Stock Trading - Entry 15

I still say I got lucky with a one-day delay in a money transfer since that left me with $95 dollars to spend. To keep my portfolio balanced and to make it easy to recover the trading fee, I need to acquire at least 600 stocks in a given company in one shot. This put me square into penny trading and venture capitalist territory. (Again, I am writing what I thought based on what I found and this is NOT advice.)

What does investing in that territory mean? In this situation it means dirt-cheap stocks under 15 cents each where bulk buying makes the slightest price movement is important for many investors. I am not them. I want to hold for a while at least, which puts me on shaky ground because I won't know when those investors aim to cash out. Plus, a lot of these stocks are either barely getting started or are on their way out (for one reason or another). To mitigate risks, I need to look at things other than price.

Take, for example, Imperial Ginseng. They issued a hefty dividend to shareholders in 2023 because they decided to sell off their equipment and farms, basically to close up shop. Newsflash #9: It takes time for a company registered on a stock exchange to close and be de-listed. But, I like how they did it. They issued those dividends a few months before knowing full well the stock price would tank due to the planned closure. With dividends, investors could effectively get their money back on stocks no one else would want to buy. The notice of closure can be found here, not on price charts.

This leads me to one obvious but often-overlooked fact with penny stocks. Newsflash #10: Just because a (cheap) stock is listed and available for purchase, doesn't mean it's a good deal.

Let's see how this newsflash reveals itself with two examples I recently looked at, being GBLT Corp. According to this press release, the company's majority ownership has just been sold by someone with a PhD. to three individuals in a takeover. Does that mean the valuation reflects company performance? I could argue it either way. What do the three buyers intend to do with the company? I don't know. What can they bring to the company better than the former owner who has a PhD? I don't know. Without a few months of performance in this new context, this stock is too risky for me to invest in without insider knowledge. Do any who know care to share?

Another stock I looked at was Forward Water Systems. According to this article, they were sued by the company doing their advertising! (They settled out of court, but the deal only lasts one year.) Combine this with something that happened to me back in my university days where I was blown away with something my marketing instructor mentioned in class one evening. Newsflash #11: Marketing/Advertising is the only department in a company that generates revenue. Getting sued by your advertiser (outsourced or not) is a big red flag for me, period. Again, if I had not scratched the surface and bought, I would have been dismayed by likely lacklustre stock price performance. Still, I hope they resolve the quagmire of their advertising relationship over the long-term and do well in the future.

I have seen movies and reels about companies whose owner does something stupid and has to give away or sell all or a part of their company to...recover. Examples included bad mafia deals, gambling, or some other addiction (e.g. narcotics).

When I first looked, Quizam Media Corp. seemed to fall into that category as of early 2023 with a private placement by a software company that is getting into the cannabis industry. Thinking more about it, this looks like Quizam's performance is more likely tied to another company's spending, perhaps exclusively (i.e. being the outsourced marketing department of a company that owns a majority stake in Quizam). As a result, I have no way of gauging a direct investment in Quizam as a lone, third-party investor, so for that reason, I wish the other company all the best in having acquired a media/advertising/marketing arm.

At this point in writing this article, I admit I spend a lot of time looking at things other than the stock price and financial performance. That's because my analysis includes contextualizing a company's balance sheet. I need to see a company's strategy (in a paragraph or two), not just a number or chart.

That said, Grounded People Apparel actually has a clear strategy via its products. It was listed in Canada less than two years ago and is head-quartered in Europe. The stock price in Canada has been on a downward trend and is resting at what seems to be a floor. Being in the fashion sector, there are two reasons why I didn't buy. First, I wouldn't have bought any of the products. Great product concept, but my feet ask for more from what I can see in the design of those shoes. Second, my wife pointed out that the most likely purchaser of this product would be university undergraduate students from well-to-do families and in Canada, the largest percentage of them are from other countries on a study permit. Well, the Government of Canada is forcibly reducing their numbers for the next two years! Easy decision for me not to invest, but I had to look beyond the stock price and analyse the product strategy based on what I could see.

One company I am on the fence about is Quarterhill (QTRH). Yes, my wife is already invested in transportation, but only in North America at the moment. QTRH is globally diverse and is more about transportation systems and intellectual property (of what, I don't know), as opposed to actual transport. That said, a new, free tool I recently discovered, Simply Wall St., says QTRH has very good earning potential in spite of only becoming profitable recently. My problem is, I cannot really see a floor in the stock price except over the long-term. If I hadn't found anything better, I may have invested in them.

In terms of the online tool Simply Wall St., I will only use it in future searches as a quick confirmation. For example, take Amcomri Enterprises. At the time of writing this article, I couldn't find any new (good) products of their and I found only a brief mention of them in mainstream news back in 2022. Plus, Simply Wall St. said Amcomri had bad earnings, which came as little surprise to me, so I did not buy.

The stock I did place an order for is Progressive Planet Solutions, which applies clean technology in a number of realms and its stock price was nestled in at its floor. According to this publication, one of its newer inventions is a superior form of concrete that still needs approvals of a number of governments - the applications for which are in the works. At the time of publishing this article, Simply Wall St said this company has a few balance sheet risks, but duh! They just researched and developed a new construction material. Which can be used around the world. And they are still solvent. For that accomplishment alone I wanted in.

Before I could submit the buy order, the markets closed. But get this. That was the same day a press release came out announcing they would be getting continued royalties from a popular line of pet products. Intellectual property for cleaner planet stuff is not just construction materials after all. Well *beep*, didn't the price jump over a penny the next day when I placed my order! I don't know if that was due to penny traders who read that (who typically buy and sell within a very small price range - usually pennies) or other investors, but my order was left sadly unfulfilled.

But I left it open and sure enough, the market settled down and the price hovered at the floor - right where my outstanding limit buy was waiting.

My two lessons learned in penny trading with this round of analyses were to:

1. look beyond the stock price and financials
2. determine some wiggle room before placing a limit buy

(Read entry 5 on the steps to place a limit buy for stocks on WealthSimple and get $25 free dollars to invest as you see fit using referral code 6FEFNA via this link.)

During my research of stocks in tech and transportation systems, I stumbled across a blockchain (cryptocurrency) making headlines in those realms. I will write, in simple words, about mining a blockchain, the elements I consider to be a good blockchain to invest in, and show how that blockchain almost makes the cut for me as a new investor or miner.

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