It may be cheap, but is it a Goode value?
As a Twitterer, some of this cuts a little too close too home. I think I do a decent job keeping my tweets mostly focused on Stock-related matters (except for some replies to friends). I use it mostly to make comments that fit the theme of this blog but are too short for a full blog post.
I was an early lender on Prosper.com and I even garnered an appearance on local St. Louis TV news where I was interviewed about my experience lending money. I have written about my lending there previously on this blog. Considering that Prosper.com has reopened for business to California borrowers and lenders (after some SEC troubles), I thought I would revisit my Prosper.com loan performance.
Of my initial capital of $3500 in July 2006, I have now withdrawn $2294.47 and have a remaining loan balance of $1062.58. This puts my total loss so far at $142.95 or -4.1%. While that beats the stock market over that period of time, it fails miserably when compared to bonds, especially considering that Prosper.com loans are not liquid. If you wish to see more details on my performance, check out LendingStats.
Probably the most damning statistic is that my total recovery on $1469.51 in defaulted loans was $26.93, for a recovery rate of 1.8%. That is horrible even for unsecured consumer loans.
One of the risks of saying negative stuff about microcap companies (as I often do) is that the crooks, frauds, and losers who run them tend to like suing their critics for defamation. I have an expensive lawyer on retainer to vet my more inflammatory blog posts and to respond to idiots who try to sue me. I resent the fact that I am more at risk of getting sued than are the corrupt CEOs who blatantly lie and then hide behind ‘forward looking statements’ and disclaimers. Because of this, I take umbrage at any who would curtail freedom of speech in any way, anywhere.
So when it came to my attention that Susan Jeffers, a writer of annoying self-help books, had her lawyers issue a cease and desist letter to a blogger who used the phrase “feel the fear and do it anyway” (which is the title of one of her books), I felt that I had to blog about it. Certainly I felt fear. But I did it anyway (without even reading her book).
I also did it without asking her permission, even though her website states:
“The phrase, Feel the Fear and Do It Anyway®, is Susan’s registered trademark. If you wish to use this phrase for any purpose whatsoever, you are legally required to seek permission from Susan. You can do so by contacting admin@susanjeffers.com.”
There is one problem with this statement. It is absolute poppycock. A trademark on a phrase does not prevent someone from using that phrase in a non-commercial manner. A trademark only protects a mark from being used by competitors; it does not prevent a trademarked phrase from being used by anyone. I should also point out that the phrase that is trademarked is “FEEL THE FEAR…AND DO IT ANYWAY” with an ellipsis (search for it on TESS to see more details), not “Feel the Fear and Do It Anyway”
Disclosure: I am not a lawyer. Despite that, I feel little fear that my interpretation of trademark law here is wrong and even if I did, I would post this anyway.
(click image for full chart)
I would congratulate Stockpreacher.com on the skill with which they have in consecutive weeks sent Candela Corp (CLZR: $0.00 0.00%, market cap: $N/A) up 100% and on April 20, NetSol Technologies (NTWK: $0.9556 -0.46%, market cap: $33.9M) up 60% (from $0.45 to a high of $0.72). However, their pump of NetSol attracted so much interest that it crashed their website. On the day it was pumped over 5 million shares were traded versus an average of 400,000 shares per day in the prior week. I can only guess that 1 million more shares would have been traded if StockPreacher’s website had not crashed.
Of course, like most pumped stocks, NetSol and Candela both fell after the pump and I profited from short selling both of them (I also profited from buying NetSol into the pump). Tim Sykes also has a post on this pump and how he (and I) profited from trading it. Do you want to learn how I have made $2577.30 in 2009 and $50,801.90 since last June by following Tim Sykes’ trading system? Buy some of Tim’s stuff (like his Pennystocking Part 2 DVD set … but skip Part 1) and find out.
For those who must know, I bought NTWK at $0.47 (because their website was down and my email was slow I found out which stock they were pumping from a post in the InvestorsUnderground Chatroom, which is a great place for day-traders), sold at $0.61, went short at $0.65, covered at $0.58, went short again at $0.64 (all on 4/20) and covered at $0.57 on 4/21. I made over $1500 in under 24 hours with no more than $4300 at risk at any time. Not bad, eh?
Disclosure: No positions in any stock mentioned. I am an affiliate of InvestorsUnderground and Tim Sykes and will make a commission if you buy junk using my links. I am a subscriber to InvestorsUnderground. I am a TimAlert lifetime member and have purchased Sykes Pennystocking 1 & 2 and received TimRaw as part of a TimSeminar I attended. I have a disclosure policy that loves to profit from idiots who put faith in stock touts.
You will not see Patrick Byrne or any other idiot who rails against naked short selling say this, but naked short selling is for all intents and purposes dead. The Reg SHO threshold list of stocks with persistent fails to deliver is getting quite short. As I write this only three NYSE firms are on the list versus dozens in mid-October 2008. There are only 23 Nasdaq or OTC BB firms on the threshold list (and only 8 of those are Nasdaq stocks). Even though stocks have gone up over 20% recently (with the most-shorted stocks rising the most) and short interest in the market has increased, fails to deliver have not increased from low levels of a month ago.
The current decline in fails to deliver (and therefore in naked short selling) can be traced to the SEC’s tightening of Reg SHO last summer. Short-biased traders like myself have definitely noticed the increasing difficulty of holding long-term short positions over the last year (I just received a forced buy-in today, in fact).
Naked short shelling conspiracy theorists should find a new conspiracy about which to obsess.
I will be writing to the SEC to comment on the proposed uptick rules. If you would like to help out or potentially add your name as a signatory to my letter, please contact me. (Unsurprisingly, I will be against the proposed rules, but least against an upbid rule only when a stock is already down 10% or more). I will get back to you.
Please, this will take enough time as it is, don’t email me unless you really are interested and have something to say. Feel free to comment here if you want to discuss the uptick rule.