Walker's Manual of Unlisted Stocks - Harry Eisenberg

[ageofsocrates]

Is there any other newsletter that tracks OTC companies? Appreciate any guidance...

[oddballstocks]

ageofsocrates,

I'm sure they are but I'm not aware of any that follow some of the unlisted value micro-caps.  If there are it would almost be a crime considering that some of these stocks don't see more than an order a month at most.

One stock I own Micropac (MPAD) is very illiquid although they do file with the SEC.  They were trading in the $5 range last year and the stock was mentioned in the AAII newsletter as an example of a net-net stock.  The stock ran from $5 to $10 in three days on about 20k of volume.  Right now there's a bid of $5.10 and an ask of $20,000.  I'd hate to be the sucker that punches in a market order on that one.....

[ageofsocrates]

As a bank dealer who places clients orders on OTC stocks, thats definitely an issue. Buffett had invested in micro caps from his earlier days as such areas are inefficient and have v little analyst coverage. I believe Walker's manual was actually mentioned as a source of ideas that Buffett referred to in "Snowball". Would welcome any thoughts on this...

[oddballstocks]

I don't remember the reference in the Snowball but it wouldn't surprise me.

The Walkers Manual is a great book, I have the 03 edition, and the 1999 Penny Stock edition.  I've found that a lot more of the stocks in the Penny Stock Manual aren't tradable anymore, many more than the unlisted stocks.  I think the reason so many unlisted stocks are still around is that they can operate under the radar without much of an issue.

I think most people who've gone through the book and looked at this companies would agree with your assessment, this is an inefficient area of the market.  Not only is there little to no analyst coverage, most of the time there is little to no information period.  Most of the time you need to buy a share of the company and then call (and usually talk to the CFO) to get an annual report mailed out.

This is a very cool area of the market, I'm having a lot of fun researching these companies.  You need to be innovative to find information, real estate tax records, creative Googling.  This isn't your standard look at a few metrics and move on type of deal.