2006 Cheap Stocks,
General Rant and Quarterly Market Review
Has Sprung - Finally
Quote of the day: Lord, help me be the person my dog thought
-- Any prior or current dog owner.
(GTE) AMEX @ $1.30
There is not much of note to say about Globetel, except for the obvious
decline in share price. I don’t see any
around and I don’t see any Internafta agreements for some 600
million US dollars. I don’t see any
either so I
imagine not much is going to reverse this stock from its slow and
Solid news and even solider bottom-line numbers would
While my cost basis is essentially free, my last average share price
was $2.39. I am not a real happy camper right
now but that’s
I still think Globetel is still on the up and up but it is probably
going to be a very slow ride.
The fun thing about penny stocks is PR’s can really move the
share price and serious $$ can be made. I don’t think
point is a stock that can be traded so it’s hold or fold.
Security (HISC.PK) @ .06
HISC’s quarterly results are out and I think they are about
$1500.00 to the good and no, I didn’t misplace a couple
From their quarterly statement:
Inc. (HISC) announced today that its financials for the first quarter
March 31, 2006 are now complete. The company shows a net profit
of $1,632 for the first three months of 2006, as
compared to a
($252,928) loss for the first three months of 2005. Gross profit
increased by 369% from $120,574 to
$565,238; for the same period
revenues were up 216% to $625,788 as compared to $197,937.
balance sheet shows
increased from $1,218,758 on March 31, 2005 to $5,212,650 as of March
31, 2006, an increase of 328%.
main product is
the Cyber Tracker and it has had some very good reviews. It is
following this company. They came out with a pink sheet
type PR stating they were moving some of their assets to
a shell on the
Inc. (HISC) is pleased to announce that they have established the
for the issuance of a stock dividend for all shareholders of
record as of May 30, 2006.
shareholders of record as of May 30, 2006 will receive 1 new share of
NASDAQ Bulletin Board Company for every 50 shares of HISC they own
as of the record date. Homeland
Integrated Security Systems
shareholders will maintain their stock ownership of HISC and will
receive a dividend
in the NASDAQ Bulletin Board Company.
will unveil the symbol of the NASDAQ Bulletin Board Company shortly
after the completion of the ActSoft acquisition. Homeland Integrated
Security Systems will remain a publicly
traded company trading under
the symbol HISC.PK.
Dividend is a
bonus for our
loyal shareholders. The dividend will give our shareholders ownership
in the new
Bulletin Board Company which we expect to start trading at
$0.50 per share," stated Frank Moody, President and
CEO of Homeland
Integrated Security Systems, Inc.
I have seen situations like this at least half a dozen times and I
don’t see anything to get overly excited about.
The question I have not seen answered is if assets are being
transferred to this unnamed OTCBB Company then
does that reduce the
intrinsic value of HISC by a like amount? In other words if HISC
transfers 2¢ worth of value from
its 6¢ share to this
company do you now have two shares, one worth 2¢ and one worth
4¢ ? I would kind of think
that is the case.
I am not holding my breath with this one either but I am holding enough
shares that the outright purchase of a new
truck with the proceeds
following a nice run-up is not out of the realm of possibility.
– When You Can Get It
Part of my long term strategy is the establishment of three dividend
reinvestment plans (DRIP’s) in taxable accounts.
capital gains are currently taxed at 15%, which makes after-tax
accounts attractive to me. I want to be
exposed to three areas
a very broad one (GE), banking (CBSS) and manufacturing (MAS)
I established my first DRIP plan in General Electric (GE) about three
years ago through Stock Bank of New York. This
was done through a
couple phone calls. It was very easy to set up. I did not have to have
a registered share in my
name to prove I was the owner. All that was
required was minimal paperwork.
My second DRIP plan is in Compass Bancshares (CBSS). This was fairly
easy to do as well. It was also done
through Stock Bank of New York. I
had to have a share registered in my name to begin the plan, which is
expected. I had no real trouble.
Then came MASCO (MAS) and
the Department of Homeland Security
Masco provides building materials for home construction. Any large
hardware, building supply company will more
than likely carry products
supplied by MASCO.
I did a little research and found that yes; I had to be the registered
owner of one share of MASCO to start a DRIP
plan. Stock Bank of New
York handles the transaction. No problem.
What follows is in more or less chronological order:
Buy One share Masco from Schwab
Call Schwab to buy Share Certificate issued to me in my name.
Call Schwab to find out why I have not received share certificate. They
have no record of my request. The guy was
very nice and put the request
Finally get share certificate and download paperwork from
Stock Bank of New York.
There is now a requirement to take the certificate to the bank and
prove to the bank that I am in fact myself,
whereupon they stamp a
piece of paper stating I am who I say I am.
I gather up all the paperwork and send to Stock Bank of New York.
4, Week 1
Receive a letter from Stock Bank of New York stating my share was
received and registered and thanks for
registering the share.
Where is the DRIP account and other DRIP paperwork I expected to
receive back? Not in the package.
I call Stock Bank of New York and the helpful person said there was a
mix-up and they would send the appropriate
4, Week 3
Open letter from Stock Bank of New York to find a form for redeeming my
Masco Share. I also get a dividend check
for 12 cents.
I call Stock Bank of New York again and rather sarcastically explain
that I still have not got the right forms and I don’t
dividend check for 12 cents. I want to reinvest the dividend. That is
after all the purpose of a dividend
The helpful person says she will send me the correct forms and adds
that I can also download them after first logging
in to my account.
??????? Why didn’t they tell me that in the first place?
I log in to download the forms and my password doesn’t seem
to work. After three tries my account is now locked.
I call Stock Bank of New York again and tell them my account is locked
and can they please send me the forms
anyway. They agree to send the
forms and unlock my account.
I will have to wait 7-10 days for a new password so I can access my
account containing one share of MASCO.
It occurs to me that this is rather pointless.
5, Week 4
Once again I get the wrong information. This time the letter contains
directions for transferring my one share of stock
to someone else.
Once again I call Stock Bank of New York and I am now pissed. When I
get someone on the phone I insist on talking
to an individual who
actually knows what a DRIP plan is. The young man says that yes, he
knows what a DRIP plan is
and how can he be of service.
I not very nicely recount my experience with Stock Bank of New York
incompetence in completing the simplest of
transactions and he very
nicely tells me that the correct forms are on the way.
I ask for his full name and that of his supervisor and guarantee that
if he actually fills the request correctly I will put in a
I did not mention what I might say if the request is screwed up again.
6, Week 2
I open the latest letter from Stock Bank of New York and surprise
surprise; it looks like they actually sent the correct
fill all the stuff out; enclose my two dividend checks for 12 cents
each and a check for $100.00. I also
send a cover letter explicitly
stating that this is for a DRIP plan and I wish to buy my first $100.00
of MASCO stock.
6, Week 4
I receive a rather thick envelope in the mail containing all my
original documentation plus a letter stating that they
(Stock Bank of
New York) are unable to process the transaction because I did not
supply my SSN on the back of one
of the forms and because of heightened
terrorism concerns, they did not feel there was adequate protection in
ensuring I was not going to use my @ 30.00 DRIP account to finance
I am getting livid. For starters, in how many places and on how many
forms does Stock Bank of New York contain my
SSN, including the current
MASCO DRIP forms? At least a dozen.
Now, where am I supposed to include my SSN again? Why it’s on
back of this letter sized card that gives no
indication there is
anything on the reverse side to fill out – like
Reverse’ or something logical like that.
I call Stock Bank of New York again just on general principles and say
WTF!! This is patently ridiculous! All this BS
over a lousy $30.00 DRIP
The very nice young lady is appropriately apologetic but says that due
to heightened homeland security concerns, all
new financial accounts
are thoroughly scrutinized and everything has to be checked and
I respond that look, we are not talking tens of thousands of dollars
here. We are talking about one lousy share of
stock and two 12 cent
dividend checks. Let’s use a little common sense.
I think about that a second and add that yes, it does make sense
considering this is the same institution that holds an
old man up
during a metal detector check at the airport. The guy has metal knees
and wears coveralls because it is
the easiest way for him to dress. The
‘Security’ guards insist on sending his shoes
x-ray machine and
then won’t help him put his shoes back on.
That’s his problem.
I then apologize for getting apoplectic and the lady assures me that if
the forms are filled out correctly the account will
be set up.
I recheck the paperwork, issue a new check and wait.
7, Week 2
My wife calls me to inform me we got another letter from Stock Bank of
New York. With some trepidation, I ask her to
open it. She says that it
looks like they are acknowledging the creation of a DRIP account and
are using the enclosed
$100.00 for the first share purchase.
That is all well and good but I am not going to personally believe it
until I see my first plan statement.
I am beginning to understand why in this new economy Service Is
Oil and Energy related commodities serve as my basis for shifting a bit
away from the value oriented strategy that
Served me so well last year.
My reasoning is pretty simple. Unless you are one of those late-night
conspiracy theorists, it seems fairly obvious that
what is driving up
commodity prices is demand.
Who is driving demand? Developing countries and emerging markets.
How to access emerging markets? Some good mutual funds and an ETF.
We’re talking returns up to and in excess of 20% last quarter
with what I view as minimal risk.
ADRE - my first ETF I bought at the beginning of the year for $122.00 a
share. It is currently trading @ $140.00 and
looks to go higher
considering its commodity and financial exposure.
FECAX, NBITX or NBISX, FISMX, FIEUX, TAVIX and ARTIX have been doing
quite nicely and are all either
international or Europe oriented.
Domestic funds I own have returned approximately half what the
international funds have been doing so far.
Healthcare related funds
(ICHCX, FSHCX) have not fared well at all. I think a shift out of them
at the six-month mark
might be appropriate.
The new allocation breaks down like this:
Sector – Health – 5%
Sector – Communications – 5%
Sector – Technology – 2%
Sector – Large Cap Intl ETF – 5%
Sector – DRIP Large Cap Stocks – 5%
I am calling the ETF and the DRIP plans Sectors because of their narrow
International Growth (Small, Medium and Large) – 40%
Domestic (Small, Medium and Large (emphasis on small and medium) 38%
My Guru Bob Brinker is content with being fully invested in the market.
He sees high energy prices as keeping
inflation in check. He is
broadening his portfolios using extended index funds.
If he is happy, I am happy. Hopefully his overall timing continues to
Bob has a newsletter that can be purchased from bobbrinker.com
He also has some excellent financial reading resources as well as some
very good movie picks. Might I recommend
Strictly Ballroom if you have
not seen it.