why most people should avoid it): while 8 of 9 stocks I criticized dropped, often by a lot, the 9th stock almost doubled.

Disclosure: I am currently short Octillion (OTC BB: OCTL) and Remote MDX (OTC BB: RMDX). Ending prices used in the return calculations are as of November 2, 2007 when this article was written (one week before it was published). My disclosure policy is batting 1.000.

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