Quick Update

As always, be sure to read my disclosures / disclaimers below. Most notably, I do not encourage or recommend for anyone to follow my lead on any stocks listed here or otherwise, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article. Cheers.

A few months ago, I announced that I’d be cutting way back on my public writing and broadcasting. So far, so good. This is my first post in a long time…

…and as you all may have noticed, my absence hasn’t hurt any of my favorite stocks. In fact, they’ve continued to deliver outstanding returns. Since leaving for Europe back in June, the Russell 2000 has FALLEN 3%. Despite that, my top 3 positions are all up significantly — SMSI has DOUBLED, ZYXI has risen another ~33%, and TPCS has jumped about 40%.

My top 3 short ideas have also paid off since my departure, with the aforementioned Russell (IWM) down about 3%, NBEV down about 40% and BYND down about 15%.

In other words, those stocks didn’t rise or fall because I wrote about them — they rose or fell because they were/are undervalued or overvalued.

Nonetheless, perception is enough to create risk. So, if I talk about companies and they do what I expect, there will always be people who will think that it’s because of my talk — a.k.a. manipulation.

It’s a sad fact of this world, but a fact nonetheless. So, after 10 years of sharing my picks with the public, I decided it was best to play it safe (putting myself and my family first for once).

And yet my favorite companies have continued to perform well. Accordingly, those stocks have also continued to perform well.

In fact, they’ve have been doing better without me around!

FYI, I still participate in some research forums, but only as “just another participant”. Other than that, I have no affiliation with StoryTrading or any other research platform whatsoever.

That being said, I do encourage people to participate in forums where professionally-minded investors congregate. Dozens of you have learned my research techniques and work as teams in those forums (with great results).

Seeing that unfold has been perhaps the greatest reward for my 10 years of work. Long ago, someone taught me how to become a successful investor. I’m happy to have given that gift to others. Hopefully, they will spread the knowledge and keep it going.

Well, that’s about it. I just wanted to respond to the handful of people who have been wondering where I’ve been. Not everyone got the memo months ago.

For those hoping for some research, here’s an investing lesson for old time’s sake:

ZYXI announced an acceleration in order growth, from 65% in Q2 to 95% in Q3. Today, a Seeking Alpha article provided good analysis of the news. As a result, the stock hit a 52-week high of $13+, up from $3 at the beginning of the year.

Interestingly, you may have noticed that the CEO has been selling shares since the stock was at $4.65 earlier this year. That might not make sense, but it’s a very smart move for him — 100% of his wealth is in this stock. He should have a few million sitting elsewhere for diversification’s sake. For anyone interested, an SEC filing detailed his latest selling plans months ago. Even after he’s done selling (according to the filing, he’s mostly done), he’ll still own over 50% of the company.

The Bottom Line — I’ve said this a hundred times, but insider selling is NEVER an indication that anything is wrong with a stock. Does it SOMETIMES mean something is wrong? Yes… but most of the time, IT DOESN’T… and there’s NO WAY to tell the difference (unless you do the kind of deep research that I espouse).

That’s why I say that it’s not an “indicator”. By the way, I was taught this lesson by Peter Lynch in the early 90s, so this is nothing new or debatable… yet people STILL get spooked by it. Ditto for announcements of secondary offerings to accelerate a strong business (as I wrote about years ago).

STOP.

If you got spooked by RDCM’s offering years ago, you missed a three-month, 100% ride. Similarly, if you got spooked by ZYXI’s CEO selling in March, you missed a similar ride… and based on how the company is doing now, anyone who gets spooked now might get similarly punished (as the company clearly had a fantastic Q3 and is forecast to continue growing).

But that’s not a prediction. I don’t make those anymore. I just make investments… and as of right now, ZYXI is my second largest. But don’t read into that. Read my disclosures for details. That’s the world we live in.

Hope you’re all doing well. Cheers.

 

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Disclosures / Disclaimers: I am long SMSI, ZYXI, and TPCS. I am also short IWM. This is not a solicitation to buy, sell, or otherwise transact any stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article.

I am not a financial advisor. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this article.

I undertake no responsibility to update my disclosures and they may therefore be inaccurate thereafter.  Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are. All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.

I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article. The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

The primary purpose of this blog/forum is to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.

3 thoughts on “Quick Update

  1. Well there ya go. You have barely mentioned ZYXI and it’s up 400%!

    GAIA has been the biggest surprise to me. Investors really soured on this one and it seems unwarranted. The math tells me it’s a good buying opportunity here. Also like AEHR for a smaller speculative position.

    Thanks

    Liked by 1 person

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