As I reported previously, I got attracted to Envoy Capital Group Inc. (Public, NASDAQ:ECGI) during my day trading days. And like a stupid investor, rather than taking a loss and freeing up the capital to invest elsewhere, I hung on to it in the hope that it will eventually give me even a small profit.
Well, while I wouldn’t recommend you do the next step either, but as the bottom fell out of the stock, I bought more in order to lower my overall cost, hoping to reach my goal, because it was clear that the stock had fallen so much that it would never reach its 2004 level. Now it does not always happen, but when the stock jumped, I made some profit by selling it but that meant that I was no longer able to lower my total cost of acquisition of the original stock. Actually, I did that three times as the stock was about to be delisted from NASDAQ and was trading around $0.79.
Today when the company turned a profit for its 1Q fiscal 2011 and the stock jumped almost 40%, I sold all the shares that I had. The net result is that I have essentially broken even. For all I know like WAVX this could be the rally that will take it to its glory, but this company is so small, the details about their business sketchy, and trade volume tiny, that the best thing is to avoid this stock like a plague. I wish I had done this a long time ago, but lesson learned. Now I have the money to invest some place else.