How I Screwed Up Shorting Cannon Exploration Inc (CNEX), Down 40% Today, While My Readers Are Making Tens Of Thousands

Where do I even begin on this one. Like my previous near-perfect call on fellow joke of a company pump and dump VRML, my readers made much more $ than I did. In fact, I lost a bundle shorting CNEX the other day at $6, admittedly too early/forced to due to the circumstances, covering at $7.20 yesterday, not wanting to risk a big-time gap higher/possible short squeeze today. Fortunately for me, there were shares available to short this morning so I reserved 500 and as I posted HERE, I planned on watching this one all day, shorting only when the pattern was to my liking.

After a slight gap higher, the buyers were drowned by sellers—we’re talking 10k volume here folks, nothing major—so I quickly placed an order to short sell with a limit of $7 when the price was $7.25 x $7.30…3 minutes later the priced had cracked big-time below my limit and it appeared I hadn’t gotten my execution. Damnit! Having been in this spot many times before, I knew it’s tough shorting into probable morning dumps so I lowered my limit to $6.50…nope, still no execution…20 seconds later and the stock was testing $6.  

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Hey, Randall Lane, You Sick Twisted Son Of A Bitch, Remember Me?

Photo Of Randall Lane By Chester Higgins Jr./The New York Times

Note: Aside from the last paragraph this post is written following the journalistic style of Randall Lane—treating assumptions and circumstantial evidence as fact. It’s cruel, amateurish and immature—oh yes, I know—but that basically sums this guy up so in order to help him grow up, he must be given a taste of his own medicine.

To those who don’t care and just want stock picks—this is also a great lesson on how to pounce when your enemy is wounded, no different than the vultures who took out Bear or LTCM.

Last time Randall Lane, editor-in-chief of Traitor Monthly was in Page Six, he was attacking a small-time trader (me) because his magazine staff fumbled, disinviting me from their little party at the last minute after we’d been discussing my covering the event for MSN Money for days.

Clearly in the wrong, this balding bastard was forced to go on the offensive, charging my hedge fund’s losses were the result of my publicity hounding rather than bothering to research the matter like a responsible journalist might do (turning his nose up at the complimentary book I’d sent him weeks before that explained the situation in detail) and running his arrogant mouth off to the press, confident of favorable treatment due to his connected Forbes wife.

Now, just a few months later, the tables have turned as Lane himself was fired as publisher of the Player’s magazine by Lenny “Nails” Dykstra who called Randy boy out on what he’s becoming known for, trash talking when he doesn’t get his way: “If you want to fight, take me on. Don’t go behind my back and bad mouth me,” said Dykstra. “He thinks I’m going to buckle,” said Dykstra, referring to Doubledown President Randall Lane. “I don’t buckle - I go to war.”  

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Stock Puppets: A Funny Thing Happened On The Way To Cutting Through Industry BS

When I created this book-blog-DVD publishing business model that is BullShip Press, LLC, I figured I’d repeat my feat, become the top ranked / most popular guy on Covestor, show everyone exactly how to turn thousands into millions trading fantastically predictable penny stocks without using any leverage whatsoever, cut through all the industry corruption and ego, teach a few people and many former suckers how to profit from it, and piss a few others off by promoting my book An American Hedge Fund and instructional DVD PennyStocking in EVERY blog post (cuz they’re that important / helpful / necessary and help cut down too many questions / emails I get).

Everything’s been going well—and then, a few weeks ago, I discovered some bastard using a variation of my name, “timsykus1” on the animalistic Yahoo! message boards. I did some research and discovered the term for this kind of deceit is a “sock puppet”. I thought, okay, that was bound to happen, ignore it.

Flash forward to last night when I’m doing my nightly screen for potential pump and dumps and I come upon VRML, a miserably failing biotech in the same vein as its Paulie-from-the-movie-Rocky-like relatives REED, PSTI and VION, all of which were great to short sell into. And lo and behold, who do I see promoting this thing that belongs in a toilet—yup, “timsykus1” again, using my good name—at least to those who are blind in one eye—to pump this stock!  

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Trading Means Never Having To Say You’re Sorry

It’s trades like MXC that really make my blood boil. While PDO was a near perfect trade—even though I profited 30 cents/share, it’s now down $1.25ish just 1 day later (gotta love not being willing to risk it while traveling!)—as I posted, I never meant to enter MXC at all so this morning I just played it safe—as usual, lately—covering at the open at $10.50. Sure, now it’s already dropped down to $9.25 and this could be the ultimate top, but also at the open, somebody bought 10k at $10.80 and there was no telling if a big squeeze would be on or not and since it’s definitely not an ideal trade, I wasn’t about to double up.

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Plunging Home Sales: The Latest Example Of Why Technical Analysis Trumps Media Scumbags

Home sales are plunging, 13%+ annual drop, largest since 1970, it’s gonna be another depression, we’re all gonna die—blehhhhhh! Who cares? Yeah you heard me—let the flippers suffer/go bankrupt/in debt, that’s what they get for their utter disregard of historical research and for listening to big talkers like Donald Trump who love to un/knowingly risk disaster.

Traders and investors who rely on the one true thing in finance—the charts—know better; the biggest homebuilders stocks (LEN), (KBH), and (TOL) are all slightly higher since this “disastrous” news broke and their charts have been bottoming for weeks. The overall market is up big over the past two days and it’s not because the stock market is some random uber-mysterious thing.

It’s because as much as financial media circus loves talking panic—it helps ratings—all this bad news is already priced in. That’s the beautiful thing about the stock market, it doesn’t care about media scumbags and their ratings-hungry outlets, nor does it bother reading the attention-grabbing headlines—only expectations matter. That’s right kiddies, it’s not that complicated—you just have to be aware of all the industry BS–my telling you this probly means I’ll never get to bring female models on CNBC again :(, but sometimes you gotta make sacrifices for the greater good.

Sure, expectations on individual stocks can be manipulated by the media and promoter scumbags, but not on macro issues—there’s just too many smart people who’ve learned how the game works. After all, the talking heads all put together ain’t worth more than a three-dollar bill because the market don’t give a damn about guesswork.

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ANALysts & Venture Capitalists Know S#@! About How SmallCap Stocks Trade

While I respect Andy Kessler for making a ton of $ back during the bubble and writing two superb books–Wall Street Meat and Running Money, this piece of s$#@ interview he gave on smallcaps really makes me mad. Not only does he believe it a foregone conclusion that investors should look for companies with emerging technologies, but he also refuses to name any names or give any kind of timeframe whatsoever for his theory.

To Andy and all other venture capitalists, do your thing with big companies, but don’t talk about smallcaps and microcaps—these companies ALL have cool technologies, but this isn’t 1999, most of these companies are gonna fail and their grim reality is reflected in their stock prices. While you have good intentions, interviews like this are what gets people investing / believing in these POS companies, inevitably losing $ and thinking this niche is random, which, if you focus on the proper variables—chart, volume, manipulation, message board hype etc—is clearly not the case. Dangerous dangerous dangerous, welcome to why media outlets are sooooo bad with smallcaps and microcaps–it’s a different world down here in the gutter, ain’t no place for WASPs!

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When Timmayyy Is Dead Right: Manipulated Stocks Go Boom!

For the 3 most recently manipulated microcraps—CNOA (pumped by a CNBC “reporter” who mistook paid-for stock promotion for credible research, probly the result of majoring in theatre studies in college (seriously)), EDEN (agriculture product pumped by a TheStreet.com “journalist” who forgot to read the quarterly report mentioning they sold off that division!) and TIGR (I don’t wanna know the evil lurking behind that pump, possibly some SEC counter-intelligence subdivision trying to draw out fellow manipulators) I have been dead on. These are opportunities from which you can profit because I’m not talking about variables that indirectly affect stock prices (ie earnings, the economy)—no, these catalysts have a direct impact on the supply/demand of shares and consequently the stock price.

Since my expose when it was at $1.80ish, CNOA has dropped 30% in a few days—longs, don’t blame me or say “I don’t get it, it had all the trends going in its favor, I guess penny stocks really are just like gambling?!?!” Hello no, this kind of price action is the precise opposite of random, it’s motherf$#@en PennyStocking—learn to play the game or suffer the consequences!

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Why I Just Shorted Eden Bioscience Corp (EDEN): TheStreet.com’s Factually Inaccurate Pump And Dump!

As I mentioned in this post, this near 100% runup is entirely due to THIS laughable Thestreet.com article mentioning this failure of a company as a “below-the-radar company that produces Messenger, a highly effective and revolutionary agricultural product.”

I could easily rip the company apart for its $23,000 in revenue in their latest quarter down from $189,000 just a few quarters ago—wow, their product must be really great! Even funnier is their yearly results—revenue of $350k vs. $4 million a few years back. Or before this miraculous article, EDEN was a $3 million company that was forced to do a 1-3 reverse split just two months ago in order to stay listed on the Nasdaq

But I shorted 1,000 shares at $2.55–that’s all I could find, trust me, I wish I could borrow 50k–because I prefer to go to the heart of the matter, the fact that EDEN SOLD OFF THIS “REVOLUTIONARY” TECHNOLOGY AS IS DETAILED IN THEIR ANNUAL REPORT!

From that beautiful annual report, filed on March 28, 2008:

“On February 28, 2007, under the terms of the Asset Purchase Agreement, we sold our Harpin Protein Technology to PHC for $1,396,824 in cash, net of transaction costs incurred after January 1, 2007 totaling $103,176, a promissory note in the principal amount of $700,751 payable on December 31, 2007 and the assumption by PHC of certain of the liabilities relating to or arising out of our Harpin Protein Technology…”

That’s right, EDEN isn’t even in the home and garden business anymore, they’re just a licensee! Gotta quote some more of this fine work of literature  

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On CNOA, CNBC Aids And Abets Penny Stock Promoters

Let me start by saying I have no problem whatsoever with penny stock promotion—these tiny / failing / fraudulent companies need all the exposure / hype they can get or else they’ll never raise any capital and fail / be exposed as the frauds that they are soon rather than later. But I do take offense when entertainment outlets like CNBC try to pass themselves off as credible researchers. As I’ve posted HERE and HERE, their bumbling has hurt too many investors and they’ve helped make people afraid of penny stocks—which I cannot permit.

Now, one of their wannabe journalists / entertainers, Sri Jegarajah, has written the single most naïve penny stock article I’ve ever read, “Wild About Rice” in which Sri mistakes paid-for stock promotion for credible research forcing me to explain the rules of the game to all the poor schmucks who mistakenly view CNBC as a credible source.

Besides quoting CNOA’s CEO (we all know how useless that is, what’s he gonna admit the company’s a pump and dump scheme?), and a Seeking Alpha article—whose writers are no more qualified than bums begging for change on the street, Sri proudly quotes Source Advisors, forgetting (not realizing?) to mention they’ve been paid $25,000 “by a third party” (pump and dumper, cough, cough) to publish their BS report. And, as if to repent for his sins, Sri closes out the article quoting Patrick Murphy of Murphy Analytics who was only paid $1,000 for his efforts (scroll down to the bottom and be better than Sri, aka read the disclaimer).  

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