Nanalyze

How to Lose Money Investing in Stocks

Everybody has advice for you on how to make money investing in stocks. There’s always that hot stock tip you hear about that promises you’ll make a fortune in the next Microsoft. But how come nobody ever tells you how to lose money in stocks? What if we could tell you a sure-fire way to lose a good chunk of your hard-earned capital? Well, that way would appear to be investing in your money in over-the-counter (OTC) stocks. In fact, if you had invested equal amounts in every one of the 16 OTC stocks we covered in 2013/2014 at the time we first wrote about them, you’d have already lost -44% of your hard-earned money. Let’s take a look at the returns for each of these OTC stocks we warned investors about. We’re going to exclude of course any stock that is trading on a foreign exchange and uses the OTC market as a vehicle for U.S. based investors to buy their shares. Here we go.

 OTC Company Article Today  Return
Sigma Labs (SGLB) Jul-13 0.068 0.072 +5.9%
Champions Oncology (CSBR) Aug-13 1.14 0.5 -56.1%
Solarwindow Technologies (WNDW) Sep-13 1.92 2.01 +4.7%
Quantum Materials Corp (QTMM) Sep-13 0.07 0.195 +178.6%
Nano Labs Corp (CTLE) Sep-13 0.045 0.0052 -88.4%
Liquidmetal (LQMT) Oct-13 0.14 0.136 -2.9%
American Graphite Technologies (AGIN) Nov-13 0.194 0.0117 -94.0%
Makism 3D Corp (MDDD) Nov-13 Suspended -100.0%
Tauriga Sciences (TAUG) Dec-13 0.015 0.0033 -78.0%
Industrial Nanotech (INTK) Dec-13 0.018 0.0079 -56.1%
Rainbow Coral Corp (RBCC) Jan-14 21.5 0.715 -96.7%
Bio Matrix Scientific Group (BMSN) Mar-14 0.006 0.0005 -91.7%
Nanoantibiotics (NNAB) May-14 0.29 0.25 -13.8%
3D Pioneer Systems (DPSM) May-14 0.39 0.0221 -94.3%
Regen BioPharma (RGBP) Sep-14 0.38 0.15 -60.5%
Manhattan Scientifics (MHTX) Nov-14 0.1185 0.0485 -59.1%
-43.9%

Only 3 of these 16 stocks are in positive territory; SGLB, WNDW, and QTMM. Sigma Labs (SGLB) was the first OTC company we highlighted. Since our first article, shares are up +6% after a very volatile ride. Here is our collection of articles on SGLB. We’re not holding our breath on their eventual success. Solarwindow Technologies (WNDW) used to be called New Energy Technologies (NENE). The stock is up +4.7% now that they have changed their name and revamped their corporate image. Again, our articles on WNDW show that nothing merits anything but a highly speculative investment so far. The exception of the group, Quantum Materials Corp (QTMM), is up +178% which is quite a surprise given we haven’t been impressed with their string of broken promise over the years. The Company has shipped 40 samples now to potential customers and yet still no revenues have begun trickling in. QTMM had just $19,439 in cash on hand as of March 2015. Having diluted their shareholders by over 40% in fiscal 2014, they will no doubt have to continue issuing shares to stay alive. Any sign of revenues may merit another look.

If we take out the outlier QTMM, you would have lost -59% of your capital in an equally weighted portfolio of the other 15 OTC stocks involved in “disruptive technologies”. And in a bull market as well! So much for the benefits of diversification. Investing in a simple S&P Index Fund from July 2013 to present would have returned +29% with much, much lower risk. There’s a reason that brokerage firms we use such as Motif Investing don’t allow investors to buy OTC stocks. Going forward, we’ll continue to write about OTC stocks that appear to be involved in disruptive technology in an attempt to steer investors clear from cash burning ventures that lead nowhere and direct them towards legitimate companies involved in disruptive technologies that will generate real shareholder value.

Any OTC stocks you’d like us to look at? Any bad/good experiences with the above 16 OTC stocks? Want to accuse us of being a part of some short conspiracy? Drop us a line in the comments below!

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  • john davis

    Then why not short them all if you are so confident. Did you short any of the stocks on the list?

  • Nanalyze

    Thank you for the comment John. As mentioned in the “About Us” section, we do never at any time short stocks discussed on this site. There are 3 reasons for that:

    1. You cannot be truly objective when analyzing a stock that you inherently believe is a bad investment when you have a short position against it.

    2. OTC stocks are volatile and subject to the whims of emotional investors as a result. To really make money on the short side, you have to be highly leveraged. Volatility makes this a tough game to play.

    3. In theory, we can talk about shorting all we want but in practice, it is very difficult to find a broker that will allow you to short most the OTC stocks we write about.

  • John A

    When QTMM goes to the NASDAQ in the next year will you do another update? A new CFO who purchased 1M shares and Controller we’re hired to do just that. The Bayer GMBH patents we’re purchased by QMC for NHM IP. Quantum Materials Corp released their QDX ™ class of rugged Cadmium-free quantum dots with the highest heat, oxidation and moisture resistance available industry-wide.QDX™ Quantum Dots do not degrade under the high heats used in application to film, silicon and polymer and allow for creative LCD display and LED lighting engineering as well as lowering protective barrier film costs. Quantum Dot production is underway on Quantum Materials’ patented continuous-flow production system and assessment quantities have already shipped to the Company’s largest potential customers.

    • Nanalyze

      Thank you for the comment John. Yes, if QTMM goes to NASDAQ we’ll certainly do another update. Now is the time for QTMM to demonstrate their technology is commercially viable by showing some revenues. A product could have the most superior properties imaginable, but not be able to sell in the commercial marketplace for whatever reason. As soon as we see any sign of revenues from QTMMM, we’ll take another look and post an update.

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