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Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction

Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And ‘Are Likely To Cause Big Trouble

 

After all these years, the most famous investor in the world still believes that derivatives are financial weapons of mass destruction.  And you know what?  He is exactly right.  The next great global financial collapse that so many are warning about is nearly upon us, and when it arrives derivatives are going to play a starring role.  When many people hear the word “derivatives”, they tend to tune out because it is a word that sounds very complicated.  And without a doubt, derivatives can be enormously complex.  But what I try to do is to take complex subjects and break them down into simple terms.  At their core, derivatives represent nothing more than a legalized form of gambling.  A derivative is essentially a bet that something either will or will not happen in the future.  Ultimately, someone will win money and someone will lose money.  There are hundreds of trillions of dollars worth of these bets floating around out there, and one of these days this gigantic time bomb is going to go off and absolutely cripple the entire global financial system.

Back in 2002, legendary investor Warren Buffett shared the following thoughts about derivatives with shareholders of Berkshire Hathaway…

The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so
far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.

Those words turned out to be quite prophetic.  Derivatives have definitely multiplied in variety and number since that time, and it has become abundantly clear how toxic they are.  Derivatives played a substantial role in the financial meltdown of 2008, but we still haven’t learned our lessons.  Today, the derivatives bubble is even larger than it was just before the last financial crisis, and it could absolutely devastate the global financial system at any time.

During one recent interview, Buffett was asked if he is still convinced that derivatives are “weapons of mass destruction”.  He told the interviewer that he believes that they are, and that “at some point, they are likely to cause big trouble”…

Thirteen years after describing derivatives as “weapons of mass destruction” Warren Buffett has reaffirmed his view that they pose a threat to the global economy and financial markets.

In an interview with Chanticleer this week, Buffett said that “at some point they are likely to cause big trouble“.

“Derivatives, lend themselves to huge amounts of speculation,” he said.

Most of the time, the big banks that do most of the trading in these derivatives do very well.  They use extremely sophisticated computer algorithms that help them come out on the winning end of these bets most of the time.

But when there is some sort of unforeseen event that suddenly causes a massive shift in the marketplace, that can cause tremendous problems.  This is something that Buffett discussed during his recent interview

“The problem arises when there is a discontinuity in the market for some reason or another.

“When the markets closed like it was for a few days after 9/11 or in World War I the market was closed for four or five months – anything that disrupts the continuity of the market when you have trillions of dollars of nominal amounts outstanding and no ability to settle up and who knows what happens when the market reopens,” he said.

So if the markets behave fairly calmly and predictably, the derivatives bubble probably will not burst.

But no balancing act of this nature ever lasts forever.  Just remember what happened in 2008.  Lehman Brothers collapsed and then the financial system virtually froze up.  According to Forbes, at that time almost everyone was afraid to deal with the big banks because nobody was quite sure how much exposure they had to these risky derivatives…

Fast forward to the financial meltdown of 2008 and what do we see? America again was celebrating. The economy was booming. Everyone seemed to be getting wealthier, even though the warning signs were everywhere: too much borrowing, foolish investments, greedy banks, regulators asleep at the wheel, politicians eager to promote home-ownership for those who couldn’t afford it, and distinguished analysts openly predicting this could only end badly. And then, when Lehman Bros fell, the financial system froze and world economy almost collapsed. Why?

The root cause wasn’t just the reckless lending and the excessive risk taking. The problem at the core was a lack of transparency. After Lehman’s collapse, no one could understand any particular bank’s risks from derivative trading and so no bank wanted to lend to or trade with any other bank. Because all the big banks’ had been involved to an unknown degree in risky derivative trading, no one could tell whether any particular financial institution might suddenly implode.

After the crisis, we were promised that something would be done about the “too big to fail” problem.

But instead, the problem of “too big to fail” is now larger than ever.

Since the last financial crisis, the four largest banks in the country have gotten approximately 40 percent larger.  Today, the five largest banks account for approximately 42 percent of all loans in the United States, and the six largest banks account for approximately 67 percent of all assets in our financial system.  Without those banks, we would not have much of an economy left at all.

Meanwhile, smaller banks have been going out of business or have been swallowed up by the big banks at a staggering rate.  Incredibly, there are 1,400 fewer small banks in operation today than there were when the last financial crisis erupted.

So we cannot afford for these “too big to fail” banks to actually fail.  Even the failure of a single one would cause a national financial nightmare.  The “too big to fail” banks that I am talking about are JPMorgan Chase, Citibank, Goldman Sachs, Bank of America, Morgan Stanley and Wells Fargo.  When you total up the exposure to derivatives that all of them currently have, it comes to a grand total of more than 278 trillion dollars.  But when you total up all of the assets of all six banks combined, it only comes to a grand total of about 9.8 trillion dollars.  In other words, the “too big to fail” banks have exposure to derivatives that is more than 28 times the size of their total assets.

I have shared the following numbers with my readers before, but it is absolutely crucial that we all understand how exceedingly vulnerable our financial system really is.  These numbers come directly from the OCC’s most recent quarterly report (see Table 2), and they reveal a recklessness that is almost beyond words…

JPMorgan Chase

Total Assets: $2,573,126,000,000 (about 2.6 trillion dollars)

Total Exposure To Derivatives: $63,600,246,000,000 (more than 63 trillion dollars)

Citibank

Total Assets: $1,842,530,000,000 (more than 1.8 trillion dollars)

Total Exposure To Derivatives: $59,951,603,000,000 (more than 59 trillion dollars)

Goldman Sachs

Total Assets: $856,301,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $57,312,558,000,000 (more than 57 trillion dollars)

Bank Of America

Total Assets: $2,106,796,000,000 (a little bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $54,224,084,000,000 (more than 54 trillion dollars)

Morgan Stanley

Total Assets: $801,382,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $38,546,879,000,000 (more than 38 trillion dollars)

Wells Fargo

Total Assets: $1,687,155,000,000 (about 1.7 trillion dollars)

Total Exposure To Derivatives: $5,302,422,000,000 (more than 5 trillion dollars)

Since the United States was first established, the U.S. government has run up a total debt of a bit more than 18 trillion dollars.  It is the biggest mountain of debt in the history of the planet, and it has grown so large that it is literally impossible for us to pay it off at this point.

But the top five banks in the list above each have exposure to derivatives that is more than twice the size of the national debt, and several of them have exposure to derivatives that is more than three times the size of the national debt.

That is why I keep saying that there will not be enough money in the entire world to bail everyone out when this derivatives bubble finally implodes.

Warren Buffett is entirely correct about derivatives – they truly are weapons of mass destruction that could destroy the entire global financial system at any time.

So as we move into the second half of this year and beyond, you will want to watch for terms like “derivatives crisis” or “derivatives crash” in news reports.  When derivatives start making front page news, that will be a really, really bad sign.

Our financial system has been transformed into the largest casino in the history of the planet.  For the moment, the roulette wheels are still spinning and everyone is happy.  But sooner or later, a “black swan event” will happen that nobody expected, and then all hell will break loose.

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Learn how to make money from penny stocks! Penny Stock Tips

Be a wise penny stock investor

With beginning and experienced investors alike still feeling the effects of an economic recession, the search is on for a responsible, low-risk way to invest in future assets. Enter the penny stock, defined by the Securities and Exchange Commission (SEC) as any stock currently trading at less than five dollars. Because penny stocks are so cheap, they have the potential to massively multiply an investment if the stock takes off; the price can easily rise by a factor of five, 10 or even more. Following these tips will help you successfully invest in these low-priced stocks.

Choose Your Broker. Many stockbrokers are not especially fond of penny stock trading, so they charge higher commissions for buying and selling cheap stocks. Even for successful investors, these fees can really eat away at profits. Worse yet, if you take a loss, that extra commission could push you right out of the market. Make sure you work with a broker who is willing to help, not hinder.

Be Informed. Although penny stocks are unique in some ways, investing in them is fundamentally no different from investing in more expensive stocks. Take time to learn as much as you can about general stock trading before delving into the specifics of penny stocks. That knowledge will form the foundation of your investment success.

Pick Listed Stocks. Even though they are very cheap, many penny stocks are listed on the NYSE, AMEX or NASDAQ. The major exchanges employ certain financial criteria when deciding which stocks to list, so an investor who chooses listed stocks knows he is investing in companies that are financially sound. Listed stocks are not guaranteed to succeed, nor are unlisted stocks guaranteed to fail; nevertheless, sticking with listed stocks is by far the safer option.

Research Thoroughly. Many investors fail to take basic information such as company earnings when buying stock. It is easy to see shares of stock as abstract quantities, not shares of a real company that does real business somewhere in America. Instead of falling into this trap, look up basic financial information on a company before choosing to buy its stock. Companies with solid revenue streams are more likely to succeed in the market.

Market Trends and Uniqueness. Small businesses that really succeed are usually in some hot industry, where many investors are paying attention. In addition, having a unique product or a great story tends to improve a company’s chances of rapid growth. If a company is in a hot industry, brings in solid revenue, and has some unique aspects, its stock is likely to take off in the near future.

Diversify. Because penny stocks are so cheap, it is fairly easy to invest in several different stocks at a time without tying up a lot of capital. Investing in multiple companies means you stand to benefit if any one of them has a run of success. There are no guarantees for anyone in the stock market, and certainly not for penny stock investors. Having a diverse portfolio, then, is one of the best ways to increase your odds of success.

Be a Skeptic. Because of their low prices, penny stocks are very vulnerable to price manipulation. Con artists may spread false rumors about a certain company to encourage inexperienced investors to buy, thus driving the price up, then sell their own shares to make a quick profit. Conversely, some schemes encourage investors to sell off their shares, then buy them up for literal pennies when the price hits rock bottom. The best way to avoid being caught in one of these schemes is to corroborate your tips as much as possible. If several independent sources say that a particular stock is a good buy, odds are that it really is a good buy. If just one source says to invest in a certain penny stock, move on to a safer investment.

Keep Cool. It is very easy for an investor who runs into trouble to start investing recklessly, hoping to make back his losses. It is even easier to get excited after a few winning trades, become overly aggressive, and lose it all on a few ill-advised investments. Penny stocks are volatile; to succeed, you need to be steadfast. Focus on making sound investments, and in the long run, you will reap the rewards.

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Summer Strategy for Penny Stocks

Summer is always slower when it comes to penny stocks

Summer is here. This is where you have to be extra picky with the penny stocks you get in. You also have to be very alert. I usually limit the amount I put into penny stocks summer months. It is a lot harder to make money. January through March are usually the hottest months. Those months are the easiest to make money. In the summer volume dries up and companies seem to be more sneaky. So be alert. Watch the SEC filings, Watch the charts, and don’t be afraid to cut losses. Penny Stocks are streaky. You will go on winning streaks and losing streaks. During the losing streaks it is very important you learn how to cut losses. I have seen some traders win on 9 in a row and end up broke on 1 because they didn’t cut losses and kept averaging down over and over again and the stock kept falling. You need to learn to have a basic knowledge of charts. You need to learn to read SEC filings and find out what they mean. You need to learn to watch level 2. If you have questions about a stock jump on Google and ask those questions. Don’t just listen to what others say. Most cases it is the blind leading the blind. If you see VFIN show up on the ask showing only 10k shares and not going away that most likely isn’t someone shorting. Stop listening to people trying to pump the stock and jump on Google or youtube and find answers. You have to be able to act quickly in penny stocks. I have been riding high in a stock that seemed like it was going to go up forever and see one SEC filing crush the stock. If you don’t know how to read that SEC filing you will have to wait for the next day or until you can ask someone before you realize you should have gotten out. If you see something you don’t understand ask but also jump online on a major search engine and try to do your own research. That way you can ask a more direct question. I talk a lot about a team here and being a group and working together but it also requires effort on everyone’s end as well. I am usually an open book when it comes to SEC filings, charts and the L2 even if I am in the stock. It is easier for me to be direct and blunt through direct message or over the phone. I still want you to double check everything I say as well. Get in the habit of always double checking everything so you can be confident with your own decision making. Again summer months are difficult you want to get in the habit of taking profits earlier and learning some chart plays. Don’t be a sheep and just follow the crowd. Everyone wants a stock that goes from .01 to .10 but those are rare, and if you can find a stock that goes back and forth from .01 to .02 10 times you will make a lot more money playing that cause you can profit and reinvest those profits. This time of a year it is good to be creative with your profit taking. An example of this is finding a .0004x.0005 stock that has decent volume. Sit on both the Bid and the Ask. Lower the number of shares you are trying to buy on the bid and stack the ask when you want to buy more shares and then once someone sells you shares then add more to the bid and lower the shares you are trying to sell on the ask. This will encourage people to sell when you want shares and buy when you want to sell shares. While everyone else is trying to be greedy and hoping the .0004 will go to .01 you are making money flipping it for 20% at a time. I believe this summer is extremely important for everyone to learn how to trade and learn to take profits and cut losses. 2018, in my opinion, will be huge for Marijuana stocks. In August and September, you should be able to load up on marijuana stocks and see some huge profits with the states legalizing recreational use of marijuana in 2018. You want to have as much powder available to load up on these Marijuana stocks.

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Biostem U.S. Corp. HAIR

I’m on fire about Biostem U.S. Corp. (HAIR) today and the reason is in the ticker itself.

HAIR uses ethically harvested adult stem cells to super-charge balding scalps.

They say it’s virtually painless and you can do it on your lunch break.

You can imagine how much cash an outpatient cure for baldness would pull in!

And yet somehow HAIR is currently priced in the 20 cent range, so everyman traders like us still have a chance to see it on the ground floor.

See, HAIR is only now rolling its stem cell technique into hair transplant clinics in places like Orlando, Florida, where aging big shots want to stay young-looking forever.

HAIR will receive monthly revenue from each doctor who signs up.

Because they’re starting from near-zero here, every dollar moves the valuation needle.

And those first clinics just opened for stem cells a few weeks ago, so the inflection point here is as fresh as it gets!

Now that the wheels have finally started turning, HAIR could even become an attractive Big Biotech merger target.

After all, Propecia brings down $400 million a year for Merck.

And old Rogaine earned its maker $150 million a year back in the 90s.

The market is endless. Look for baldness cure online, 3 MILLION hits.

Just a few months ago, news that they’d found the cause of baldness drove the world wild.

A cure in five years? HAIR is already doing it!

HAIR is also turning heads as brokerage firms throw it cash for the privilege of getting their taste of this story before the Street catches on.

Elco Securities bought 20 million HAIR shares back in May at 25 cents apiece.

That’s a 65% premium over where HAIR was trading the day the deal was signed.

Remember, HAIR is now well under the $0.25 level so that position is still technically deep underwater.

Did the big boys at Elco get taken here or did they figure that $5 MILLION bet will be worth a lot more down the road?

All I know is that HAIR plans to use that cash to keep the lights on while its marketing team goes to work!

This board is stacked with top management from blue-chip corporations like Crocs.

Love or hate the shoes, Stephen Beck and Scott Crutchfield know how to build a multi-billion-dollar craze from the ground up, and they seem eager to do it again.

Bottom Line: HAIR just blasted out of the gate with a new revenue model and some of the biggest names in hair replacement on its team.

Smart players have gambled long green on this company and its technology.

Resources:
http://finance.yahoo.com/q?s=HAIR
http://www.google.com/finance?q=PINK%3AHAIR
http://ih.advfn.com/p.php?pid=squotesymbol=HAIR

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HYSR HyperSolar, Inc.

HyperSolar, Inc. (HYSR) was already looking tanned and rested..and now it’s made a breakthrough in the energy crisis.

HYSRs space-age science turns dirty water into the highest-end fuel of all, pure hydrogen.

Just a few minutes ago, they stunned the world with NEWS they’ve demonstrated the process in action!

They’ve promised a video of the entire experiment on their website. I can’t vouch for it yet though seems like too many traders had the same idea!

We suspected something special like this might be in the pipeline when HYSR finished its commercial prototype a few months ago.

Back then, HYSR surged 115% on THAT piece of news!

Now the chart is already rounding a nice curve to signal that it was done digesting that move and this new development could get the game rolling again!

So what’s all the excitement about HYSR being able to make cheap all-natural hydrogen in a plastic bag?

Things like fuel cells, power plants, and eco-friendly cars all use gobs of this stuff, but it’s murder to manufacture by conventional means.

But take another look at that plastic bag. There’s a special chemical in there that works a little like chlorophyll and yes, HYSR invented it.

Add it to water, shine a light on it, and it breaks up the water into hydrogen and cleans oxygen!

Yeah, HYSR not only makes fuel for a green world, it cleans the air at the same time.

Now don’t get stressed out that HYSR will use up all the water, either. When you burn hydrogen, it rains.

And the water doesn’t have to be fresh! Saltwater, industrial runoff, sewage in theory, HYSR can convert it all.

No wonder UC Santa Barbara is nosing around, hoping to help this technology along.

Heck, no wonder HYSR shares have been bouncing so much as traders try to figure out how much to pay!

This might be the ground floor of the future, so a penny either way isn’t huge.

And in the meantime, the ride will probably be fun, right?

There’s the bell! Get ready to trade!

Resources:
http://finance.yahoo.com/q/h?s=HYSR+Headlines
http://www.google.com/finance?q=PINK%3AHYSR
http://ih.advfn.com/p.php?pid=squotesymbol=hysr

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GMXR

Good Evening Trader! Archived from 2010

I hope that all of you got my alert earlier today on GMX Resources (GMXR)!

Those of you who did are most likely pretty darn happy right now!

That’s because GMXR ran off for a quick and easy 15% win right after I alerted it to you!

My earlier email told you about how I really like the huge short interest that is built up in GMXR, with over 10 million shares shorted according to shortsqueeze.com.

Looks like some of those shorts ran away crying this morning after a swath of big buying volume came in just before Noon EST!

After a quick run up that probably had those shorts running to find cover, GMXR held steadily above my alert price of $0.94 the rest of the afternoon.

And that gets me pretty excited about what’s possible as the week goes on in this little play!

Just look at GMXRs chart! The last time the stock was down at levels like this, we saw a monster short covering after the volume started pouring in!

I’m not saying that’s what is going to happen again, its just an interesting picture was shown to us from the historical chart!

So you better not write GMXR off for the rest of the week!

I’d bet the guys who did that back in February kicked themselves for a MONTH!

One day of green is nice, but numerous days are even better!

Let’s stick to watching this play and see what unfolds! I even picked up 10,000 shares at $0.96 to see what might happen! (Full disclosure: I reserve the right to sell these shares at any time, which could adversely affect the stock price)

And again, do your research on this one. You might love what I say, but don’t listen to me without thinking about this for yourself!

Congrats on getting your week off to a great start!

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FRCN lotto penny stock

If you want a thrill, now’s a good time to check back in on Firemans Contractors, Inc. (FRCN).

The company is a lotto penny stock. Currently trading at .0002

FRCN is that start-up in Texas started by a fireman who saw an all-American need.

Parking lots in Fort Worth take a lot of wear from all the gas-guzzlers driving in and out.

Not to mention the occasional tornado!

Doing the maintenance repainting the lines and patching the holes is the ultimate recession-resistant business.

So FRCN was born and grew into a multi-million-dollar enterprise!

As its 5-cent share price will tell you, FRCN hasn’t gotten too big for day-to-day traders to play.

But it’s over the hump and signing contract after contract after contract.

FRCN has started booking more revenue every quarter than most of us will see in years.

And this is before the afterburner of franchising kicks in!

FRCN stock chart

FRCN has officially opened the door to spinning out the Firemans Contractors name throughout Florida.

Each franchise will earn FRCN a $35,000 start-up fee plus 9% of all revenue, so the cash here might build fast.

Floridas huge and every driveway costs, what, about $4 a square foot, just to install?

FRCN has a pretty unbeatable plan to compete for the maintenance contracts on all that asphalt.

They give 1% of their revenue back to local fire departments!

You know how hard it is to say no to the firemen fund when they call?

Which maintenance firm would you rather go with, the one that supports firemen or the one that doesn’t?

It’s no wonder blue-chip companies like Microsoft and Bank of America have signed up with FRCN.

And it’s no wonder traders have jumped at the chance to get in on the ground floor here.

Talk about the ground floor! When FRCN bounces, it bounces big!

Take another look at that chart.

See that 4- to 5-week cycle that’s taken FRCN up well over 100% and back down all year long?

After Monday’s big drop it looks like these shares are itching for their next long ride into the sun.

If so, FRCN may not be quick get-rich playbut traders who get in now may make out OK.

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$BVTK Bravatek Solutions Inc. The real thing or just a penny stock scam?

(OTCMKTS: BVTK) Bravatek Solutions Inc.

 

Before we get started with my opinion on BVTK, understand everything I write here is just my opinion and is just for entertainment purposes. I don’t own any shares of BVTK I am not short on BVTK. Penny stocks are high-risk high-reward investments so only invest what you can afford to gamble with. Please read our disclaimer here.  I will do my best to detail out some of the pros and cons about BVTK to be as unbias as possible. Regardless of what I write there will always be those that disagree with what I say. Make sure you do your due diligence and make your own buying and selling decisions.

If you haven’t heard of BVTK, you may be living under a rock. They have one of the most passionate followings similar to that of ELED.  They are very active on Twitter, Ihub, and social media. I recently stirred up the pot a little on Twitter with some of the BVTK stock enthusiasts.   Here are some of the back and forths.

My twitter feed was being blown up by some of the bought Twitter accounts that are promoting BVTK, so I decided to have some fun with them. It started with me tweeting out this:

BTVK fake profile

Twitter handle @katerinaKennedy was pretending to be a hot female who had a passion for stocks. The truth is it was a bought account that had stolen the pic of an adult entertainment model named Veronika Black and cropped out the cleavage only showing the face in the twitter pic.  The army of BVTK Twitter accounts started on the attack and the fake Twitter account of @katerinaKennedy later blocked me to avoid having more people know that the profile was a fake.  Plenty of them started commenting with the #fakenews hashtag and calling me any names they could. After a few back and forths, BVTK ended up going up 30% that day but that bounce was short-lived, and just a couple weeks later it went from  .0035 a share down to .0004 share.

I had a new trader write me trying to pump BVTK, and so I decided to stir up the pot again.

BVTK fake profile 2

BVTK promoters/marketers have several Twitter accounts that they bought in bulk in help spread the word about BVTK.  I was giving them a hard time because they got lazy and didn’t delete the back history on these accounts. Accounts like these are created so one person can control several different accounts and make it look like several people are excited about a stock. The more excitement a stock appears to have the easier it is to draw in new investors.  After these tweets, the extremely passionate borderline crazy fans of BVTK came out.   Here is a screen shot of one the post.

 


I do admire the creativity. The person took the time to go through 3 years of my facebook photos find one where I ran an ugly sweater charity event for children, and then crop the picture and turn it into a meme.  I admire the passion and trying to discredit me may help some of the investors in BVTK ignore what I have to say.  So instead label this behavior as creepy or crazy we will just assume this person is extremely passionate.

So with all the fake Twitter accounts and all the pumping going on with BVTK you must be thinking that I am going to say it is a stock to avoid right?

You guessed wrong! I believe all these are a form of marketing. So many penny stock companies are dead and dull. They don’t have loyal and active followers. BVTK has a group of motivated and enthusiastic people spreading the word about that stock.  I believe this to be a great thing! BVTK is also doing an excellent job of targeting specific demographics.  They are targeting conservatives and Trump supporters. I think this is genius marketing. Trump shocked everyone and crushed Hillary Clinton to become the president. He did it by strategically targeting the right demographics( it also helped that Hillary was clueless).  BVTK is spreading stock awareness by doing the same thing. They are repeatedly shutting up negatively by calling people bashers and using the hashtag #fakenews. When people working together run into adversity or negative responses, they become stronger and more passionate.  You see that with BVTK. So all the pumping and fake profiles are great marketing.

Why are people excited about BVTK?

 

Bravatek Solutions, Inc. is a high technology security solutions provider which assists corporate entities, governments, and individuals, in protecting their organizations against errors, as well as physical and cyber attacks.

Encryption technology and the ability to protect against cyber attacks and hacking is one of the most important industries. It is an industry that will continue to have rapid growth.  The world is expanding exponentially with smart devices, smart phones, smart watches, Cars that drive themselves, cryptocurrency, and nanotechnology. All of which will require advanced protection from hacking. Companies that can offer superior protection and lock down huge corporate and Government contracts could end up being Trillion dollar companies. The potential is enormous! 

Bravatek had some notes come due in February, and that along with having a bloated share structure has caused the stock to suffer. A lot of investors believe that the notes could be close to being paid off. The notes and dilution caused the stock to plummet down to .0004 if that dilution is over then BVTK has a chance of going up a lot if more buying pressure comes in.  BVTK has been quiet for almost a year, and investors believe that it could become active here soon. These events could be perfect timing for BVTK. Not only do you have political email hacks fresh on everyone’s mind but just today there were several coordinated Cyber attacks worldwide!  The news of the attacks caused Bravatek’s share price to go up 70% in just a couple hours!

The Pros

  • Bravatek CEO rumored to be friends with Donald Trump
  • Bravatek Twitter account is active @bravatek
  • Bravatek CEO Dr. Thomas Cellucci rumored to have visited the white house the day before Donald Trump signed this executive order https://www.whitehouse.gov/the-press-office/2017/05/11/presidential-executive-order-strengthening-cybersecurity-federal
  • Dr. Thomas Cellucci wrote the book

    “A Guide to Innovative Public-Private Partnerships: Utilizing the Resources of the Private Sector for the Public Good”

  • Bravatek and Enterprise Sentinel formed a strong strategic alliance you can view how it works here http://www.esauth.com/attributes/how-it-works
  • Dr. Thomas Cellucci is the chairman and CEO of Cellucci Associates, Inc.
  • Dr. Thomas Cellucci is the Director of Eurasian Economic Club of Scientists
  • Dr. Cellucci is also the Director of California Molecular Electronics Corporation
  • Dr. Just recently spoke to NATO leaders at NCOIC event
  • CEO has a degree in Advance technologies from MIT
  • Rumored Government contracts in the works.
  • May be done diluting

 

The Cons

  • 10 billion Authorized shares. 3.5 Billion authorized shares.
  • Bravatek has a history of hurting its loyal shareholders with reverse splits.  Within the last year had a 2,500 to 1 reverse split. This action would be similar to taking $2,500 from a loyal shareholder and handing them $1 back.
  • Could still have dilution ahead with convertible notes and Diluting Market Makers like VNDM on the ask.
  • Company seems to have a difficult time staying current in its reporting
  • The company has a history of rumors and PRs that never get backed up by profit gained in past financial statements.

 

As of 05/12/2017, the chart of BVTK does look good. It could be ready for another breakout.

BVTK chart

 

Please feel free to comment and share this. Let me know what you think. Make your own buying decisions. I hope everyone who has shares in this stock can make some nice profit!

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Cocktail Stocks

Cocktail stocks

A lot of people love cocktail stocks. These are stocks that have a great sales pitch and something that can get an average investor exciting. In a way, most penny stocks are cocktail stocks. Most are glorified sales pitches to excite naive investors. A lot of these cocktail stocks get cult-like followings and seem to go up for some time. Some of the biggest cocktail penny stocks have been marijuana stocks.  You have popular companies like MJNA, VAPE, and Hemp. TRTC was another one that seemed only to go up. These companies ended up crashing pretty hard. There were other stocks like MINE and VPOR which did well. Marijuana stocks are very easy cocktail stocks. There are a lot of people wanting to jump on the bandwagon of buying these over-hyped stocks hoping to become rich.  So what are the next cocktail stocks?

Currently, ELED seems to be turning into a cocktail stock. Bitcoin could be considered a cocktail stock by some even though it is more of a commodity.

BVTK has a ton of passionate investors despite the company continuing to sell shares. Another potential cocktail stock is HWAL. We will watch and see if it ends up getting a lot of hype over the next couple months.

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Penny Stock reminder May

Just as a reminder also have a stop loss and exit plan. If you’re in a penny stock and it isn’t moving where you thought it was going to move cut your losses early. Don’t be foolish and keep buy “low”. In most case averaging down can crush you. Losers average down and winners average up. Hope and believe a stock will go up or recover don’t mean that is what actually will happen. 95% of people lose in the OTC because they rely too much on hope. Better to get out of penny stock with some money even if it is a loss than it is to watch yourself lose more and money each day hoping the stock has finally found a bottom. There is no bottom with most of these only pump and dumps, reverse splits, and authorized share increases. Learn to sell on the pump and move on.

Will be putting together an article today on recognizing pump and dumps. As most people that have been in this group awhile know almost all penny stocks are pump or dumps. You can’t directly tell a person that they are about to lose all their money because they got in at the wrong time. So the article will be on recognizing so of the wording pumpers use like “bashers” or talk about stocks being “cheapies” and one we have all heard “weak hands”. Now it takes very little skill to point to a penny stock and say it is a scam. Almost all are scams and crappy companies. It does take skill to be able to recognize when the stock is being pumped and still has momentum to go up or when a stock is being dumped and when you need to either avoid or sell as quickly as possible. I have certain things I look for and will be putting into the article, what are some of the things other experienced traders in the group look for?

Boon Ngiam What are your thoughts of names for known p&d peeps? These are usually the people with the highest followers or post counts.
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· Reply · April 17 at 11:32am

Travis Garlick
Travis Garlick If someone is pumping a penny stock they are pumping a penny stock. All penny stocks should be looked at as short term flips. Some same day and some over a few weeks or few months. Pay less attention to accounts or people who you think are pumping and more attention to who holds the notes and who holds restricted shares of the stock.

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