Fireflies

Some random musings on a Monday:

Where did the ads go? Google suspended my participation in their Ad-sense program, apparently they already had their quota of Jews. Oh, they guised the real reason, said I had violated their rules. Yes, I clicked on an ad for a product advertised on my blog, actually bought it. Buying an advertised product is a violation of rules? I like my reason better.

My Lumbago has been intolerable for the past few months. I lasted seven minutes in a MRI machine in October, can you spell claustrophobia with Nurse Ratchet bellowing, "Don't move, Don't Move," through the tunnel from hell. The only thing that has worked for me is a narcotic analgesic. Habit forming. Stopped it cold turkey this weekend after at least four months of daily use. My body is pissed-off, big time.

NNVC. Ilene has sold just about all of hers, very skeptical. She's the science part of this brain trust. I'm the dreamer, holding on to my core position, still. This one can go either way, so Buyers and Sellers, beware.

Did a tax recap over the weekend (not a good weekend to go cold turkey anything) and have generated another six figure year daytrading. Not gloating, just saying it can be done. Mine isn't the only way, but it is mine, created out of the thin air by thinkin'. Go for it.

Planning to spend end of year on the beach in South Carolina. Going to watch my daughter play some high school basketball. She's starting point guard. Called me Saturday to say she was MVP at a tournament last week. Here come those tears again.

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For What It's Worth

There's something happening here,
What it is ain't exactly clear.....
----Buffalo Springfield


Gold is up 5% since the posting of my Gold Blog. The XAU is up about 5% as well, my calls up close to 50%.

DSCO is up near 5% from Ilene's heads-up Blog.

ITWO is up 15% from the I-Buys covered in this Blog.

Stay tuned.

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Psychology of Investing

On the recommendation of my long time friend and trading collaborator, John Kercheval, Adjunct Professional Lecturer at Georgetown, I have been reading The Psychology of Investing by John R. Nofsinger. At barely 100 pages, paperback and costing $34, it better contain something tradable. It does.

Here's an example, appropriate for end of year tax selling. Chapter 3 is about, "Pride and Regret." It sets out the psychological basis by which most investors sell winners too soon and hang on to losers too long. Winners generate pride, losers generate regret. We are programmed to seek pride and avoid regret. But if you do the numbers, it is almost always financially correct to do the opposite, hang on to winners and sell losers. Winners tend to continue going up after the sale, losers tend to continue going down while still being held. Taxes take a chunk out of the winner's proceeds and losers offer no tax advantage by being held. Yet investors are typically overwhelmed by their embedded desire to seek pride (sell the winner) and avoid regret (hang on to the loser). Worth $34 to be aware of this sort of behavioral bias? You bettcha.

That was a summary of just one chapter of ten in this book. The nine others similarly contain tradable observations about the human condition and how it works against even the best and brightest traders/investors. Although not yet through the book, I wanted to bring it to everyone's attention and to thank John publically for bringing it to mine. A good tip doesn't always have to involve a stock.

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DSCO Update - by Ilene

We like DSCO as a still unknown bird flu play, but we like it even more for its potential to bring to market blockbuster $1B+ treatments for respiratory illnesses.

Discovery Labs (DSCO) has some significant events coming up in the near future. We're hoping for final approval of Surfaxin for Respiratory Distress Syndrome in infants in April, 2006. The results of the phase II trial of Surfaxin in Acute Respiratory Distress Syndrome (ARDS) should also become available early next year. With DSCO trading at around $7, the market cap is around $400M. The company's synthetic surfactant products, already shown to be effective in infant RDS, are being clinically tested for numerous indications, and if effective, may expand the current annual surfactant market to over $1.5 billion.

There's a tremendous need for treatment for ARDS, regardless of avian flu pandemics and our speculation of it's potential usefulness. ARDS in adults is a life-threatening disorder for which no approved therapies exist. It can be caused by a variety of insults to the lungs, including illnesses such as pneumonia and septic shock (a toxic condition caused by infection), and events such as smoke inhalation, near drowning, industrial accidents.

Background on Natural Lung Surfactants (from the website)

Surfactants are protein/lipid compositions that are produced naturally in the lungs and are critical to the lungs’ ability to absorb oxygen. They cover the entire alveolar surface of the lungs and the terminal conducting airways leading to the alveoli. Surfactants facilitate respiration by continually modifying the surface tension of the fluid normally present within the alveoli. In the absence of sufficient surfactant, or should the surfactant degrade, the alveoli tend to collapse and the lungs do not absorb sufficient oxygen.

By lowering the surface tension of the terminal conducting airways, surfactant maintains patency — keeps airways open. Loss of patency leads to compromised pulmonary function.

Pulmonary surfactant has additional properties, such as:

1. Physical barrier to inhaled particles and noxious agents
2. Enhancement of particle clearance
3. Host defense against infection
4. Anti-inflammatory properties

LINKS:

For a summary of the conference call, go to yahoo's dsco message board: . The poster, md4neon8s, has been called "the most knowledgeable neonatologist that he (a physician) knows (personally)," by Tom Bishop, the editor of BI Research. In a note to his subscribers, Tom referenced a conversation I started with md4neon8s, which Allan provided a link to.

For a complete update, listen to today's conference call.

For a complete description of the company, visit their website.

Got Gold?

I ask that question because Gold is in a bull market and my guess is most of you have very little if any exposure to Gold in your portfolios. As for me, guilty as charged. I have some inconsequential positions in Glamis Gold (GLG) and Coeur D'Alene Mines (CDE), but not enough based on the strength of the Gold chart.

Accordingly, today I'm adding some calls in the XAU index (February 130's), based on the same bull market leverage theory espoused in this prior blog. I am also on the prowl for additional stocks with significant leverage should the bull market in Gold accelerate in the months ahead.

Any gold bugs among my readers, please feel free to contribute your favorite names below in the Comments section. Gold may very well be another ticket to ten-bagger paradise.

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SMTR

In looking for a third speculative play to join NNVC and WAVR in the portfolio, I ran across a post by Don Wolanchuk today, suggesting that he was buying SMTR under 9 cents, since once above 10 cents, it would be untouchable. A little due diligence turned up this very bullish report on SmartTire Systems.

Now we have three, one already a 10-bagger, but looking for ten more and two on their way. Thus, sufficiently diversified in the speculative arena, we can return our attention to run-of-the-mill trading, which will serve to keep us occupied while the Pinta, Nina and Santa Maria sail in.

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Leveraging the Bull

Harry Dent's December missive to subscribers was about how the major indexes have broken out and he is sticking to his DOW 14,000 - 15,000 range by August, 2006. As you should know by now, my style of trading doesn't rely upon market direction as a major contributor to success, although it does help somewhat to be on the right side of the trend. Nonetheless, a rip-roaring bull market, the type that Harry Dent and Don Wolanchuk are suggesting are in the cards for us, begs the question, how to make the most of the coming fireworks?

One way is by leverage. Low-priced stocks, options, futures and options on futures all provide significant leverage in the direction of the major trend. Maybe the trickiest of the lot are low-priced stocks, the good, the bad and the ugly. We already have NNVC on our plate, hopefully in the realm of the good. Here's another one, courtesy of the aforementioned Don Wolanchuk: WAVR.

Waverider Communications from their website:

WaveRider Communications Inc. is the world leader in non-line-of-sight wireless broadband technology and deployments. With WaveRider's industry-leading product line and strong management team, the company is positioned for growth and to compete successfully in the world broadband market.

The link above takes you to their web site and that was my first stop before buying my initial position in the company. I like the fact that it's only about 15 cents a share and that Don is pounding the table on the stock. I also like the fact that WAVR was a $6.00 stock in May, 2003 and a lot higher then that in the go-go year of 2000.

It's a roll of the dice, but that's what we do in a bull market, right?

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NNVC

A few days ago I sold a small portion of my NNVC holdings above $1.00/share. Today, I'm strating to buy those shares back, under $0.70/share.

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ITWO

Some nice Insider Buying today in ITWO. Ten thousand shares each by one Director and the CEO and 22,000 shares by another Director, for a total of almost $600,000 worth of stock. ITWO is down from $25/share in August, trading at $13.25 at today's first filing, $13.50 when I bought in and as high as $13.94 in it's initial "pop." Maybe more to go.

Elsewhere, in our Bird Flu Basket, BCRX is up 33%, today, and that's on Roche news unrelated to its Bird Flu exposure.

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Buying Opportunity?

One of our Bird Flu Basket holdings is Hemispherx Biopharma ("HEB"), courtesy of Ilene's research. Today HEB announced a Research Agreement with the Canadian Department of National Defence (their spelling, not ours). Although the stock is up 3% on the news, it may be that the news is worth a whole lot more then 3%. If so, it spells buying opportunity. I added to my position already and may add more after I post this. Good Luck.

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NNVC - Update

NNVC seems to have found itself in a consolidation between about 90 cents as support and 1.20 as resistance. We continue to monitor all things bird flu for which the Internet in general and Google in particular have been incredibly useful. We have also maintained our correspondence with NNVC's management via numerous back and forth e-mails.

Back when we first became shareholders of NNVC, circa 10 cents a share, we felt the risk/reward assessment of the company was very highly in our favor. The market cap was low and there was no interest in the stock, even though it was a bird flu play. No one knew about it, yet. Now at over $1.00 per share, we feel the risk/reward is less attractive and we have less of a feel for which way this stock will move. Many of the other bird flu stocks we have been following have leveled off, though they do trade with great volatility.

NNVC has been receiving a lot of new investor attention and bird flu concerns are increasing at an exponential rate. Our questions to management are now are based on some very specific, science-based issues -- which have not been adequately addressed -- though we are still trying to get more specific answers. It may be that the answers to our questions would be inconsistent with the longer-term viability of NNVC as a biotechnology investment.

Although I am keeping most of my NNVC shares for now, I am taking some off the table above $1.00 a share and would even consider adding more under 75 cents, if it were to fall that far.

Bottom line here is that I'm a little less certain of NNVC then I once was and want to express that new sentiment to my readers, many of you who are watching this stock as closely as I am. If NNVC reaches my $10.00 target, I'll still do fine. But if it is going to drop back under $0.50, or worse, it would be nice to have had some NNVC cash off the table, to throw back into it, or even something else, as circumstances dictate.

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Beating The Market

The following article appeared this past weekend in the NY Times. More evidence that the "random walk" theory of not being able to beat the market in the long run is erroneous. In fact, based on Renaissance's track record and to a much lesser extent, the work we've been doing day-trading the past two years, the opposite seems to be true. You can beat the market, if you are of the mind to do so.

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NYTimes: $100 Billion in the Hands of a Computer

By JOSEPH NOCERA

PEOPLE ask me all the time: What's your secret?" James Simons said. We were sitting in an office in Manhattan that Mr. Simons uses when he's not at the Long Island offices of Renaissance Technologies, the money management firm he founded in 1982. He was wearing an elegant shirt and tie, and loafers with no socks. He took a drag from a cigarette, the second of three he would smoke in the course of a long interview.

I had indeed come to ask him what his secret was. In the hedge fund world, that's what everybody wants to know.

Mr. Simons, 67, who rarely talks to journalists, is hardly a household name like Warren E. Buffett. But Mr. Simons, who got into the hedge fund business after abandoning a stellar career in mathematics, has a track record that is jaw-dropping. This summer, word leaked out that he was starting a new fund - people took to calling it the "$100 billion fund" because its marketing materials say that it could conceivably grow to that enormous size. Not surprisingly, that has caused Wall Street types to be even more curious about him.

Here are Mr. Simons's numbers: from 1990 to 2004, Renaissance's primary hedge fund, called Medallion, has delivered annualized returns of 33.21 percent. (The Standard & Poor's 500-stock index has returned, on average, 10.98 percent during those same years.) Since the end of 2002, the fund, which has $5 billion under management, has disbursed $4.9 billion to its investors - with another $1.5 billion to be delivered at the end of this year.

And these returns are after Medallion's 5 percent management fee and 44 percent share of the profits - surely the highest hedge fund fees in the land. Medallion's returns, and its fees, have helped make Mr. Simons a very wealthy man, with a net worth that Forbes estimates at $2.7 billion.

When I showed Mr. Simons's returns to a hedge fund friend, he looked startled. "Nobody has numbers like those," he said. But here's the real eye-opener: no one outside the firm's 200 or so employees has a clue how he does it.

Medallion, you see, is a quantitative fund. In quant funds, trading activity is generated by complex computer models rather than human judgment. Most quants are secretive about the algorithms that drive their models; after all, that's their investing edge. But of the handful of big-time "black box" investors, as they're often called, Mr. Simons's box may well be the blackest.

HERE'S what we do know. Medallion's portfolio contains literally thousands of stocks and other financial instruments that it trades in rapid-fire fashion. The firm's scientists are constantly searching for repeatable patterns, and other signals, in the enormous amounts of data they compile. The computer models they devise tell them when to make trades based on those signals.

As Mr. Simons put it - and this is about as specific as he would get - "Certain price patterns are nonrandom and will lead to a predictive effect." He also told me that Medallion sticks with highly liquid securities that trade in public markets around the world. Why? "Because there is a lot of data on such instruments, and we're very statistically oriented," he said. He stays away from exotic derivatives.

Not even Mr. Simons's investors know much more than I've just described. "We trust Jim and we think he's smart," said one longtime Medallion investor. "So we stopped caring what the computer was doing." When this investor began describing Mr. Simons's investing approach, he admitted he was guessing.

Mr. Simons shrugged when I suggested to him that his firm's lack of "transparency," as they say in the business, was bound to make people nervous. Humans fail in the market all the time, but somehow we are willing to keep giving our money to human beings to manage because we understand investing based on human judgment. Or at least we think we do. But black box investing feels different. It feels scary somehow, precisely because it is not something most of us can understand.

"How any great investor does it isn't in the least obvious," Mr. Simons responded. "How we do it isn't any more mysterious than how a great fundamental investor does it. In some ways it is less mysterious because what we do can be programmed." Then he stopped, took another drag from his cigarette, and let out a small chuckle. "Well," he conceded, "it's less mysterious to us."

Mr. Simons wasn't always a quant. A former crypt analyst - a code breaker, that is - he did important work in mathematics that helped lay the foundation for string theory. When he began managing money in the 1970's, he did it the same way most investors did: he used his own judgment. "At first," he said, "I didn't think about investing in a scientific fashion. But I was trading currencies, and it gradually occurred to me that there might be some way to create models that would allow you to predict currency movements."

Although Mr. Simons and a partner made an absolute killing in the currency markets the old-fashioned way - they made huge bets that turned out to be right - he began surrounding himself with scientists who developed models for all sorts of tradeable securities. "By the end of the 1980's," he said, "I was a model man, and didn't want to do fundamental analysis." One advantage, he said, is that "models can lower your risk." Another, though, is that "it reduces the daily aggravation." With old-fashioned stock picking, he said: "One day you feel like a hero. The next day you feel like a goat. Either way, most of the time it's just luck."

Indeed, trading the way he does, making thousands of small trades aimed at capturing small price movements, doesn't generate the kind of "10 bagger" that investors love. But when done well, quant investing is less likely to have the kind of disaster that is always the danger when one bets big on a stock.

To those who point to Long-Term Capital Management as an example of the dangers of black box investing, Mr. Simons's defenders point out that his fund has far less leverage than Long-Term Capital, and that in any case, while Long-Term Capital had several Nobel laureates on board, human bets were what caused it to go awry.

Clifford Asness, another well-known quant hedge fund manager, said that while he knew no more about Mr. Simons's methods than anyone else, "It's hard to believe that there isn't a measure of safety in Jim's approach.

"Presumably, he's got a highly diversified portfolio, high turnover, and he's capturing small inefficiencies. It's hard to lose a ton of money doing that. It is always possible that someday his models might stop working. But that's different from 'blowing up.' "

"You know," Mr. Asness added, "human beings have a black box, too. It's called the brain."
As for the new "$100 billion fund," Mr. Simons was even more constrained than usual, thanks to regulatory restrictions that limit what he can say publicly while the fund is raising money. People are buzzing about it nonetheless, for it seems to be a major departure from Medallion. Medallion's investors were almost all wealthy individuals; the new fund, called the Renaissance Institutional Equities Fund, has a $20 million minimum investment and is aimed at institutions. It has a much lower fee structure. It will invest in - or sell short - only publicly traded equities. Instead of making rapid-fire trades, it will be much closer to a buy-and-hold portfolio. And so on.

In one critical way, though, it is similar to Medallion. As the marketing document, which I obtained from a person unconnected to Mr. Simons, put it: "The company's risk control, variance and covariance estimation, execution techniques, slippage models, and predictive signals are all derived from those employed by the managing member in trading the Medallion Funds."

In other words, Mr. Simons believes that computer models similar to those that have worked for Medallion will also work for a fund that can hold $100 billion worth of stocks over long periods of time. It is absolutely audacious.

What interested me most of all was: why? At an age when most men are contemplating retirement, with more money than he can count, why was Mr. Simons still at it? "I enjoy the challenge," he replied.

He then began describing a demonstration he saw recently of a new nuclear accelerator at the Brookhaven National Laboratory, where he is on the board. Two atoms hurtled toward each other, colliding with great force. "A huge number of particles are thrown out," he said, "and the job is to analyze everything that results from the collision."

"Watching the spray of particles on the screen made me think of the stock market," he continued. Every trade, even of a hundred shares of a company, affects every other trade. And every day there are thousands upon thousands of such trades, all of them affecting the rest of the market. His work, as he sees it, is to analyze that incredibly complex mosaic and try to figure out how it all fits together.

"The subject may not be the most important in the world," he concluded, "but the dynamics of the market are really interesting. It's a serious question."

I suddenly understood the motivation behind Mr. Simons's new fund. He's doing it because he wants to see if it can be done. Once a scientist, always a scientist.

NNVC Valuation

If NNVC were to reach the valuation of Genentech, based on the current float each share of NNVC would be worth $5,000.

If NNVC were to reach the valuation of Amgen, based on the current float each share of NNVC would be worth $5,000.

If NNVC were to reach the valuation of Amylin, based on the current float each share of NNVC would be worth $200.

If NNVC were to reach the valuation of the average Biotechnology stock, based on the current float each share of NNVC would be worth $70.


NNVC is trading today at $1.15.

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NNVC Sentiment

Here is a sampling of sentiment toward NNVC from a few message boards. A lot of mindless hype, but maybe someone knows something and is guising it as mindless hype. Brilliant!

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I have previously posted that i have orders in around $20 and $35, however I am taking only up to 10% off the table , because if they are only partially correct in their confidence about the efficacy in their own labs, this stock is destined north of $100. I know John Pierpont Morgan said when asked the about the secret of how he acquired tuch geat wealth hi he answered , " because I always get out too early " and that makes sense , but when you have a clear breakthrough getting out too early would haunt you for years or decades erasing any satisfaction you get from taking a large though sure profit. SAy the stock goes to $100 or a mere $10 billion market cap and you get out at $7 with a huge gain. How would that make you feel? Awful? I prefer to pull just my seed money out and not miss the mind nubming potential of this BREAK THROUGH TECHNOLOGY. HECK IF IT IS ONLY 10% OF WHAT ANIL DIWAN PREDICTS IT IS A $10 BILL DOLLAR COMPANY.


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There are lots of "rules" for trading penny stocks. Notwithstanding those rules, once in a blue moon, an extraordinary opportunity presents itself. I think NNVC may be such an opportunity.

The bottom line, of course, is whether the science works (a question to which there is yet no definitive answer). However, if the science does work, Katie bar the door!

I can't quantify the chances of the science being successful, but I am impressed by the people involved, and what has been achieved to date.

If NNVC flops, my life will go on as before. If NNVC zooms, it's a different story. I like the odds enough to make, for me, a substantial investment here.

So, ala Clint Eastwood, I ask myself: "Do you feel lucky, punk?" And the answer is "yes."

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For a .03 cent stock to run over a buck and hold steady between .80 and .95 on little news tells you someone does know it works.
If not you would think we would be back around .25 or lower

All hype aside if the next tests are succesfull this could pop between 5 and 10 dollars in a day.

Its possible,and yes 100 per share is possible too,if it works.

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NNVC is focused on viruses - that is their thing.

The basic development covers cancer as well! I will follow THAT aspect carefully should our testing prove the efficacy of the development on viruses like HIV/AIDS and avian flu.

Should NNVC succeed in the virus field, cancer will be next, IMO!

Will NNVC be fortunate to enter that field as well? Could be. And the future would expand 10 fold, IMO.

Perhaps Theracour will license the cancer stuff to another company. That will prove interesting should it not be NNVC. At this moment I am not aware of any company having the license for cancer. I am a bit puzzled at that. Perhaps Theracour is waiting to see how the flu stuff goes and perhaps, as well, so as to focus all resources on the flu side, is concentrating on flu ONLY at the moment.

My point is to EMPHASIZE the wider application of the patented development to areas other than just viruses.

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NNVC vaccine possible


Diwan says that if the FluCide-I trials are successful,
it will not be that difficult to create a vaccine
for Avian flu.


A potential bonanza
It is clear that if any one company were to
develop a highly efficacious vaccine against Avian
flu, the financial rewards could be enormous.
“Just as penicillin brought on a major revolution
in antibiotics, the first viricide will create a
similar revolution,” Diwan predicts. “Just imagine;
a vaccine that attacks and destroys the virus
particle itself.”

Mid-Term Exam

What, you thought I was kidding? Here it is, open book, sixty-minutes "honor code" time limit:

1. Give an example of how Daytrading can make you money in the stock market.

2. Give an example of how a Bird Flu Basket can make you money in the stock market.

3. Give an example of how Insider Buying can make you money in the stock market.

4. Give an example of how Bullies with Guns can make you money in the stock market.

5. Give an example of how The Deiphosophist can make you money in the stock market.

Extra Credit:

Identify the single best stock to buy on Monday's open and explain your reasons including any relevent calculations, equations and/or links.

Go.

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Putting It All Together

Here is a sumamry of topics we have covered this semester. It is from this list that I will be creating your mid-term exam. I suggest you review these topics and associated blogs. Remember, it's your understanding of the course material that I am most interested in, not your memorization of my lectures.

!. Elements of Daytrading
2. Bird Flu Basket
3. Insider Buying
4. Bullies with Guns
5. The Deipnosophist

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Nanoviricides

Lest I be accused of only posting about NNVC when it's up 20%, here's my contribution when its down 20%. By the way, this decline is a buying opportunity and I have a bid in slightly under current prices to add to my position. I may move it up before the close, depending on, well, just depending.

The article below was posted today on Silicon Investor and provides a little background on just what we have in this stock and company.

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Indian scientist Dr Anil R Diwan develops bird flu drug

NN Sachitanand
Wednesday, November 09, 2005 21:32 IST

A novel medication called a nanoviricide, being developed by Westhaven, Connecticut-based NanoViricides, Inc, is likely to prove much more efficacious in treating patients infected by the deadly Avian flu than current favourites like oseltamivir (TamiFlu) of Roche and zanamivir (Relenza) of GlaxoSmithKline.

The key intellectual property on which the new drug is based is a flexible nanomaterial that contains an encapsulated active pharmaceutical ingredient and, using a ligand , targets it to a specific type of virus.

There is an Indian connection to this. The inventor of this nanomaterial is Dr Anil R Diwan a B.Tech from IIT, Bombay and PhD from Rice University, USA. He holds a US patent on his older polymeric micelle technologies, with his colleagues at University of Massachusetts. He continued to work further in the field, to develop nanomaterials that are capable of multi-specific multi-targeting of viruses, and at the same time capable of encapsulating active pharmaceutical ingredients (API) in industry-leading payload capacities. This new work has resulted in nanomaterials called “TheraCour” (therapeutic courier).

NanoViricides, Inc., where Dr Diwan is the President, has a full license to TheraCour technologies for developing nanotechnology-based targeted anti-viral therapeutics. The company went public earlier this year when it was acquired by Miami-based EDot.com, Inc. In an e-mail interview, Dr Diwan pointed out that the existing drugs for treating Avian flu are not efficient because they do not work for all of the patient population, but only in a fraction of patients, they lead to a multiplicity of resistant strains in anywhere from 1% to 10% of patients or more, and with influenza, reassortment is an additional scary possibility when poorly efficacious drugs are used.

Diwan believes that FluCide will be far more effective than TamiFlu, for both prophylaxis and treatment due to its comprehensive destruction of the virus particle and being safely metabolised in the body after accomplishing the job.

Immunotherapies like vaccines require the body’s immune system to be in a very good state and require the body’s immune system cells to participate in clearing up the infection. The antibodies only ‘tag’ the virus to identify it to the defence system. FluCide does not require the body’s immune system to participate at all. It is expected to work via multiple concerted mechanisms. It first binds to the virus particle like a Velcro tape, rather than through a single point attachment like other influenza drugs. This causes FluCide to completely envelop and engulf the virus particle, so that it can no longer infect a cell.

http://dnaindia.com/report.asp?NewsID=9108

Truth in Advertising

Jim Cramer is all over the place lately, TV, Radio, RealMoney Blogs, CNBC specials and apparently yet another book. One would think he adds something to the quest for the holy grail of stock trading and/or investing. His legion of followers seem to either love him or hate him. Why the disparity of opinion? Rank ignorance. Let's fix it right here, right now.

Cramer runs a trading service called Action Alerts PLUS. Lets use this service to evaluate Cramer, since the only true objective test of his expertise is his actual documented performance.

Year-to date, the S&P 500 index is up 0.50%. Against that benchmark, Cramer's YTD return is up 4.38%.

Let's look at this two ways. One, Cramer is beating the market averages by about 9 fold. (9 X .50 = 4.5%) The other way, the way I look at it, is that for all his bluster, the guy is barely beating out a 5-year bank CD.

'Nuff said.

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Short-Term Stock Trading Ideas

Based on my private e-mail, there is a lot interest in successful stock trading. I can tell you until the cows come home about insider buying, but nothing I say is going to ring as true as the numbers I am about to provide below. These are all trades generated last week on insider-buying and nothing else. All entry prices are based on the close of the day the trade was published to the public on the SEC web site. They were highlighted by one of my favored services, Insider Cow ($25/mo). No one has to day-trade nor give up a day job to have taken these trades.

Date.....Stock.....Entry.....Current.....Return

10/31....SYK.......41.07.....43.07..........4.8%
10/31....QSC........0.71......1.02.........43.6%
10/31....NXTY......12.84.....13.54..........5.4%
10/31....EUBK......10.42.....11.94.........14.6%

The average return last week for these four trades was 17.1%. That's not to say you could exactly duplicate these trades, although I see no reason why not. Nor is it to say that you will always get these kinds of returns, although after a year of insider-trading I am convinced that it is one of the easiest and most consistently profitable short term trading methodologies I have ever come across.


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Our First 10 Bagger!

NNVC has hit 99 cents this morning, making it our first 10 bagger since introduced in this post at the end of August:

NNVC

What to do now?

Anything you want. But I'm holding my core position for a lot more then 99 cents. Taking your origanal stake off the table is not a bad idea, but I do believe we are closer to the beginning of the run then the end.

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Discovery Laboratories Inc. (DSCO)

A few days ago my trading partner Ilene suggested that we add Discovery Laboratories (DSCO) to the Avian Flu Basket.

Ilene's analysis was based on her reasoning that DSCO might be serendipidously involved in the development of a drug, Surfaxin, that could be used in the treatment of Acute Respiratory Distress Syndrome("ARDS"), a condition, often fatal, that may be caused by bird flu. If it is found that Surfaxin is effective in ARDS, then it should similarly be useful to treat avian flu. DSCO is currently engaged in a clinical trial using Surfaxin for ARDS (caused by other insults to the lung besides avian flu infection).

We posted our thoughts on Silicon Investor and on the Yahoo message board for DSCO, looking for some feedback from others who follow the company. Our efforts have paid off, as based on what we have uncovered in the past few days, we are adding DSCO to our Avian Flu Basket.

Here is a link to Ilene's original post on Yahoo and a series of outstanding responses from some very informed individuals, the final three of which simply hit the ball out of the park on this one:

DSCO & Bird Flu

This brings to ten the number of stocks on our Avian Flu Basket.

A

NNVC

NNVC has begun preclinical studies on one if it's products, Flucide-I, an anti-viral. This was expected, nonetheless, is big news. I added to my NNVC position yesterday at 55 cents.



NanoViricides Has Begun Preclinical Studies For Their First Anti-Viral Drug Targeted Against Bird Flu

Monday October 31, 8:00 am ET

Studies Are Being Conducted at the Beth Israel Deaconess Medical Center, a Teaching Hospital of Harvard Medical School

WEST HAVEN, Conn.--(BUSINESS WIRE)--Oct. 31, 2005--NanoViricides, Inc. (Pink Sheets:NNVC - News), today announced that it has commenced preclinical studies for its anti-viral drug FluCide-I(TM). The studies are being conducted at the Beth Israel Deaconess Medical Center, a teaching hospital of Harvard Medical School, under the direction of Dr. Krishna Menon. Dr. Menon, the Company's Chief Regulatory Officer, explained that nanoviricides are complex materials. "We have started working on the basic safety of the polymer under a maximum tolerated dose protocol in mice. In the second part we will study the ligands that target FluCide-I(TM) to H5N1 and common influenza viruses. Thereafter, we will study the efficacy of FluCide-I(TM) itself against H5N1 and common influenza."


Dr. Anil Diwan, President, explained that, "if successful, the relevance of nanoviricides can be compared to the discovery of Penicillin, the very first bactericide. Prior to antibiotics, bacterial infections were treated with patient isolation, chicken soup and Vitamin C. Current anti-viral medicines can at best only partially inhibit the virus from multiplying in the human body. Although we cannot make claims of certainty yet, after we get good results from these studies we will be able to say that we have developed a true virus killer."

The Company is encouraged by the recent statements from high level international officials and health ministers of different countries concerning the urgency of developing effective vaccines and treatments and believes that a rapid regulatory approval of FluCide-I(TM), is possible should these studies be successful.

http://www.nanoviricides.com

Flu Stocks - Update

AVII....Bought 2.25....Current 3.60.......+60%
BCRX....Bought 8.69....Current 15.22......+75%
CRXL....Bought 24.13...Current 26.67......+11%
DVAX....Bought 6.00....Current 6.30........+5%
HEB.....Bought 2.02....Current 3.30.......+63%
NNVC....Bought 0.09....Current 0.50......+450%
NVAX....Bought 1.49....Current 4.95......+232%
SVA.....Bought 4.05....Current 6.25.......+54%
VICL....Bought 6.00....Current 5.25.......-13%

Average per equally weighted portfolio = +104%

What do we do now? These are all stocks that I have picked along the way as longer term trades (aka Buy & Hold) in biotechnology stocks participating in the avian flu sector. Some of the winners here may have been lucky guesses, but I did put some thought, research and analysis into each pick. Whether that was a good idea or not has yet to be determined, but, so far, so good.

Are these as a group, or individually, still good buys? I just don't know. I am maintaining a core position in each listed stock and have been adding trading positions from day to day. What seems to be working is to buy a trading position after a bad day or two and sell after a good day or two, while leaving the core position untouched.

Since the avian flu story seems to be closer to the beginning then the end, I would guess that all of these are closer to Buys then to Sells.

A

Dynavax

Adding DVAX to the bird flu basket. From their website:

Human Viral Influenza

Human viral influenza is an acute respiratory disease of global dimension with high morbidity and mortality in annual epidemics. In the U.S. there are an estimated 20,000 viral influenza-associated deaths per year. Pandemics occur infrequently, on average every 33 years, with high rates of infection resulting in increased mortality. The last pandemic occurred 35 years ago, and virologists anticipate that a new pandemic strain could emerge any time.

Current flu vaccines are directed against specific surface-antigen proteins. These proteins vary significantly each year, requiring the vaccine to be reconfigured and administered annually. Our approach links advanced ISS to nucleoprotein, one of the flu antigens that varies little from year to year, and then adds it to conventional vaccine to augment its activity. While nucleoprotein alone is not capable of inducing a protective immune response, we believe that linked ISS-nucleoprotein added to conventional vaccine will not only increase antibody responses capable of blocking viral infections, but also confer protective immunity against divergent influenza strains. In the third quarter of 2003 we were awarded a $3.0 million grant over three and a half years to fund research and development of an advanced pandemic influenza vaccine under an NIAID program for biodefense administered by the National Institutes of Health.

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Market Timing

Harry Dent is calling this the last and greatest buying opportunity of the decade. Jim Dines and Don Wolanchuk are also bullish. Robert Prechter is calling for a crash. What's a boy to do?

Market Hulbert posted this column on Market Watch this morning. In short, he is seeing the most bearish sentiment readings in the past six years. His research suggests that these levels of bearish sentiment are there to fade:

"There are no guarantees, however, as contrarians would (or at least should) be among the first to emphasize.

"But to be bearish now, you are in effect betting that average short-term timing newsletter will be right, something that it usually is not."

Sounds like a plan to me.

NNVC - Business Model

NNVC - Description of Business Model

NanoViricides, Inc. ("the Company") is a nano-biopharmaceutical company whose business goals are to discover, develop and commercialize therapeutics to advance the care of patients suffering from life-threatening viral infections. We are a development stage company with several drugs in various stages of early development. Our drugs are based on several patents, patent applications, provisional patent applications, and other proprietary intellectual property held by TheraCour Pharma, Inc., to which we have the necessary licenses in perpetuity for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Herpes Simplex Virus (HSV), Influenza and Asian Bird Flu Virus. We focus our research and clinical programs on specific anti-viral solutions.

We are seeking to add to our existing portfolio of products through our internal discovery and clinical development programs and through an in-licensing strategy. The Company owns exclusive worldwide license in perpetuity to technology that enables the creation of "nanoviricides (tm)". A nanoviricide is a flexible nano-scale material about the size of a few billionths of a meter,that is chemically programmed to specifically target and attack a particular type of virus, like a .....

Nanoviricides thus act by completely novel and distinctly different mechanisms compared to most existing anti-viral agents. The self- assembling nanoviricide "trojan horses" course through the blood stream, seek their target, i.e. a specific virus particle, attach themselves to the virus particle target, fuse with the virus particle, thereby destroying the virus particle's ability to infect host cells, and go further to deploy active ingredients into the virus particle that can be chosen so as to destroy the virus genetic material (such as viral DNA, viral RNA, etc.), as well as to destroy key viral components that the virus carries inside its "belly" such as the reverse transcriptase, the protease, and the integrase carried by HIV particles). We believe this gives us an edge in the field of anti-viral therapy.

The nanoviricides function without any dependence on the body's immune system, and therefore may be expected to be superior to antibody- based anti-viral agents, as well as therapeutic vaccines, which depend upon immune system components of the body for effectiveness to various extents. Anti-body based viral agents such as Hepex B(tm) (Cubist/ XTL Bio) have been approved by regulatory agencies.

The Company believes that because the nanoviricide assembly hides the toxic anti-viral agents in its "belly" and delivers these only into the viral particles in a specifically targeted manner, the side effects related to systemic toxicity of anti-viral agents may be substantially lower with the nanoviricides than with the existing anti-viral therapies. Existing anti-viral therapies simply load the naked toxic active pharmaceutical ingredient (API) into the entire body, thereby affecting human cells, which may be responsible for substantial portion of their toxic effects. This current approach is akin to strafing with a rifle through busy city streets with the hope of hitting a terrorist or a criminal! In contrast,
nanoviricides are like guided missiles.

The Company believes that nanoviricides act by a novel set of multiple,concerted, mechanisms. We believe that this makes them unique, and gives them an edge in the marketplace. However, being so novel, our drugs are not directly comparable to existing anti-viral therapies and classes of drugs. Thus, the safety and efficacy of the nanoviricides needs to be established by experimentation, and cannot be anticipated on the basis of any similar information regarding existing drugs.

A typical nanoviricide drug is designed like a ....... It has a number of recognition "ligands" on its surface, that are specific to a single type of virus, say HIV. They are like the GPS on a directed missile. They will identify the enemy and attach to specific "landing sites" on the enemy target.

The nanoviricide micelle, after landing onto a virus particle, is capable of spreading itself all over the virus particle, and thus it can completely envelope and thereby neutralize and disable the virus particle from binding to its target, a human cell.

This is the uniqueness of the flexible TheraCour nanomaterials. Hard sphere nanomaterials such as dendritic materials, nanogold shells, silica, gold or titanium nanospheres, polymeric particles, etc., are generally not capable of completely enveloping and neutralizing the virus particle in this fashion.

The Company thus believes that our approach is far superior to existing approaches to anti-viral therapy. The Company believes that our drugs will form the major weapons of fight against HIV/AIDS even after the other therapies have failed, or in conjunction with the existing therapies. This is because the current nanoviricides approach is based on reduction in viremia, i.e. free virus particles in the blood stream, in contrast to existing agents which are directed against control of intercellular replication of HIV. Uncontrolled viremia occurs in the AIDS stage of HIV, even if current drugs are still in use in that patient. Control of viremia is known to be very important for arresting further progression of the disease as well as for reducing the likelihood of secondary opportunistic infections. Secondary infections are the major cause of HIV/AIDS-related deaths.

The Company does not claim to be creating a cure for HIV or any other viral disease. The Company's objectives are to create the best possible anti-viral nanoviricides. We believe that we are creating weapons in the fight against a number of viral diseases that are far superior to the existing therapies. Our long-term research efforts are aimed at augmenting the nanoviricides currently in development with additional agents that together may lead to either total long term control of or in many cases even cure of many viral diseases.

The Company plans to develop several drugs through the preclinical and clinical trials phases and obtain US FDA approvals for these drugs. The Company also plans to seek regulatory approvals in several international markets, including developed markets such as Europe, Japan, Australia, and underdeveloped regions such as India, China, and the African subcontinent. The Company anticipates partnering with medium and big pharmaceutical companies at various opportunities in order to advance the various drugs into commercialization. The Company may receive license fees and development fees for such partnerships, in addition to royalties based on sales of any resultant drugs..

The Company currently has in early development stage, products against HIV/AIDS and against Influenza. We plan on undertaking the development of drugs against other viruses when adequate financing becomes available

Flu Basket

AAVI....Bought 2.25....Current 3.05.......+36%
BCRX....Bought 8.69....Current 17.87.....+106%
CRXL....Bought 24.13...Current 27.10......+12%
HEB.....Bought 2.02....Current 2.71.......+36%
NNVC....Bought 0.09....Current 0.45......+400%
NVAX....Bought 1.49....Current 3.57......+140%
SVA.....Bought 4.05....Current 7.59.......+87%
VICL....Bought 6.00....Current 5.50........-8%

NNVC

Congrats to all who took the plunge, +300% and running!

A

Vical-Part II

Vical announced this morning a private placement of $22.2M in stock priced at $4.80 per share. The price is based on a 30 day average of closing prices, which unfortunately for those of us who bought in yesterday, was way below recent price action, causing about a 15% decline in value of our VICL holdings today.

What to do?

I doubled up my VICL positions today, bringing my average cost basis down. My thinking is that despite the drop in stock price, that this is longer term good news for VICL which is increasingly in the forefront of vaccine technology. The money bolsters VICL already strong balance sheet and the offering was sold out, meaning the deep pocketed institutional investors jumped at the opportunity to add to their holdings. In other words, my timing was off by one day, but my underlying analysis remains bullish, if not more so.

This also highlights the advantage of a basket approach in ideas like Avian flu and biotechnology stocks in general. Although a 15% haircut hurts like hell, it's more or less a paper cut, having minimal effect on our basket as a whole.

Anyway, when NNVC hits $10 a share, none of this will matter.

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Vical

I'm adding Vical (VICL) to the Avian Flu basket. Vical ran from $4 to almost $7 in the past month and is at about $6 near the close today. They recently received a government grant for developing their DNA vaccine technology for rapid manufacturing of vaccines required to stem new epidemics. Here's a link to the funding news.

Today has also seen some insider buying in ALXN and CYBX.

Internet Scum

The advent of Blogs has created a wealth of insight and sharing of ideas that is truly a reflection of the best that the Internet has to offer. My little corner of the blogworld is just a tiny spec in the grand mosaic being painted by Bloggers from across the globe. The grandness of this vision has also attracted the everpresent leeches and scum who infect healthy thriving organisms with their self-serving, self-propogandizing tripe.

As a result, I have instituted a filter that should cut down and/or eliminate junk posts in the comment section of this Blog. It's just one easy step more in posting your comments as described below. I am sorry for the inconvenience, but I think it will make this Blog better for all of us and will be worth the extra effort.

A

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Word Verification

What is the word verification option?

The "word verification" option can be found on the Settings | Comments tab for your blog, and it looks like this:

If you choose "yes" for this setting, then people leaving comments on your blog will be required to complete a word verification step, similar to the one presented when you create a blog:

What this does is to prevent automated systems from adding comments to your blog, since it takes a human being to read the word and pass this step. If you've ever received a comment that looked like an advertisement or a random link to an unrelated site, then you've encountered comment spam. A lot of this is done automatically by software which can't pass the word verification, so enabling this option is a good way to prevent many such unwanted comments.

Good News / Bad News

The good news - bad news is in the momentum being generated by our bird flu basket started less then a month ago. Have a look:


AVII Buy 2.25 Current 2.68 +19%
BCRX Buy 8.60 Current 13.12 +52%
NNVC Buy 0.09 Current 0.24 +167%
NVAX Buy 1.49 Current 2.48 +66%
CRXL Buy 24.13 Current 30.41 +26%
SVA Buy 4.05 Current 5.34 +32%

Why is this group moving? Yes, there's a lot of hype in the media now, but is it also because a hard rain's gonna fall?

A

HEB

HEB highlighted this morning on Briefing.com as an, "under-the-radar bird flu play...their Ampligen vaccine enhances the effectiveness of Tamiflu against the avian flu."

Technically, HEB breaking out today on very heavy volume. Enough for me to add it to my avian flu basket. Speaking of which, NNVC has doubled in past week.

A

Follow-ups

(1) Bully With A Gun

Yesterday the saga concluded with my paying a $538 fine for a "tag" violation, no points, not even a notation on my driving record. This was a case where I was charged by a punk-ass Washigton State Patrol prick for "Negligent Driving, 2nd Degree," where my infraction was driving a nice BMW with out-of-state plates. I hired a lawyer which was my way of getting the local prosecutor's office to look at the file and I was offered and accepted the above deal. They reduced a charge of driving to endanger to a tag violation, which tells you what they thought of the cop's report. So my total cost was $538 fine plus $350 attorney fee, or $838. I'm just adding it to my cost basis of my X3 and updating my view of local law enforcement.

(2) Avian Flu

Yesterday, Friday, my basket of Avian Flu picks popped across the board. This conincided with national news coverage and intital reports of human to human transmission in SE Asia. NNVC, which I have been adding to under 9c a share, popped to 12-13c. That's why I think it belongs in the bird flu basket, huge upside leverage.

(3) Secrets of Success

Lots of nice feedback on this piece, mostly through private messages. Speaking of Navellier, he published again on Friday after the close. Some stocks to watch for Monday's trading:

AAPL
FPP
FORD
NVDA

(4) Harry Dent

I've talked about Dent's bullish paradigm on many of my early blogs, I'm too lazy this morning to look up the links, but they are there. Anyway, its more important what he thinks of conditions today, October 1, 2005. Here's the heading from his October issue, which I just downloaded and printed out:

"Get Ready for the Next Great Bubble Boom - Major Buy Signal Imminent!"

'Nuff Said.

(5) Jim Dines on Uranium

Been reading Jim Dines on Uranium. His take is that we are still very early in a worldwide transition from Oil to Uranium as the world's new source of energy. China and India have very aggressive nuclear energy ambitions for bringing their respective societies into the modern age of electricity and those companies mining uranium are tantamont to Stardard Oil of the early 20th centruy. A few of his favorites are CCJ, FRG and Laramide Resources, LAM.TSVX.

Avian Flu Picks - Update

While the equity markets have been knee deep in meteorology this past week, I've been researching further into the avian flu vaccine opportunities, many of which were set out in my last blog. I've added a couple names and want to provide the updated list here. I still don't have time to describe each pick with the whys and wherefores, so for now, you're on your own for due diligence. A good place to start is to plug the symbol into Yahoo Finance and/or go here for a more scientific list of posts related to the flu and it's consequences.

AVI Biopharmaceuticals.......AVII
Biocryst Pharmaceutical......BCRX
Crucell N.V..................CRXL
Nanoviricides................NNVC
Novavax......................NVAX
Sinovac Biotech..............SVA

Avian ("Bird") Flu Picks

Starting a Buy & Hold basket of Avian flu picks, smallish biotechs that serve up a high degree of risk/reward should a worst case scenario on this infectious disease begin to take hold. If time permits, I will get around to my reasons, but for now, let's just set out the symbols and go from there:

AVII 2.25
BCRX 8.60
NNVC 0.09
NVAX 1.49

Secret of Success

With over 25,000 hits on this blog since inception, I am flattered and at times overwhelmed by the interest out there in successful trading. I also get a lot of private e-mail generated by these blogs, questions and comments that I do not generally make public because you (the viewer) chose not to post publicly and I respect your privacy. But there is one question that gets asked over and over again, by different folks with different approaches and interests in trading, so it seems OK if I post this question, in my own words and then try to answer it in a way that makes the most sense to me as a trader and blogger.

"What is the secret of your trading success?"

My answer may disappoint those who seek some holy grail software program, mathematical equation, secret geek guru, cycles, waves, or numerology. The answer instead is that there is no secret, not in the sense that we think of secrets. I have set out in plain view over the course of these blogs what I am doing and how I am doing it. I used one example, insider buying, to describe in exact detail how it is done and have alluded to other approaches beyond insider buying that utilize the same concept, approach and implementation. Today, I will, for the sake of science, disclosure and the sheer brilliance of it all, give you another specific example, complete with names and numbers.

I probably spent most of this past three-day weekend analyzing the past two years of the work of Louis Navellier, publisher of four newsletters, Emerging Growth, Quantum Growth, Blue Chip Growth and Global Growth. The first one, Emerging Growth, used to be called "MPT Review," named after "Modern Portfolio Theory." Navellier discarded this name at the beginning of this year, stating that his methodology is no longer a theory, that his track record has proven the validity of his "quant" approach to stock picking. He may have a point as in his 20+ years of publishing his stock picks, his cumulative return is 4,385% versus a cumulative return of the S&P 500 of 1,088%. No small achievement.

Getting back to trading, my working hypothesis is that with returns like that, there are a lot of investors, big and small, who follow Navellier's stock picks and who will collectively move his stocks. In order to test this theory, I had to go back and review each and every stock pick Navellier made in the past 24 months, putting it all in spreadsheets, sorting for price, market cap and assorted other distinguishing characteristics and then backtesting for price action immediately at and following his recommendations. This was hard, tedious work, i.e. another so called "secret" of my success. But by Monday night, I had assembled enough data to come to some very clear and convincing conclusions about how Navellier's picks behave around the publication of each new issue of his Emerging Growth newsletter.

Coincidentally (not), his September issue was published after the close on Friday. Accordingly, I knew exactly what to do today, Tuesday morning, how to play his picks for those short term pops I love so much and write about so often on this blog. It worked beautifully. Not every one of his stocks popped, as expected. Most did pop, as expected. A couple popped really big, as expected and my trouble for exchanging a holiday week-end for adding a new weapon to my arsenal of short-term trading techniques paid off handsomely, also as expected.

You call this a secret of success, Allan?

Not so glamorous, nor mysterious, nor even much of a secret. Just a bunch of hard work going after an idea about something that might work and then implementing it upon the ring of the opening bell. And if you see the similarity between this and surfing Insider-Buys for pop candidates, you can move around the board, collect $200 for passing Go and land on Boardwalk.

Before you ask, no, I am not about giving away my work product, my spreadsheets, my conclusions, nor my other short-term trading techniques. But I am giving away inspiration. It's not so much how I do it, as much as it is that I do it. It took me over twenty year's of trading to get here and as I set out in my Profile in the right margin of this page, this all came from an idea I had while driving across country two summers ago. Other ideas have come and gone in twenty years, but this one, for whatever reason the trading Gods decided, this one has stuck.

Find something that works............................AND TRADE IT!

A

NNVC

In my ongoing quest for short-term trading opportunities, I have come across some services that specialize in "reverse merger" opportunities. A reverse merger stock is a stock that becomes public by buying a "shell" public company which is essentially going or already out of business. It is a quick and dirty way for a start-up to go public.

Not surprisingly, this back-door way around traditional IPO's attracts some "substance-challenged" companies. But sometimes it attracts a gem that is just in too big a hurry to get their story out and get funding to go the traditional IPO route. At least two newsletters I've seen recommend reverse merger stocks, as a way of getting in early on unknown, very small cap stocks with potentially great upside. Coincidentally, while looking for biotech stocks that could benefit from bird flu, I found a company NANOVIRICIDES INC (NNVC.pk) which looks like a great candidate for testing out the reverse merger theory. Additionally, if this company gets some publicity, it should trend up every time there's a bird flu media-scare. (The term "nano" has probably exhausted its hype-potential, so we're not counting on any additional value from the nano-name.)

One of my trading partners, Ilene, who has a degree in Pathology, has done some preliminary research on NNVC and has found the science to have some significant potential and has been very impressed with the background of the people joining the advisory board (see links below), as they not only seem highly qualified but in some cases are among the leading scientists in the field. This does not seem to be the typical penny stock, nor the typical reverse merger company.

We are buying a little bit of this stock for long-term holding, even though it is clear that an eleven-cent pink sheet stock is highly speculative and there's no guarantee that any biotech, much less this one, is ever going to appreciate in value or become profitable.

In the spirit of "do your own due diligence," I am providing the the following information on NNVC and highly recommend a visit to their web site before jumping into the ring with this one. The bet here is risking a total loss of your investment against a return of thousands of percent. Worth a roll of the dice? You decide.

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Vietnam Invites NanoViricides to Play Role in Battle against Bird Flu
Monday August 22, 11:01 am ET

NEW YORK--(BUSINESS WIRE)--Aug. 22, 2005--NanoViricides, Inc. (Pink Sheets:NNVC - News), announced today that the Government of Vietnam's National Institute of Hygiene and Epidemiology ("NIHE"), Vietnam's leading institute for the surveillance, control and prevention of infectious diseases, extended an invitation to the Company to help in the battle against bird flu.

The Company will meet with the key scientific persons in this governmental agency as part of the Country's effort to prepare adequately for potential outbreaks of this highly contagious and fatal disease. "NanoViricides has an approach that appears capable of making true viricides...you appear to have a unique technology...the potential for this approach is immense and important, as any outbreaks can be curtailed before they reach epidemic proportions," noted Dr. Nguyen Tran Hien, Director of NIHE. "We are interested in discussing further the potential of developing NanoViricides against the bird flu virus strains."

Dr. Anil Diwan, President of NanoViricides, added, "Our technology has elicited the notice of the senior science community in Vietnam, a country facing an uphill battle against this deadly epidemic. They are proactive in seeking out solutions, and have the support of the world to find ways to ensure that this does not become a pandemic issue. We are honored to join them in this fight."

"The Company is excited to field these commercial opportunities," noted Leo Ehrlich, CFO. "Joint venture work offers a potential for revenues and goal oriented research that advances the Company's core business and operational purpose against specific viral enemies. We will begin a relationship with Vietnam and the surrounding nations that will allow us to advance our technology and address specific issues facing the nations of the world."

About NanoViricides

NanoViricides, Inc. is a development stage company that is creating special purpose nanomaterials for viral therapy. NanoViricides, Inc. has exclusive license in perpetuity for technologies developed by Theracour Pharma for the five virus types: HIV, HCV, Herpes, Asian (bird) flu and Influenza. A NanoViricide(TM) is a nanoparticle that contains an encapsulated active pharmaceutical ingredient and targets it to a specific type of virus. When a NanoViricide(TM) drug particle enters the patient's blood stream, it attacks and immobilizes circulating virus particles. Once this is done, the active pharmaceutical ingredient is injected into the virus by the NanoViricide(TM) particle, destroying it. The company plans to develop novel NanoViricide(TM) drugs first against HIV, and anticipates that it will license the products to major pharmaceutical companies.

This press release contains forward-looking statements which reflect the Company's current expectation regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially and substantially from those projected herein and depend on a number of factors including the success of the Company's research and development strategy, the availability of adequate financing, the successful and timely completion of clinical studies and the uncertainties related to the regulatory process.




Dr. John Rossi, Holder of 14 Key Patents, and Author of over 275 Scientific Articles, Joins NanoViricides, Inc. Scientific Advisory Board
Thursday July 14, 9:33 am ET




"Widely Regarded as a World Leader in Clinical Research for the Treatment of HIV/AIDS and in the Development of Therapeutic Applications of RNA Interference"

NEW YORK--(BUSINESS WIRE)--July 14, 2005-- NanoViricides, Inc. (Pink Sheets:NNVC - News), announced today that Dr. John Rossi, Chairman and Professor, Division of Molecular Biology, Beckman Research Institute and Dean, Graduate School of Biological Sciences, City of Hope National Medical Center, Duarte, CA - http://www.cityofhope.org/gradschool/faculty/jrossi.asp - has joined the NanoViricides, Inc. Scientific Advisory Board.

City of Hope is a Comprehensive Cancer Center dedicated to the prevention and cure of cancer, HIV/AIDS, diabetes, and other life-threatening diseases.

"Dr. Rossi is a wonderful addition to our Scientific Advisory Board. He brings almost twenty five years of basic HIV research experience to our company. He is on the editorial boards of numerous science journals including Antisense Research and Development, Gene Therapy and Molecular Biology and Molecular Therapy, and has extensive experience in many critical areas that will help us develop true HIV killing nanomachines," said Eugene Seymour, MD, Chief Executive Officer of NanoViricides, Inc.

"Dr. Rossi has great expertise in the clinical aspects as well as in the HIV genome silencing aspects which are areas of special interest to NanoViricides. His active involvement as our scientific advisor will accelerate our development programs particularly for our second generation anti-HIV drugs and other nanoviricides," said Dr. Diwan, President of NanoViricides, Inc. and inventor of the underlying technology.

In addition to his responsibilities at the City of Hope, he is also Adjunct Professor, Division of Biomedical Sciences, University of California, Riverside, CA, as well as Adjunct Professor, Department of Biochemistry and Microbiology, Loma Linda University, CA.

Dr. Rossi received his PhD in microbial genetics from the University of Connecticut. His post-doctoral fellowship was at Brown University in Providence, RI.



THE NANOTECHNOLOGY REVOLUTION IN BIOPHARMACEUTICS
A New Era in Targeted Anti-Viral Therapeutics


Imagine having a nano-scale molecularly engineered "guided missile", about the size of a few billionth of a meter, that courses through the blood-stream, seeks its target e.g. a virus particle, attaches itself to the target, and then destroys the target completely.

We believe that nanoviricides are the next great advance in medicine. It is possible that some HIV patients may be "cured" by the drugs developed at NanoViricides Inc. We hope that with further knowledge and new advancements in medicine, many viral diseases will be curable. We hope to spearhead these efforts.


--------------------------------------------------------------------------------

Our President, Dr. Anil Diwan, is a 'Business of Technology' editor to Pi-Tech, the magazine launched at the Global Indian Institute of Technology Alumni Conference in 2005 (Pan - IIT 2005).

Featured articles written and edited by Dr. Diwan

Indian Institute of Technology is one of the premier schools in the world and has been featured on CBS.



NanoViricides Retains Auditor in Preparation of Filing Form 10-SB
Thursday August 4, 11:14 am ET

NEW YORK--(BUSINESS WIRE)--Aug. 4, 2005--NanoViricides, Inc. (Pink Sheets:NNVC - News; the "Company"), announced today that it had retained Bloom & Co., LLP of Hempstead, New York as its independent auditors, in anticipation of filing Form 10-SB and being quoted on the OTC bulletin board quotation system.

Commenting upon the retention, Leo Ehrlich, NanoViricides' Chief Financial Officer stated, "this is a very exciting time for NanoViricides. Retaining PCAOB registered auditors such as Bloom & Company will enable the Company to complete its first ever audit, an important step in our goal of becoming a reporting company. Upon completion of the Company's audited financial statements, we anticipate immediately filing a Form 10-SB to commence reporting obligations with the Securities and Exchange Commission. Becoming a reporting company with the objective of having our stock quoted on the OTC Bulletin Board is a positive step for the company and for our shareholders."




Dr. Cy Stein, Renowned Inventor, Holder of key Patents, Expert in Antisense and RNA, Joins Nanoviricides, Inc.

Monday July 11, 12:11 pm ET


NEW YORK--(BUSINESS WIRE)--July 11, 2005--Nanoviricides, Inc. (Pink Sheets:NNVC - News), announced today that Professor Cy Stein, MD, Head of Medical Genitourinary Oncology and Professor of Medicine, Urology and Molecular Pharmacology at the Albert Einstein College of Medicine, New York and a recognized innovator in the development of drugs based on antisense and RNA interference, has joined NanoViricides' Scientific Advisory Board.
"We are delighted to have Dr. Stein join as a member of NanoViricides' Scientific Advisory Board. We look forward to working closely with him to fully develop the potential of our nanoviricide technology," said Dr. Diwan, President of NanoViricides.

Professor Stein is a pioneer in the anti-sense DNA field and holds a number of key patents. He was a co-developer of Genta Inc.'s Genasense antisense drug that showed efficacy but needs further work. Prof. Stein is co-editor of the journal Oligonucleotides (formerly Antisense and Nucleic Acid Drug Development) and has published over 150 papers in the field.

Prof. Stein is a medical doctor and has a PhD in chemistry. He is an oncologist and was trained at the New York Hospital/Cornell Medical Center and the National Institutes of Health. He was a professor at the College of Physicians and Surgeons at Columbia University for 13 years prior to taking up the chair at the Albert Einstein College.

Prof. Stein explained, "The possibility exists that Dr. Diwan has developed the 'elusive chemical virus' that scientists have been talking about, that is, a chemical nanomaterial, that attacks a virus specifically just like a virus attacks a cell. A virus attacks cells specifically. A nanoviricide, built strictly at the chemical level, does the same, but attacks a virus. It is inspired by how viruses work, and therefore shows a great promise."

"Dr. Stein has strong expertise in the anti-sense approach against the HIV genome. This is of great interest to NanoViricides. His active involvement as our scientific advisor will accelerate our development programs especially for our second generation anti-HIV drugs and other nanoviricides," said Dr. Diwan, President of NanoViricides, Inc. and inventor of the underlying technology.

IMNY

Very late on Friday afternoon it was disclosed the the CEO of I-Many Inc (IMNY) purchased $112K worth of IMNY shares on the open market on Thursday. He paid $1.55/share. This was the 9th purchase of IMNY shares by insiders since August 17th. These insider purchases were made between a low of $1.38 and as high as $1.55.

I bought a decent size chunk of IMNY just before the close, paying $1.49 and $1.50. The stock is trading in the after-market now at bid $1.52, ask $1.57. Last trade was $1.54 and 145K shares have traded on Friday.

I could have banked an easy 3%, but instead am holding over the weekend. The stock traded as high as $1.87 earlier this summer.

A

NVAX pops 45%

August 24th: Director buys 50K shares at $0.97, Some of us follow, buying in at his price $0.97.

August 25th: NVAX announces positive preclincal on its novel vaccine for pandemic influenzia; study shows avian flu vaccine effective.

Stock pops 45%.


A

A Bully with a Gun

This morning I set out at 8:30AM for a hair appointment on the other side of town. Traffic was light and I found myself behind two motorcycles at a stop sign, awaiting traffic to clear to enter a divided highway. Although the speed limit is 55 on this divided highway, vehicles typically travel between 60-70MPH.

The first motorcycle found a hole in the traffic and took off, leaving me waiting now behind one motorcycle. Traffic was heavy for 8:30AM on a Saturday and it took awhile for traffic to clear. Finally, the motorcycle in front of me took off and I followed into the opening in the traffic flow. The motorcycle went right through the medium intersection and into the left lane. I tried to follow, but the motorcycle was not picking up speed. Conscious of fast moving traffic coming up behind me, I checked the right lane, saw it was open and crossed over into it and picked up speed, quickly reaching 60MPH while passing the motorcycle on the right while he was still struggling to pick up speed in the left lane.

Two seconds later, a police vehicle was on my tail, signaling me to pull over. The officer slowly and deliberately got out of his vehicle and strolled over to the passenger side of my car. I rolled down the passenger side window. His first words were, "You think BMW's don't have to follow the traffic rules like everyone else?" Then noting that I had South Carolina plates on my car, he also said, "What are you doing in Washington, we don't drive like that in here."

I asked him what I had done wrong. He asked for my drivers license and registration. He then went on a tirade, telling me how I had committed multiple infractions and wanting again to know what I was doing in this state and how long I would be here. I again asked about what I had done wrong. He finally says I followed the motorcycle into the intersection without stopping then cut over to the right lane to pass him. Before I had a time to respond, he took my documents back to his car.

He comes back a few minutes later with a $510 infraction for, "Negligent Driving." Again, he comments on my being from out of state and wants to know how long I will be here. I am evasive at this point, not knowing what else he is up to. In retrospect, it seems that he expects me to not show up to contest this ticket. I am sure "Negligent Driving" is worth a lot of brownie points back at the station. I am also certain that he will never afford to drive a BMW and I am being penalized for his own failures and station in life. This was personal.

I will lose more money in not trading on the court date then the ticket and an even doubling of my insurance premium would have cost me. I don't mind paying for traffic infractions, I've never contested one before, just sent in a check, guilty. But this one is different. I was singled out because I was from out of state and because I am driving an expensive vehicle.

I suspect the judge will be driving one too.

A

And They Keep On Coming

More I-Buys today:

SFE --> CEO Buys $212K @ $1.28;

ADSX --> CEO Buys $57K @ $2.85;


Bought a bunch of both, out of half already, letting the other half run, will probably be out of both by the close unless there are follow-on I-buys by other officers and/or directors.

A

DSCO

Just in case she knows what she is talking about, I'm raising Ilene's commenton DSCO to my previous blog to a Blog of her very own:

At 8:33 AM, ilene said...

Allan, although you think DSCO doesn't go with anything you do (since you have forgotten all the insider buying from months ago), I think it's a great buy here on what looks to me like an overreaction to fda delays. - Ilene

OSTK

August 11: President/Director buys 20K shares, $1.3M worth @ $41.96 avg price. Stock closes at $43.75 for the day.

August 12: OSTK trading at $47.85, up 10% from previous close.

THEEEEEEEEEEY'RE BACK!

A

One That Got Away

Here's an I-Buy that I didn't take, it was a private placement by Conceptus (CPTS) a few days ago. A group of insiders including the CEO and CFO bought over $500,000 worth of stock at $8.00/share. Three days later the stock is trading at $10.00 for a nice 25% pop. As set out in my previous blog, the opportunities are starting to "pop-up" on my screens.

A

Theeeeeey're Back

With July earnings reporting over, the insiders are back and back with a vengence. That's where I've been the past couple of weeks. If you're willing to try this trading methodolog on for size, August might be the month to get your feet wet.

Real time example: Last night after the close an SEC filing revealed that a Senior VP of Synaptics (SYNA) purchased $260K worth of SYNA at $15.29 per share. Synaptics has fallen 33% in the past few weeks, mostly due to reports of losing their best customer, Apple Computer, representing a signficant portion of their business. This Insider wasn't as gloomy on the stock as the selling shareholders and stepped up to the plate with a quarter million dollars of his own money. This morning, Thursday, SYNA opened at $15.15 a share, up only 10 cents from Wednesday's close. Not a bad bet. SYNA has run to a high this morning of $15.85, a "pop" of 5%.

This is what we're looking for and the time seems right for paying attention to insider opportunities, right here, right now.

A

The Speed of Change, Squared.

In the comments section of my "Just Say No" blog, Greg asks and suggests in part as follows:

"Unless you are traveling frequently, why not use desk top PC's? They seem to be more reliable as well as a bit cheaper...........Maybe you just need to take a vacation."

Today I leave with Ilene for five days in Southern California. We will be taking our business with us, in the form of two notebooks and reservations at a hotel with a very reliable broadband connection. Yes, it is a vacation, of sorts, but if we just have average trading days on Thursday and Friday, the trip will be paid for and we should return home with still larger account balances then we left. That's why we run our business on notebooks and that's why vacations are so much damn fun these past few years. At 1:00 PT we are finished "working" and ready to engage ourselves with local hospitality.

Mobility, redundant systems and technology. Big, beautiful everchanging, technology, challenging our thinking and approaches to trading. New ideas fall with the gentle rain on a Denver walk after dinner, or sail in on the cool ocean breeze on a midnight stroll outside our hotel in Santa Monica. New friends serving dessert in their home atop Malibu as the day fades effortlessly across the quiet beach below. Who knows how ideas take hold, where they come from, why they appear at all?

Trading gets stale if you let it. Sometimes all it takes is a new place, an open mind and the will to succeed; where energy equals the speed of change, squared.

A

Just Say No!

First, my Apple Powerbook's hard drive just upped and died. Two years after I purchased the three-year $350 extended warranty I made my very first call to Apple Service. They couldn't find any record of my extended plan. Someone had misapplied my Extended Service plan to a 12" Powerbook instead of my 17" Powerbook. That was Friday. It took until Monday for Apple to recognize my warranty and let me talk to a technician about my problem. After trying a few diagnostic tricks, Apple sent me out a box to send my PB to one of their repair depots.

Then, the phone call. A technician found a "dent" on my Apple case and Apple decided to void my warranty due to "customer abuse." Not so fast, I went to law school, but perhaps more importantly, I didn't just fall off the turnip truck. Up the Apple chain of command I went and about 40 minutes and a half dozen intermediaries later, finally someone without a script said,

"Hey, we don't know if the dent caused the problem or not, but we think so. Tell you what Mr. Harris, we'll split the $975.00 repair bill with you. But we can't take a credit card, you have to send us a cashier's check before we will repair it."

Apparently Apple didn't just fall off the turnip truck, either.

One day later. I put a Linksys CD into my Sony Vaio to install drivers for my new Linksys Wireless Print Server. Nothing. The DVD-RW drive wouldn't have anything to do with the CD. The CD worked fine with my Toshiba notebook and the Sony drive wouldn't read any other CD's either. So for the first time since buying the Vaio 18 months ago, I call Sony pursuant to my $300 three-year extended warranty.

"Mr. Harris, there's no record of your Sony warranty, did you ever register it?"

"Yes I did, online, the day after receiving the notebook."

"That's no problem, we can register it now......oops, it says it's already registered."

"That's what I said, I registered it 18 months ago."

"Well, it's registered with no information, so I can't update it. I'm going to have to send it over to Contract Administration for manual updating."

"What about my broken computer?"

"Call us back in three business days."

So here I sit, two top of the line machines, two top of the line companies, two broken computers, two expensive extended warranties and two big fat ZEROS in customer satisfaction. Next time someone offers you an extended warranty, answer them with their own words when it's time to live up to their end of the bargain:

JUST SAY NO!


A

Risk

There is an interesting exchange below in the comments section of my Scorecard post about risk. My last contribution to the subject was an admission that I don't know what risk is anymore. And I'm not just talking about risk in the markets, either. A few of you who know a little about my personal life, understand what I am referring to here. Whereas risk used to be the guiding light of measured action, at some point after turning 55 (a Fibonacci number) risk ceased to be a factor in my life.

My Macintosh widget tool defines risk as a noun, "a situation involving exposure to danger." Maybe more illuminating, if I click the widget for it's thesaurus, it generates risk synonyms, "chance, uncertainty, unpredictability, precariousness, instability, insecurity and perilousness." Yes, as Jon Lovitz used to exclaim on Saturday Night Live, "That's the ticket."

In the markets, as in life, there is always the safe way, with limited, knowable, returns and there is always the risky path, with unlimited, unknowable consequences. What is it that causes one in the prime of his life to choose risk? Or is risk simply a continuum upon which we slide from one end to the other, using degrees of desperation as our only directional tool? In the thread below, my protagonist re risk is Ross, a friend of mine for the past 20 years. Ross, an MD, has built an incredible medical business and I was there when it all began. Every step of the way for Ross was steep in risk. Now, twenty years later, tremendously successful, Ross worries about stock risk inherent using insider buys as a sole determinant in investment decisions. Is the nature of that risk so different as the risk Ross took in starting his own medical business so many years ago?

What is the nature of risk, how do we assign value, input, significance to risk in walking through the markets, our lives, our dreams? Is there some objective measure by which we can utilize risk in the decision making process? Or is risk just some subjective cloud of uncertainty, ever-present in the smallest to the largest of our daily life decisions?

A lot of question marks today. I just don't have any answers. One year ago I left what was familiar, what was my life, on a journey that took me to the Pacific Northwest to daytrade stocks for a private hedge fund. The risk I took, the cost I have paid and the new life I have found, just doesn't lend itself to any rational analysis. Fifty-five years (a Fibonacci number) and longing took over. Go figure.

A

Scorecard

Earlier this year I posted a series of Insider Buys, stocks that were being accumulated by company insiders. Although my preference is to be in and out of these in 1-4 days, they also may represent a nice longer term B&H strategy. Quickly navigating through my archives and bringing prices current, this is what the results look like if one were to have bought and held these picks.

Date Stock Price Current Return

1/10 PANL 8.03 12.18 52%
1/12 WIND 11.55 16.95 47%
2/4 CRUS 5.10 6.03 18%
2/11 EDGR 1.33 2.34 76%
3/2 MCDT 3.60 4.51 25%
3/2 CTLM 2.00 2.40 20%
3/4 TELK 18.10 16.39 - 9%
3/23 DNDN 5.70 6.05 6%

AVG = +29.37%
NASDAQ YTD = + 3.8%

The Passion

In the past a market like this one would make me cranky all day. When it went on like this one has, day after day of chop chop, I would be cranky all week, all month at times. Well all things must past and this market too, shall pass.

The DOW was down 101 points today. But I was up, twenty trades in six and a half hours, a good day trading, profitable and fun. But mention daytrading to anyone these days and they are likely to turn up their noses, treat you like a disease, not like you have a disease, like you are a disease. A friend of mine is going through a very nasty divorce. When she told her lawyer she daytraded for a living, a six-figure living, he told her to go get a job waitressing, she'll get a better shake in court. Daytrading is not a real job.

Not a real job?

I make more money daytrading then I ever did buying and holding, or position trading. I make more money daytrading then I ever did as an attorney. I love what I do and I do it well. I curse three-day weekends, holidays where the market is closed. My rhythm is thrown and I become cranky. Take away my trading and you take away my spirit, my raison d'etre.

Do what you love, or love what you do.

A

The Art of the Trade

The few people I know of who are successful at trading all have one thing in common, they have an edge. What is an edge? An edge is a technique, or a special insight, or understanding, or technology that sets one apart from the trading hive. Success at trading doesn't flow from the mundane. It is crafted by developing a special skill or approach to trading that is applied in a consistent, disciplined and objective manner.

I got lucky last week with SFE, $1.10 to $1.58 at it's highs, banking a nice chunk of that rise. But I didn't know ahead of time that SFE was a 40% winner. It was just another Insider-Buy, a system trade, that fulfilled all my criteria for buying and as such, the trade was taken. There have been plenty that don't work that well and some that don't work at all. But as my tedious back-testing suggested, most of these I-Buys that meet my criteria for a short-term trade work, so I take them all. That's my edge with I-buys, a way to collect them early in their public dissemination, and way to match them up against my own filters and a way to execute the trade fast, very, very fast.

I haven't talked much about my other techniques, one of which has been my bread and butter trading tool for two years now. It's the one I describe in my profile and I have yet to figure out a way to disclose it here without compromising my edge. Sorry, but only a few of us can get through that door at once.

My point it that these consistently winning trades don't come from watching Jim Cramer or subscribing to Growth Stock Outlook. They come from technique, from a cultivated edge that sets my trades apart from the ordinary and that doesn't rely on luck as much as discipline in attaining success. SFE was lucky, yes, but it was luck that I made happen by acting in concert with my rules for system trades.

So the art of the trade, simply put, is to find something that works and trade it.

Cramer on Google, July 2004

Editor's note: Google has risen nearly 200% since this article was written.


RealMoney by TheStreet.com
How Google Has Ruined Its IPO Deal
Tuesday July 27, 2004 8:58 am ET
By James J. Cramer, RealMoney.com Columnist

Someone has to say it, might as well be me: If you wanted to do everything you could to kill the Google deal, if you wanted to do everything you could to be sure that you generated the worst deal ever, you would do exactly what Google's done. Let me count the ways.

First, you buck the system, which had finally gotten a lot of the kinks out of it, and make sure that the thing's done Dutch. I know the bonds are used to Dutch auctions, but the unsophisticated public sure isn't. Start the Dutch revolution without me.

Second, you set the price at a level that is the most forbidding to the most people: north of $100. What the heck does that prove? That you intend to be the next Berkshire Hathaway?

Third, you talk about shareholder democracy but then you do the single most anti-democratic thing possible: issue two classes of stock.

Fourth, you wait until the dog days of summer to do the deal when no one's around anyway.

Fifth, you show total contempt for all of the institutions that, like it or not, represent most of the buyers out there, especially now that you price the deal at $100 a share.

Look, I know the process from 1998-2000 was deeply flawed. There was spinning going on, and friends and family and lots of laddering and all sorts of evil that since has been erased or silenced. The main flaw with the system, though, was that you couldn't reset demand on the fly to make it so that there was some sort of elasticity when buyers came in. The underwriters always blamed the SEC for that. If that was the real problem, let's deal with it. But this deal, I mean, can you say fiasco?

In six months, Google's gone from a company everyone wants a share of to perhaps the single-most scorned entity I can recall. Right out of the chute! Amazing.

I repeat: What a fiasco! What a blown opportunity. What a shot-in-the-foot moronic way to go about ruining what could have been a definite shot in the arm for this horrid market.

There. Now I feel better.