Thinking a lot about this stock

[kingofspades]

Hey guys,

I got hit by a drunk driver a couple years back and through the lawsuit got a decent settlement. I decided that since I was doing just fine without the money I would treat it as if I didnt even have it and gamble on some very speculative Bio-tech stocks. To make the story short, I got very lucky and made about 300% on what I invested. I have sold all the stocks and right now have the money sitting in a money market except about 5 grand which I invested in this stock I want to talk about.

The Ticker is NTRZ.OB, and I bought it at $4.00/share, and it is now down to 53 cents/share. However, even though it is down so much I have never felt so good about a stock before. They specialize in rice-bran, and have been spending large amounts of their cash to buy out multiple plants, which is why (I believe) their quarter results have been down in the last couple years. I won't pretend to be an expert in trading, I just follow stories I like and make the investment. I hope some of you who are more experienced could advise me on this stock because I am thinking of (while the stock is so low now), investing a large portion of my money I made on the others into this company. I can see big things for them in the future once they get the plants up and running, and I hope you guys will take time to read the companies story and give me some input.

I'm all set financially and have a lot of money in conservative investments so I'm just looking to be a part of something that could be big and maybe have some fun. Let me know,

Thanks,

KOS

[Dad]

Originally Posted by kingofspades

Hey guys,

I got hit by a drunk driver a couple years back and through the lawsuit got a decent settlement. I decided that since I was doing just fine without the money I would treat it as if I didnt even have it and gamble on some very speculative Bio-tech stocks. To make the story short, I got very lucky and made about 300% on what I invested. I have sold all the stocks and right now have the money sitting in a money market except about 5 grand which I invested in this stock I want to talk about.

The Ticker is NTRZ.OB, and I bought it at $4.00/share, and it is now down to 53 cents/share. However, even though it is down so much I have never felt so good about a stock before. They specialize in rice-bran, and have been spending large amounts of their cash to buy out multiple plants, which is why (I believe) their quarter results have been down in the last couple years. I won't pretend to be an expert in trading, I just follow stories I like and make the investment. I hope some of you who are more experienced could advise me on this stock because I am thinking of (while the stock is so low now), investing a large portion of my money I made on the others into this company. I can see big things for them in the future once they get the plants up and running, and I hope you guys will take time to read the companies story and give me some input.

I'm all set financially and have a lot of money in conservative investments so I'm just looking to be a part of something that could be big and maybe have some fun. Let me know,

Thanks,

KOS

You're confusing the company with the stock price.

The company does something, makes something, has this or that prospect, etc. Maybe this works, maybe it doesn't, only the future will tell.

The stock price, on the other hand, is dictated by the law of supply and demand. The fact that yuor purchase is now worth about 13% of what yuo paid for it says that there's lots for sale and no takers - so lots of supply and no demand. Possibly yuo see something the market, collectively, has missed, but probably not. My guess is yuo bought the "story,"on a tip, and it was, unfortunately, near the all-time high price for this stock back in May of last year. I think, also unfortunately, that yuo're looking for encouragement to hang on to this thing.

The only thing I can think of that would be worse than the original 86%+ erosion in yuor investment would be adding to it. My advice would be to either sell this now while yuo can still get anything for it, or maybe since it's down so far just hang on since yuo've little left to lose. But the absolute worst thing yuo could do is add to this loser. Add to an investment that's doing well, not one giving off a death rattle.

Not trying to be harsh, just telling yuo what 20+ years of trading and markets have taught me...the hard way.

By the way, the current quote as I write this 46 cents, not 53, so it's down another 13%+ from the 53 cents.

[kingofspades]

K thanks Dad, you are not being harsh, just answering my question. I guess I wont add but I'm definitely going to leave what I have in there just because I dont care if I lose the money.

Thanks a lot,

KOS

[Dad]

Originally Posted by kingofspades

K thanks Dad, you are not being harsh, just answering my question. I guess I wont add but I'm definitely going to leave what I have in there just because I dont care if I lose the money.

Thanks a lot,

KOS

I think that's a good choice. Whether you risk the remaining balance is an individual choice - no right or wrong to it. I do honestly think adding to it, however, is a bad idea.

Hope it works out, and again, didn't mean to be harsh.

[kingofspades]

Hey dad,

I took your advice and didn't buy it but I'll tell you what I did do, I left most of the money in a money market, and invested a couple g's in Freddy mac. I like the stock because with them being big mortgage lenders and the US being in such a big mortgage crisis, I think the government has to help them out. Its speculative but I think it was a better choice, what do you think?

[Dad]

King,

Again, I think yuo're looking at the company, govt., etc, and not the stock.

My personal opinion is that the the market as a whole, and financials in particular, have more room to fall. The only thing that's kept the financials from dropping to an even greater degree is this stupid ban Cox, the head of the SEC, put on short-selling the stocks.

Of course, they are still going down becuase all yuo need are fewer buyers than sellers, even if there's no naked short-selling. Lehman was down 12.9%, Citi tanked 6.24%, and on and on - that's just today. I know a bunch of pros that are just waiting for that ban to get lifted in order to hammer the financials - at least that's what they say now.

Ok, sorry for the rant. As to FRE, yes, the govt. has made it clear they won't let them fail outright. That, however, does not mean the market sees these as bargains right now with great future prospects. FRE was down 9.24% today alone, trading 5.91 bid, at 5.97. This is down from over $67.00 a year ago. Remember, there's a reason they're so down in price and continuing to fall. Betting against the collective judgement of the market is saying yuo know something the market as a whole does not. With all the people who look at these stocks and trade them, do yuo think that's likely for any one individual?

On the idea that there's little downside after a 92% loss in price, and it's now "cheap," I suppose yuo could play it a a gamble, I wouldn't, but...
Just realize it can stay down here a l-o-n-g time, and in the meantime that capital is tied up and can't be used for better investments and is being eaten by inflation.

Just my 2 cents, and I could have a different opinion tomorrow, but now, that's how I see it as I type this.

[mung]

Fannie & Freddie both down again this morning. They might be in the middle of a mess in which no one knows the magnitude!

[kingofspades]

Thanks for the response Dad, and I would take your advice because you are very knowledgeable. However, as I stated before, I have been lucky enough to do pretty well financially, and so I give myself a little money to fool around with and make speculative choices. It seems a win-win because if I lose this money tomorrow, its okay and has no significant impact on my life, however, if I do well then it was a fun and rewarding experience.

You seem like a very conservative investor and I am the same way, which is about 98% of my portfolio. But I think you would agree that life is more enjoyable when you take risks (not risk all), and thats what 2% of my portfolio is for. I know you just have my back though, and I appreciate that, a lot. So thanks a lot bro,

KOS

[Dad]

Originally Posted by kingofspades

Thanks for the response Dad, and I would take your advice because you are very knowledgeable. However, as I stated before, I have been lucky enough to do pretty well financially, and so I give myself a little money to fool around with and make speculative choices. It seems a win-win because if I lose this money tomorrow, its okay and has no significant impact on my life, however, if I do well then it was a fun and rewarding experience.

You seem like a very conservative investor and I am the same way, which is about 98% of my portfolio. But I think you would agree that life is more enjoyable when you take risks (not risk all), and thats what 2% of my portfolio is for. I know you just have my back though, and I appreciate that, a lot. So thanks a lot bro,

KOS

Happy to help - such as it is.

Please realize that my comments come from the perpective of trader, not investor. I don't invest in anything - my holding time is somwhere between 2 seconds and less than a day. I'm certainly not saying this is the only way, or the best way to approach the markets, just one way out of many that can (or cannot) work at times.

If all yuo've got is 2% of yuor portolio in flyers like this, then I'd say yuo're managing yuor money very well - better than the vast majority!

I enjoy thinking about things, so hope I'm not interpreted as being harsh or negative. Like I've said, I could change my mind in the next second...and do!

Hope things work well for yuo!

[kingofspades]

Hey Dad,

Dont worry I havent taken anything negatively or harsh, you have been a great help. I have always been fascinated by day traders but it definitely takes a certain person to do it. Just out of curiosity, how have you been doing with the economy the way it is?