Monday, February 27, 2006


This is why you should read the "Comments" to these blogs.

From my February 1st, "A Plan for All Seasons" where I recommended AGT at 37c, currently 59c:

How do you find the stocks that you recommend?

Do you mean like Apollo Gold (AGT)? In this case, Don Wolanchuk suggested it as,

"gold stock to buy now....37c....agt.....nice runnup and 3 wave pull back...."

I looked at AGT, liked the chart, the price, the company and sector and bought it. The idea is to be constantly on the look-out for interesting ideas. As I have so often repeated on this blog, a good starting point is insider buying. It also pays to keep track of what smart guys like Wolanchuk and Dines are doing. The Internet is a great tool, access to unlimited information at your fingertips. And time, spending a lot of time looking, searching, reading and thinkin'. One last pointer: 99% all my stock ideas never make it to my portfolio. Doesn't matter as only the 1% that does is AGT, or an NNVC. Put your best players on the floor, in the field, or on the ice. Then sit back and enjoy the game.



Just a heads-up on these two stocks, ALNY and RNAI, each of which is up about 25% since recommended here three weeks ago. It's a good idea to go back and read why we bought into these names in the first place, so click on ALNY & RNAI.

This isn't to say it's time to sell, only that it's time to review our reasons for the trades.


Sunday, February 26, 2006


Our recent focus has been on a very small scale in terms of time, market cap and share price. PTSC ran from 0.26 to 0.72, +177%; FONR ran from 0.65 to 0.76, +17%; and DLGI ran from 0.28 to 0.38, +36%, all in a matter of a few days. If we increase both time frame and share price we get similarly stellar examples, three of our current favorites even in spite of their run-ups over the past few months are AVII, +245%; NVAX, +243%; and DSCO, +29%.

A few longer-term picks haven't worked, yet, but most are working, so let's add one more to the list, courtesy of our biotech specialist, Ilene.


Arrowhead Research specializes in developing cutting-edge, innovative products through its investment and majority ownership of a number of nanotech/biotech subsidiaries. Ownership of Arrowhead Research therefore gives shareholders exposure to a diverse basket of nano- and bio - technologies that may make important contributions to a variety of industries, including medical, energy and materials.

By funding the subsidiaries, Arrowhead Research owns a majority proportion of their Intellectual Property and the products that arise from their research and development. What's so brilliant about this strategy (and why we are so impressed with management) is that Arrowhead's funding comprises a small portion of the money needed for R&D, while U.S. government grants make up a much larger portion of the funding. Yet, Arrowhead retains a majority stake in the subsidiaries -- this arrangement is referred to by the company as "financial efficiency."

With a relatively small initial investment, Arrowhead has rights to the subsidiaries' Intellectual Property, and is able to capture a greater proportion of the future revenue streams generated from the research and development for which it has only paid a fraction of underlying costs.

Our primary focus will be on two of ARWR's biotechnology subsidiaries, Calando Pharmaceuticals and Insert Therapeutics. But before getting to these two promising developmental stage companies, we want to mention two other subsidiaries, Aonex and NanoPolaris.

NanoPolaris is a wholly owned subsidiary which has assembled a portfolio of Intellectual Property related to the development of Carbon Nanotubes from a number of prominent Universities, including Caltech, UCLA, Duke University and the University of Toronto. The company plans to provide a convenient "patent toolbox" to corporations in many industries for integrating nanotubes into their end products. The carbon nanotubes, with their unique electrical, mechanical and thermal properties, can be harnessed to improve many products, including tv displays, solar cells, semiconductor devices and medical products. They hope to "create a manufacturing revolution comparable to what plastics did for materials and silicon did for electronics," according to R. Bruce Stewart, Arrowhead's Chairman and CEO.

Another subsidiary, Aonex, is commercializing their unique process for fabricating semiconductor nanomaterials and applying their technology to next-generation solar cells and other optoelectronic devices. Recently, Aonex has been awarded a Phase I SBIR grant to advance a new class of improved solar cells. Aonex's proprietary process uses lighter weight substrates to create more efficient and powerful solar cells that are less costly to produce. These new "nano-enabled energy" technologies are generating substantial interest from industry and government, according to R. Bruce Stewart.

Arrowhead's Biotechnology Companies

ARWR's majority owned biotechnology companies, Calando Pharmaceuticals and Insert Therapeutics, are focused in far reaching areas of the biotech field, RNA-interference (RNAi) and Nanotech-delivery systems, respectively.

Both companies are using a novel Cyclodextrin-Containing Polymer system for drug delivery. Calando is using the system for delivering RNA to cells, and Insert is working on delivering chemotherapeutic agents. Cyclodextrin is a sugar molecule derivative that does not stimulate an immune response -- because the immune system does not recognize it as foreign. The cyclodextrin-containing polymers can be produced in ideal sizes for particular purposes.

Insert Therapeutics

Insert is using the cyclodextrin polymers to encapsulate a potent and toxic chemotherapy drug, camptothecin, to enhance it's delivery to cancer. Camptothecin is a water-insoluble alkaloid with potent activity against a broad spectrum of cancer types. It's poor solubility and unfavorable pharmacokinetics have thus far prevented it's commercialization.

On Feb. 9, Insert issued a press release noting that they submitted an IND to the FDA to initiate a Phase I clinical trial using IT-101, "a combination of its patented polymer technology, Cyclosert(TM), and the anti-cancer compound camptothecin, to treat patients with unresectable or metastatic solid tumors. The objectives of the Phase I clinical protocol submitted with the IND are to evaluate the safety, pharmacokinetics and tolerability of IT-101 in humans."

Readers who want more information on this exciting new technology should visit ARWR's website.

Calando Pharmaceuticals

Calando Pharmaceuticals was formed last year to develop and commercialize the proprietary technology licensed from California Institute of Technology and Insert Therapeutics and their own Intellectual Property related to RNA interference (RNAi). RNAi is a mechanism used within cells for silencing and regulating specific genes. The ability to selectively silence specific genes through RNAi is believed to hold exciting potential for treating numerous diseases.

Calando seeks to combine their targeted polymeric delivery systems and siRNA to create effective therapeutics agents to treat a variety of diseases. Earlier this month, Calando announced a collaboration with the National Cancer Institute (NCI) of the National Institutes of Health (NIH). With the NCI, Calando will focus on RNAi therapeutics to treat neuroblastoma (an incurable extracranial solid tumor in young children). As stated in the press release "a collaborative study by Caltech and Children's Hospital Los Angeles recently demonstrated that Calando's proprietary delivery technology can deliver short interfering RNA ("siRNA") to targeted cancer cells and inhibit tumor growth in mice by silencing the target gene.... All of the aspects of the project will involve the use of Calando's proprietary RNAi delivery technology that is based on a linear cyclodextrin-containing polymer designed to deliver nucleic acids such as siRNA."

In June 2005, Calando licensed their RNA delivery technology to another RNAi company, Benitec. The companies will combine their technologies to develop an RNAi therapeutic to treat the hepatitis-C virus infection (which represents a $4 billion/year potential market opportunity). Calando's RNA delivery technology combined with their expertise in RNAi has tremendous potential to result in numerous novel therapeutic agents for many human diseases.

For a more detailed discussion visit Calando's website.


We like ARWR for longer term buy and hold exposure to a diverse range of new technologies, a lottey ticket on the next great wave of scientific breakthroughs in Biotechnology and Nanotechnology. Not a bad place to park some money.

Friday, February 24, 2006

Bird Flu Conference

A company we hadn't heard of is presenting at The Bird Flu Summit next week. It's called Aethlon, and they are developing a "Hemopurifier," see explanation below. The stock, AEMD is at .53, it could move nicely if their presentation is well-received.

The Hemopurifier
Aethlon Medical has developed a patented extracorporeal device, known as the Hemopurifier™, to address the treatment of viral conditions that are either resistant or evolve resistance to drug and vaccine therapies. The Hemopurifier converges the established scientific principals of hollow-fiber dialysis and affinity chromatography with the discovery of affinity agents that selectively bind envelope viruses. The result is an affinity treatment cartridge that separates and captures circulating viruses, viral proteins, and toxins before the occurrence of cell and organ infection. The treatment goal is to reduce viral load burden without drug toxicity so that the patient's natural immunity can recover to wage an effective battle against viral infection. However, the mechanical nature of the Hemopurifier also allows it to be deployed in conjunction with other therapies including drugs and vaccines, if available. An additional benefit stems from treatment access, as the Hemopurifier has been designed for utilization in the global infrastructure of dialysis and continuous renal replacement machines already present in hospitals and clinics.

Scientific articles classify the Hemopurifier to be both an immunotherapy and fusion inhibitor treatment. The Food And Drug Administration (FDA) has indicated that the Hemopurifier will be treated as a Class III Medical Device in U.S. regulatory submissions. Pre-clinical human blood studies have documented the effectiveness of the Hemopurifier in capturing HIV (The AIDS Virus), HCV (Hepatitis-C), and Orthopox Viruses related to human Smallpox. The mechanism of capture has been shown to be via the polysaccharide chains that reside on the surface glycoproteins of envelope viruses. Since the polysaccharide portions of the viral glycoproteins are attached via normal host cell (functions not under control of the virus), they are highly invariant. Moreover, the high abundance of polysaccharides allows viruses to escape immune surveillance. Thus, while many viral proteins are highly variable in their primary structure, the polysaccharide chains are nearly invariant, allowing for the capture of all strains and clades of many viruses. In fact, lectin derived affinity agents immobilized within the Hemopurifier have been shown to inhibit the growth of all tested strains of HIV and can capture of inhibit the growth of other envelope viruses including SIV, FIV, HCV, Measles, Mumps, Influenza, Ebola, Marburg, and Orthopox viruses. Recent studies indicate that the Hemopurifier affinity agent is also able to capture Dengue hemorrhagic fever virus. In conclusion, the Hemopurifier has expansive therapeutic capabilities that address: global pandemics (HIV-AIDS); chronic infectious diseases (Hepatitis-C); naturally evolving pathogens; and pathogens weaponized for bioterrorism attacks against U.S. military and civilian populations.


Thursday, February 23, 2006

DSCO - update

Ilene has posted an update on DSCO over on David Gordon's Blog. Great work IB!.


Wednesday, February 22, 2006

PTSC - news

With PTSC up over 200% in less then a week, what's up? This may explain alot:

Patriot Scientific Announces Important Patent Licensing Agreement with Casio
Wednesday February 22, 9:30 am ET
Casio Joins HP as Second "System" Manufacturer to Recognize Need for Digital Hardware Manufacturers to Purchase License for MMP(TM) Core Microprocessor Technologies

Read the link and consider that this may be only the beginning for this stock.


Tuesday, February 21, 2006


Here we go again, DLGI, Data Logic International is currently bidding 27 cents, asking 28 cents. This is an $11M market cap company that has had a nice run of recent insider buying.

Here's the kicker, from earlier today:

Lojack (LOJN 24.45 +1.12) is catching a bid this morning on a strong earnings report. Ituran (ITRN) is a name we have profiled in the past as a sympathy play (see recent comment). We thought we'd at least bring DataLogic (Bulletin Board: DLGI.OB) to your attetnion. The co is a provider of GPS-based mobile asset tracking and secured mobile communications. The co recently announced that it directed the Tucson police to the exact location of a stolen vehicle equipped with BounceGPS. Co says that unlike radio frequency vehicle locating systems that require special equipment to be installed in police vehicles, BounceGPS uses real-time tracking that provides the precise location of a vehicle at any time, resulting in quicker stolen vehicle recoveries. The co posted a small Q3 profit and sales rose 62% to $4.9 mln... Don't know much about the co and the stock trades at $0.25, but thought we'd mention it.

Story Stock + Insider Buying + Penny Stock = AllAllan Pick


Saturday, February 18, 2006

And we'll have fun, fun fun 'til her daddy takes her T-bird away

Are we having fun, yet?

Our mixed bag of story stocks have turned in a noteworthy performance over the past six months. NNVC is up 1500%, while WAVR is down 25%. In-between, AVII and NVAX are up over 200%, BCRX up over 100%, recent pick PTSC up 62% and SMTR is down about 10%.

If one were to buy a little bit of every story stock mentioned here, I think overall the returns would be worth the risk. In fact, I have received private e-mails from folks who have made $25-50K on some of these. But the most frequently asked question is whether a particular stock is a buy now, or conversely if a particular stock should be sold for profits or to close out a losing position.

In and of themselves, I have no good answers, other then to buy a stock when I first write it up and sell it whenever you feel like it. It is the very nature of these picks, these story stocks, that makes it so hard to answer individual timing questions. The story is hardly out on most of these companies and for the most part, my profit targets, even when it comes to our 1500% winner NNVC, haven't even come into view yet.

That's another feature of story stocks, a dynamic unfolding story. For example, the story behind NNVC at 10 cents was more conceptual then anything else. Now with actual trials taking place, the story has graduated to more make or break considerations. That's also the case with XDSL, the story will change as development of their new battery technology goes well, or not so well. I alluded to this in my NVAX post last week. The story behind NVAX has taken a significant jump toward "bigger then we thought" with their collaboration with the University of Pittsburgh. At it's current price of $4.60, there may be a better risk:reward model for NVAX then when I first posted about NVAX at $1.49.

In any case, I am pleased not only with the performance of the group of stocks that I have introduced in these blogs, but also by the quality of readers who are posting comments and sharing your trading ideas. Those of you who watch Jim Cramer should be well aware of his opening disclaimer, that, "I am not here to make friends, I am here to make money." But we all know that Cramer is a disingenuous carnival barker.

As for me:

I am here to make friends;
I am also here to make money;
and I am here to help my friends make money.

If we can have a little fun while at it, all the better.


Thursday, February 16, 2006

FONR @ 65 cents


FONR looks to me like a good insider buy to buy and hold on for the near future. The insider buy wasn't huge and was to make a statement. This stock looks very cheap: Remember you were going to get an MRI for your back and had a problem with clostrophobia? Well, they make the machine that would have solved that problem. It also appears to allow the radiologist to get look at your back in a weight bearing position rather than with you laying down.


About FONR: FONAR® was incorporated in 1978, making it the first, oldest and most experienced MRI manufacturer in the industry. FONAR introduced the world's first commercial MRI in 1980, and went public in 1981. Since its inception, FONAR has installed hundreds of MRI scanners worldwide. Their stellar product line includes the FONAR UPRIGHT(TM) MRI (also known as the Stand-Up(TM) MRI), the only whole-body MRI that performs Position(TM) imaging (pMRI(TM)) and scans patients in numerous weight-bearing positions, i.e. standing, sitting, in flexion and extension, as well as the conventional lie-down position. The FONAR UPRIGHT(TM) MRI often sees the patient's problem that other scanners cannot because they are lie-down only. With nearly one half million patients scanned, the patient-friendly FONAR UPRIGHT(TM) MRI has a near zero claustrophobic rejection rate by patients. A radiologist said, "FONAR UPRIGHT(TM) MRI - No More Claustrophobia - The Tunnel Is Gone." As another FONAR customer states, "If the patient is claustrophobic in this scanner, they'll be claustrophobic in my parking lot." Approximately 85% of patients are scanned sitting while they watch a 42" flat screen TV. FONAR's latest MRI scanner is the FONAR 360, a room-size recumbent scanner that optimizes openness while facilitating physician access to the patient.

Wednesday, February 15, 2006


One of our bird flu stocks is up on news today. NVAX is trading up 5% on news of a collaboration with the University of Pittsburgh.

In and of itself, good news.

But take a look at this news story from two weeks ago, "Breakthrough in Bird Flu Vaccine."

Putting them together suggests that "Breakthrough" and NVAX are synonymous.

You do the math.


Tuesday, February 14, 2006


My friend Roger gave me a heads-up on Patriot Scientific earlier this morning. I want to post this before trading ends today, so I'll be brief. PTSC has a patent portfolio that they claim, "applies to any microprocessor on any device running at a clock speed higher than 125 MHz.....more then 150 companies have been put on notice of likely [patent] infringement."

Interested yet?

PTSC has licensed their patents to HP, AMD and INTC and has today announced a dividend of 2 cents per share payable to shareholders of record February 24, 2006.

I bought in today at 25.8 cents a share, then doubled up after some research at 27 cents a share. As I type this, PTSC is trading at 28.5 cents a share.

"Roll another one, my friend, just like the other one."


Stock Buybacks

This is particularly for Ron who has been doing some short-term trading based on announced stock buy-backs. Victor Niederhoffer had done some longer-term studies that show a statistical edge to buying stocks that are subject to company buybacks. His findings, are that "Buybacks Are Good."

While you're looking around Niederhoffer's blog, be sure to read his Valentine special:

Thought for the Day: 10 Things Happy Couples Do, by Mark Goulston

Back to trading,


Sunday, February 12, 2006

The Gilder Effect

Remember the go-go days of the late nineties, when George Gilder could send a stock into orbit by adding it to his portfolio list? Apart from being the genesis of my current trading activities, if the bull market were personified, that bull market wore the identity of George Gilder.

What is "gg" up to these days? I am still a subscriber, finding his monthly newsletter and perhaps more substantively, his subscriber forum, worth the price of admission, if not for the tech-na-babble, then certainly for a handful of trading ideas a year that more then make up for the annual subscription of $195 or $295 (depending on what you ask for when you call subscription services, really).

This weekend the Gilder Report for February arrived on-line. First, George took apart the bad-news bears that frequent Barron's Roundtable every year at this time. It was refreshing to hear the other side of global disintegration presented by George, global integration if you will, the flip side of Armegeddon:

"In any case, across the Barron's panel simmers wide sentiment that the 'dollar is doomed.' These guys have it exactly wrong. In fact, impelled by the spread of capitalism, by the expanding share of the U.S. financial markets, and by the Chinese adoption of a near dollar standard for its currency, the dollar is becoming increasingly dominant."

As for stocks, George still has his favorites and they haven't changed much in the past few months, or years for that matter. I wouldn't really be giving away the ship if I noted here that QCOM is stlll atop his list, but I'll stop short of naming names from his, Telecosm List, a professional courtesy sort of ethic.

This is what Gilder says about his companies, worth noting here, as George's, big picture vision has been 20-20 in such matters over the past ten years:

"All of them [companies on Gilder's Buy list] are on the right side of the most furitful and promising transformation in the history of the world economy. While the anxieties of the world continue to mount, this is a time to be invested in the suberb American platforms on the Telecosm list." ---George Gilder, February 8, 2006


Wednesday, February 08, 2006

Rumor Mill

Apple buying Palm. I see a lot of rumors in what I do, this is the first one I've passed along on my blog....For what it's worth. Confirmation? Watch PALM's price and volume.


Tuesday, February 07, 2006


Yesterday, in his Comment to Ilene about CYTR, Greg Reiman posted the text of a letter he got touting a $5,000/yr newsletter. The pitch promised to give new subscribers access to the newsletter's February 27, 2006 conference call in which they would name two new stock picks in the area of RNA Interference, one of the newest and hottest areas of Biotechnology. Here is the how Greg's Comment begins:

Greg Reiman said...
Hi Ilene:

Here is a pitch (long and heavy on hype) I received to subscribe to a very expensive newsletter, which I am not going to subscribe to.

Never the less, the discussion about RNA Interference threapies is pertinant to our previous discussion. I thought you might find it of interest and possible even sniff out the companies they allude to, but do not name.

Ilene recognized one of the stocks that the writer was describing, but not naming, Alnylam Pharmaceuticals (ALNY), a stock Ilene already owns and regards highly. We decided that if we could identify the second of two stocks being hyped in that solicitation letter, we'd post a new blog today and share our discovery.

But it's not just that we figured out that the two stocks were ALNY and Sirna Therapeutics (RNAI), it's that we also like both of these companies. They both are exciting participants in a new wave of biotechnolgy research and development called RNA Interference, both have strong managements, stellar balance sheets, solid science and savvy institutional holders and partners.

The play here is two-fold,

(1) That the newsletter pumping of the two stocks, if we got them right, will result in pops either on February 27-8 coincident with the supposed conference call to subscribers, or more subtle strength in the two stocks leading up to the 27th as resourceful people uncover the stocks they are talking about;

(2) Continued strength in the biotechnology sector in general that spills over into ALNY and RNAI.

There you have it, two new names and stocks to think about and maybe act upon along with some reasoning and detective work all fluttering about, like fireflies trading in the dark.


Sunday, February 05, 2006

Notable Quotables

Louis Navellier:

"If we can achieve returns in excess of 20% when the market has a value basis, then how much can we earn during a growth market? Frankly, if I don't earn at least 60% this year thanks to Wall Street's shift to growth, I'll be very disappointed."

"The bottom line is that now that the bias on Wall Street has shifted from value to growth, the flow of funds into growth stocks will help propel the average growth stock much higher. This bias towards growth or value typically lasts three to five years. Now that the bias has definitely shifted to growth, the outlook for growth stock investing is incredibly positive for our Emerging Growth stocks."

James Dines:

"How much longer will the uranium boom go on? Nobody knows the future for sure but, using our methods (especially reversing our position by the time everybody agrees with us, because we need to 'look wrong' to be right, as per Dinesism #27), we note that there has yet to be announced the construction of even a single new nuclear-power reactor in the United States of America even as other nations worldwide scramble to commence building them! It sure seems to us it's early in the uranium bull market."

Don Wolanchuk:

"Initial target for silver is sooooooo simple....simply draw a line off the highs of august 1993 and feb 1998.......its around 12bux"

David Gordon:

"Who is it that sells Google/GOOG that should cause such a sudden and ferocious decline? Each constituency has primacy at any given moment, and this decline has traders (shortest time frame, in my denotation) written all over it. So they will also cause the subsequent bounce when it occurs. (Soon, at its current pace of decline.) But they will be joined by investors -- yes, by such as me -- who have patiently awaited the correct moment (low risk, high reward) to purchase more shares. An initial bounce could occur off support at ~$358, with more support at $330, as mentioned previously."

Harry Dent:

"...We expect stocks to rally despite a slowing economy, as they are undervalued and there is nowhere else for investment dollars to flow, especially with flat housing prices and long-term interest rates that can only trend upward from here. The biggest obstacles to stocks continue to be oil and commodity prices from rising international demand and the Middle East and international tensions that are creating an additional premium for risk."


Thursday, February 02, 2006


Hi, Allan,

This is for your blog, can you please post it for me?

CYTR is doing really interesting research - a novel approach to diabetes and obesity with RNA interference, and the stock is very cheap. I have more to write about CYTR but I don't have time now and it may be a good time to take a small position, in case it gets some more positive publicity.


CytRx Announces Publication of Major Article Demonstrating That Its Proprietary Drug Target RIP140 Controls Insulin Sensitivity and Glucose Tolerance

Thursday February 2, 8:30 am ET

Article Further Supports CytRx Approach to Therapeutic Treatment of Obesity and Type 2 Diabetes -

Note from A:

While we await Ilene's closer look at CYTR, here is what I see: Market Cap is $69M, cheap, cheap, cheap. They have 19 cents per share in cash and no debt. They are working on a treatment for obesity and diabetes, two huge markets. The publication of the article (above link) suggests they have something and it works. If that proves to be the case, then $69M is a fraction of what this company is really worth.


Wednesday, February 01, 2006

A Plan for All Seasons

The H.S. Dent Forecast for February came today and little has changed in terms of Dent's expectations for a strong stock market into the end of this year. What could go wrong, according to Dent, are surging oil and gold prices and/or a geopolitical shock to the system.

A strategy that immediately comes to mind for playing all potential outcomes is to be in highly leveraged stocks, including a large exposure to precious metals. You should know by now that I greatly respect the work of Jim Dines and Don Wolanchuk in addition to Harry Dent. This trading strategy would also fit nicely into the analysis and forecasts of all three of these market commentators.

So there you have it, a plan for all seasons. On three, ready?

1-2-3 Break.