Decisions Decisions

As mentioned before, I plan to begin popping out a couple of junior stock picks of mine over the next few weeks. But first, for those who are new to the juniors but want to learn,then listen up, but for the pros they will want to skip.
I want to discuss the subject of the high risk hazards and murky waters of the junior stock penny game and how the crucial decisions you make after doing your due diligence can effect your success rate.

Lots of cash can be made from these stocks if you understand the game and how it differs from the blue chips and the mid caps stocks while following a set of rules that will reduce your chance that you will lose ,let alone get outright burnt by unscrupulous companies. I'll be the first to admit to going to the school of hard knocks to learn these valuable lessons over the years, but my success rate has been much better the last several years because I started to follow a system check list that helps me avoid what I call the "shady money".

One reason I like Stockwatch.com is not only the market depth action and news updates, but I can research anyone in the company going back to 1990. That alone is worth it's weight in gold. When finding a stock you like, the first thing you have to do is go to the "Company" section and see what I refer to is "the cast of characters", AKA "the management". These people will 90% of the time determine your odds even if the "story" sounds so enticing. Once you see the difference on who these people are and who they have been with before, you have a massive insight into their success rate.

You also have to use the yearly business cycles of whatever the sector is to determine whether it is a good time to buy in or not. Is it the spring sell off ? Is it the summer doldrums when most juniors have a hard time promoting ? or is it coming into the best time of the year when the junior resource stocks who actually have real deal/new property/ successful summer drilling results ?

The fall is that ripe time for them to raise money and promote the crap out of their company to attract larger shareholders who may participate in the private placements. This is where it gets dicey separating the wheat from the chaff and having some real DD skills and using charts all comes into play in a major way.

I will delve more into this over the coming weeks but when I find management with successful backgrounds starting up a junior, I am all ears. But there are other sharks in the ocean you must avoid too that will chomp your ass when given the chance.


Til next time !