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July 28, 2005
Blog comments about small cap stocks, Thurs., July 28, 2005, 3:33 PM
I received the following letter from an anonymous reader, which has upset me.
In fact, I am having a heck of a time getting psyched up to return to this blog with the passion I had previously. So, when I get this kind of letter, amidst all the numerous spam and virus-laden mail, and spam comments to the blog, it makes me think I have to cut off all mail, charge a premium, or just withdraw altogether.
For sure, it makes me truly wonder why I write a free blog.
"Dear Bill, I phoned Stelco for information on my shares, they said in the restructing plan my 100 shares would give me 1 share back then I could purchase new shares at one third the cost that they start trading under the new formula. It sounds like warrants that they give me would not help me. This restructuring is only a proposal but maybe it is better to sell them at .85 aprox. Then wait, what is your feeling?
From (name withheld by me)
P.S. I guess this gamble didn't pay off."
I wrote back:
"In response to your direct query early March 7 (i.e., "Do you think I should sell Stelco earlier if equity markets are going down?"), I replied as per the e-mail copy that follows.
That was pre-open March 7, when Stelco last traded (March 4) at $3.50. The stock later traded up to $4.50, giving you an incredible opportunity to take a substantial profit after receiving my letter, since you paid about $2.00.
Sorry Ken, but I did the best I could to explain what I would have done (for myself), had I been trading Stelco.
The fact you bought it, and held it, was 100 pct of your accord. You decided to ask me for specific opinions, after I wrote in my blog that I don't do that. You persisted. I responded, unfortunately.
It won't happen again.
I won't comment any further, other than to say that I hold no positions in Stelco, and have never held any in the past. I wrote several times about this company for other reasons, as I clearly explained in my blog.
Your letter today will require me to once again make a statement in my blog that I refuse to respond to specific small cap queries from readers.
Regards, /Bill"
-----Original Message-----
From: Bill Cara
Sent: March 7, 2005 8:16 AM
To: (Name Withheld)
Subject: RE: RE:
"I think the price swings in Stelco in the next couple months will be extreme. The insiders on Bay Street who hold a lot of stock will want to dump it at a profit, so I foresee some (paid-off) positive reports in the media to help them do that. In the next upswing of prices, it's probably a good time to get out.
To win in markets, you have to buy in after a pullback (as you did) and sell out when the stocks are under promotion. You have to think like a wholesaler, and act that way. Stocks are just merchandise. They go up and down in price depending on promotion.
Over the years, though, the cycle bottoms and tops get higher (called an uptrend) when the corporation is truly out-performing its peers financially/operationally, which is important to long-term investors.
Have a good day, /Bill"
In summary, if I have a single reader who believes that I promote trading in small cap stocks, or that I have "promoted" a small cap stock, or that I promote anything other than what I believe to be meaningful strategies and tactics for trading in liquid capital markets, then please write me a letter, and I'll respond directly.
The fact is I do not advocate small cap trading, and I don't promote anything.
I am really irked to continue to receive letters asking for my opinions on any particular stock. Moreover, I think my readers know it.
Like I say; any reply on my part won't happen again.
For the rest of you, you will have to bear with me as losing three parents in three weeks this month is not something anybody can deal with easily.
Posted by Posted by Bill Cara on July 28, 2005 03:33:28 PM | Category: Cara re: Cara
Discourse
Dear Mr. Cara,
I can easily understand why you are upset with the situation dealt with in this section .
You have been through a lot and I do not think
that anyone could reasonably blame you if you stopped blogging.
Please note that many people derive pleasure from your freely given and talented work, and would miss it.
There is so little intelligent commentary on financial subjects.
Why does it seem that the good blogs like this one, are driven out by inconsiderate people,
and those of a far different type thrive?
LP
Posted by: LPettine at July 28, 2005 9:38 PM [link]
dear bill
after reading about your losses and what you went thru, I find I am going through the same situation..My 93 yearold mother died yesterday and my 97 year old father is in the hospital for the secondtime in ten days...
I found great strength from the way you handled your situation, and little did i realize i would soon be in the same situation..
Please do not let this incident make you stop posting,I find your integrity so appealing and would be deeply saddened if you stopped..
Wishing you strength and peace.
monroe bernold
Posted by: monroe bernold at July 28, 2005 6:58 PM [link]