As a newsletter writer in this field I think I am qualified to respond on this topic. First, I have never read Zeal so I do not know how it is written. However, looking at COP PW we discussed you buying this before you did and I told you that based on the ratios I thought it was ok to buy. The stock was trading in the 50’s when we discussed this.
This stock went to $70.75 a very nice gain. There is absolutely no way that any professional stock trader would still be in that trade. You need to take partial profits on gains, and trail a stop at breakeven on the balance. Here is an example, lets say you bought it at $58 and carried a $10 stop loss at $48 on the initial position. Once you get a gain equal to your stop which would have been at $68, you sell half your shares, and place a stop at $58 your entry price, on the remaining shares. Now you would have the ability to participate in unlimited profits upward, yet have an exit point that is breakeven on the balance.
After you do this you then move up your stop underneath support points as prices move up. $67.02 became the most obvious support point so that is where most pros would have been out of this. Maybe your initial stop could be less than $10, but whatever it is the logic still applies.
As for Penny stocks, nobody should ever bother with those. That is a suckers game. There is a reason why stocks under $10 have very little institutional participation. One person selling shares can move a chump stock like that down. I got a call on Monday from a client that claimed a stock trading at $1 was really worth $54 dollars. I looked it up and they had revenue of $143,000 for the last quarter and lost $700,000. How could a company losing that kind of money be worth even a dollar? They had only 1.3 million shares outstanding, and no information on how much of that the insiders owned. This had scam written all over it, pump and dump. Yet this client was going to put 100k into this! YIKES!
I get calls almost daily from clients asking about a particular penny stock and “they have inside information…” etc.. Forget about all that nonsense. This may have not been that scenario, but stocks that are that cheap are priced at that level for a reason.
As far as writing newsletters, it is a tough thing to do. You know a couple of things, first there will be some people that will just wait until you are wrong about one thing then pummel you over that mistake.
Second, often people will not fully follow what you tell them, and blame the result on you when if they followed exactly what you said they would have made a profit.
Third, eveyone goes through sub par periods. I had one a couple of months ago in the S&P. That period has been followed by 11 consecutive wins which some people missed who tuned out. They followed the consecutive 3 losses I had, and did not take the 11 consecutive wins that followed. I am sure they have said to someone, well that blah blah blah sure led me astray etc.. In the meantime I am getting very nice calls thanking me for profits that have been made on the 11 win streak from those who stayed with it. I also had someone who was doing a free trial with me on my bond trading service ask to cancel after the service had 3 consecutive wins during their trial. What more could you ask for, yet they were not satisfied for some reason.
All you can do as a writer of a newsletter is make the best effort to produce the best product you can. You have no way of knowing if your clients follow your advice. A sample size of 2 is way too small to be the basis of a conclusion about whether Zeal is a good product or not. Zeal over a large sample size probably does pretty well based on the following they have.
Just the energy call alone if followed could have made someone rich. Now the uptrend in OIL is broken, whether it resumes its upward path is in question.
