Is the OTC Market dead? That is the question a lot of traders and investors are asking themselves right now.
Most had assumed that things would pick up after the new 15c-211 rule took effect at the end of September. The purpose was to clean up the OTC and make it difficult to practically impossible to trade stocks of companies that weren’t fully reporting.
We would have bet money this to be the case as it left the OTC stocks that could be bought were those with financials. These are the quality OTC stocks that have a better chance of success over the long run.
However, the end result was to actually drive investors away and remove a great deal of speculation. The reality is that markets go through cycles. There are bear and bull markets. Many were saying that crypto was dead after Bitcoin rose to just under $20k in December 2017 and then drop to $3100 a year later. Today, we are just under $60k with new highs possible before New Year’s.
Those that abandoned crypto in 2018 are kicking themselves today. Don’t make the same mistake when the OTC gets hot again.
How to Succeed in Investing
We have preached over and over again to our subscribers a few key mantras when it comes to investing.
- Never pigeonhole yourself to just one market. Trade all markets – OTC, NASDAQ, Big Boards, options, and crypto.
- Always book profits along the way.
- Never fall in love with ANY OTC stock. Remember, Amazon didn’t start on the OTC. The chances of your favorite OTC stock becoming the next Amazon are next to nil.
While we are not fans of CNBC Clown Jim Cramer, he is correct when he says there’s “always a bull market somewhere.” Focus on what’s working. Do more of that and less on what’s not.
If you follow us here at Insider Financial, you know that we do not harp on the same names over and over again. Investors need to be nimble and understand that investing is all speculation. It’s about making money, nothing more. It’s not about being right or wrong. It’s not about arguing with a troll on Twitter, StockTwits, or iHub about a particular stock.
In the end, everything comes down to your P-n-L. The markets are a fickle beast and there are times where you make money, make a killing, lose money, or get slaughtered. The key is controlling your emotions and learning money management. It’s a game of survival during difficult markets so we can reap the rewards in the bull markets.
There are Still Opportunities
Last week, our biotech analyst Chris Sandburg profiled Todos Medical (OTCMKTS: TOMDF) on November 23 at $.045 a share, which you can read here. On Monday, TOMDF hit $.1047, good for potential gains of 132% in 4 days!!
Now, this isn’t the 10 or 20 baggers we were capturing last November to February as you can see our track record here; however, in this OTC market, you can’t be greedy. You see, there are still opportunities in the OTC Market. It’s not dead. You just need to be looking for the right OTC stocks to play.
Focus on Your Plan
What we look for here at Insider Financial for our subscribers is the right setup. If a stock doesn’t meet our criteria, we don’t bother. Here’s the ideal setup:
- News/press release
- Low float
- Low market cap
- Little to no debt
- High % of the float is short
Right now, there are fewer opportunities on the OTC Markets and more opportunities on the NASDAQ as we said in a recent video.
Longeveron Inc (NASDAQ: LGVN) is a perfect example. This clinical-stage biotech develops cellular therapies for aging-related and life-threatening conditions. The company’s lead investigational product is the Lomecel-B, a cell-based therapy product that is derived from culture-expanded medicinal signaling cells that are sourced from the bone marrow of young, healthy adult donors. It is conducting Phase 1 and 2 clinical trials in various indications comprising aging frailty, Alzheimer’s disease, metabolic syndrome, acute respiratory distress syndrome, and hypoplastic left heart syndrome.
The price spike came after the company announced that the US Food and Drug Administration (FDA) had granted Rare Pediatric Disease (RPD) designation for Lomecel-B for the treatment of Hypoplastic Left Heart Syndrome (HLHS), a rare and life-threatening congenital heart defect in infants.
LGVN checked all our boxes.
- FDA approval was announced at 8 am on November 18.
- Float of just 2.91 million shares.
- 7.84% of the float short.
LGVN opened at $3.72 on November 18 and ran to $45 on November 24 for potential gains of 1109%!!
THE FINAL NOTE
As you can see, there are still plenty of opportunities for investors. You just need to know where to look.
Buy when there’s blood in the streets like Warren Buffett, but not every OTC stock will come out a winner. Most are permanently broken and investors are down too much to ever make a meaningful profit.
This is why it’s important for investors to be looking for stocks that have yet to make their explosive move. There are plenty of opportunities, and we take our time to monitor hundreds of stocks to buy each week looking for the best alerts for our subscribers.
Remember, all you need is one or two big winners to crush the market averages.
As always, good luck to all (except the shorts)!
WHEN INSIDER FINANCIAL HAS A STOCK ALERT, IT CAN PAY TO LISTEN. AFTER ALL, OUR FREE NEWSLETTER HAS FOUND MANY TRIPLE-DIGIT WINNERS FOR OUR SUBSCRIBERS. WE SPECIALIZE IN FINDING MOMENTUM BEFORE IT HAPPENS!
Disclosure: We have no position in any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.
Image by Mike Cook from Pixabay