2/1/2012

Should you short term trade in the Penny Stock market?  Statistics say yes, indicating that this is a short term traders market; not a long term investor's market.  Please note:  As of January 30, 2012, 96.1% of our 126 initiate coverage research reports share prices have gone up 94.3% within 23 average days.  We believe this price appreciation reflects dollars spent in a campaign, short term trading activity, and our research credibility. 86.0% of all stocks increased their volume while 82.9% reached their highest price within 30 days; 17.1% went up by more than 100%.  Clearly this seems to us to be a short term trader's market.  Sharp traders take their profits in short periods of time.  The trading risks, however, are considerable.

Should you invest long term in the penny stock market?  Statistics say no and indicate this is not a long term investor's market.  What goes up normally must go down.  Unless you believe a company will be adequately financed long term for about 5 years, it is highly risky to invest for the long term, especially in a recession.  When investor awareness campaigns terminate, the majority of share prices historically go down; primarily from profit taking and lack of dollars being spent in a given campaign.  Since 2002, we understand that there have been tens of thousands of campaigns. 

Our 126 company initiate coverage and 3 update reports statistics indicate that 85.3% of all of our stocks are currently trading at 34.1% below initiate coverage prices.  We are uncertain whether these prices are better or worse than the industry average; we suspect better.  Many of the tens of thousands of companies have gone out of business; we do not know the exact number.  The conclusion, however, is clear.  It is highly risky to invest long term in any company in the Penny Stock market.

On March 1, 2009, we began recording our email marketing distribution and performance statistics (March 2009 – January 30, 2012).

STOCK PERFORMANCE:

1.  Initiated coverage on 126 companies + Updates on 3 companies.
2.  96.1% of all stocks researched went up by 94.3%
3.  17.1% of all stocks more than doubled in price
4.  82.9% of all stocks reached their high price within 30 days.
5.  23 Average Days to reach their high price.
6.  86.0% of all stocks increased their volume.

The SEC, FINRA  and other regulatory agencies are rightly concerned about the excesses in the investment awareness industry.  There are no insurance policies provided by Wall Street research firms including our commercial advertisement documents.  FNME fell about 99.5%.  Ford Motors fell about 96%.  We are not aware if there were investor complaints on these issues.  We are aware that there have been complaints in the penny stock market when stock prices drop significantly.  We have gone to great lengths explaining the risks of investing in the penny stock market.  While 96.3% of our stocks have gone up 95.2%, these price increases are in the short term.  Long term, 81.6% of our stocks have dropped 44% after our initiate coverage reports.  These results point to the fact that had traders invested short term they might have done better with their investment decision, rather than investing long term.  Each trader is responsible for his/her decisions.  Our reports are for general information only.We have 4 disclaimers in our reports:  The SEC filing outlining risks if published, short disclaimer, full disclaimer and our price target disclaimer.  These disclaimers clearly state the risks of investing long term in our client companies should these companies be unable to raise cash.  They advise the investor to do their own research, not rely on our price targets, and understand the risks in the penny stock market.We believe our reports (commercial advertisements) are based on academically defensible, solid in depth securities analysis.  We believe this level of research is not available in the investor awareness markets.  We are the only firm in our industry to forecast each company for 5 years via their income statement, balance sheet and cash flow statements in three cases (Optimistic, Base and Pessimistic), most assuming capital raised, creating our Cohen Price TargetTM that assumes capital is raised. While any regulatory agency can inquire about a given company or campaign at any time, we believe our commercial advertisement documents serve as the basis for corporate expectations and corporate communications for all investor awareness, IR and PR campaigns.   The Investor Awareness industry functions primarily on short term price activity.  The Cohen Price TargetTM assumes that companies raise the necessary capital to meet our projected price targets.  These price targets are theoretical and highly risky because smaller companies must raise cash to reach our outside analyst's forecasted price targets.  If capital is not raised for most of our client companies, our price targets, short term and long term might not be reached.  Our disclaimers state that these price targets are academic theory and should not be relied upon.  Price performance can be heavily influenced by the structure and amount of money spent on each campaign.  In addition, we have no control over other market factors influencing market prices.Our firm's policy is not to be involved in any stock trading activities or programs of other investor awareness firms, consultants, large shareholders, companies or any investors. 

(See our Disclaimer on our website and in our reports).