|
Future File Update:
Overall, my positions didn't do too badly in the latest correction. The exceptions were APA Optics and GeoWorks. I'm still bullish on both companies and serious buying opportunities were there for the taking. GeoWorks hit an intra-day low of US$14 on April 4th. It bounced back to close over US$20.
APA Optics hit an intra-day low of around US$20. Obviously, in retrospect, this was a time to buy.
I think Illinois Superconductor provides a good illustration. As a blanket rule, any time a recommended stock goes up 700% in a matter of days, you should be taking some profits. That doesn't mean sell all of the position. I still like ISCO and think it will be a great stock over time. But we're here to make money, and sometimes that means taking profits off the table.
Trailing stops
Of course, most stocks aren't going to jump like ISCO did. Make use of mental trailing stops to deal with these situations. I suggest applying stops after a position has made substantial gains, say 75%. Trailing stops should be used for protection against weakness in individual stocks.
Use mental stops, they require you to pay more attention to price activity, but you won't run the risk of losing a good position on an intra-day price swing. Remember that market-makers and specialists will try to trigger stops to pick up cheap shares.
I don't advise using stops on new positions, before there are profits to protect. APA Optics is a good example. The combination of a lack of news and market weakness cut the price to less than half of my entry price. Many of the stocks I recommend are speculative investments. And I try to get there before the big news hits. Volatility is to be expected.
Pliant Systems and Fastcomm Communications
Good things are happening at Fastcomm. The re-listing application for Nasdaq has been completed. CEO Peter Madsen predicts the company will be profitable over the next two quarters. And Fastcomm made an excellent acquisition, Cronus Technologies. Cronus did US$10 million in revenues in 1999. These revenues will go straight to Fastcomm's bottom line, effectively tripling cash flow. But the news fell on deaf ears as the market corrected.
Look for more news in the coming weeks. I anticipate a nice move up in the stock price as money moves back into the tech sector. Fastcomm is one of the better OTC plays. Re-listing on the Nasdaq should be worth at least a 25% jump in price. Overall, I expect a double just in time for the summer doldrums.
Pliant Systems has been unusually quiet. We should be seeing some news about the Pliant 3000 within the next month. Let's wait and see what kind of interest there is in testing the product before we make any decisions on how long to hold it.
Precision Optics, GeoWorks and Barpoint.com
Precision Optics hit fire-sale prices in early April, sitting around US$15 for several days. I'm a little amazed that this stock has stayed at such bargain prices. I doubt it will last for long. As soon as the 100 gigahertz filter is announced this thing is going to rocket. Take advantage of any opportunity to add to your position under US$20.
I mentioned earlier that GeoWorks had hit US$14 on April 4th. I didn't have any cash available to grab some and I'm still kicking myself. I anticipate a run for this stock into July as companies take advantage of favorable licensing programs. Recent articles in Red Herring and TheStreet.com mention GeoWorks as a player in the wireless space. This will help raise awareness of the company, adding to the upward momentum of the stock price. GeoWorks is a strong buy and should be a core wireless holding in any portfolio.
Barpoint.com has sold off substantially from its high of US$25. This is another development stage company so I recommend giving it some growing room. Over the long term, relationships with Motorola and over 300 retailers will bear fruit. I continue to rate Barpoint.com a buy under US$15.
To keep up with the latest changes and updates to the Taipan website, make sure you're subscribed to e-dispatch, Taipan's free daily email alert service. To subscribe to the service, click here.
|
