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Bottom-Fish Roadmap


The Bottom-Fishing System targets juniors that are either out of favor or are missing key elements and which have a "bottom-style" chart pattern.

We analyze bottom-fish in the context of multiple macro and micro cycles. Among the macro cycles we have the economic cycle (global trends), the commodity cycle (metal price trends), the market cycle (overall junior market trends), and sectoral cycles (trends within thematically linked groups of juniors). Among the micro cycles we consider are the company life cycle (insider incentive), the story speculation cycle (company fundamentals) and the seasonal cycle (internal factors such as information flow and external factors such as tax loss selling or institutional liquidation). Our coverage of the Bottom-Fish System is available through the following links:

Link Bottom-Fish Roadmap
Active Bottom-Fish Recommendations (List) This link lists in alphabetical order all open bottom-fish recommendations. This includes companies still listed as buys, companies that have been converted into Spec Cycle Holds, and companies for which partial sells have been issued. This list shows how much a recommendation is up or down. The color shading indicates if the stock is above, within or below the recommended accumulation range. Click on the image to get the most recent recommendation status.
Active Bottom-Fish Recommendations (Full Report) This link produces a monster web page which includes a list of all active bottom-fish recommendations followed by a recommendation status report for each company. Unless you plan to print a couple hundred pages, it is better to access the individual Recommendation Status reports from the Active Bottom-Fish Recommendations (List) by clicking on the image.
All Recommendations This link provides a list of all formal bottom-fish and spec value hunter recommendations in chronological order from most recent to oldest. By clicking on the company's name you will get the KBFO Profile page. By clicking on the image next to the name you will get a Recommendation Status snapshot for that company. The snapshot contains the status of the recommendation as of the "updated" date.
Daily Bottom-Fish Action Report This page contains short term market charts, all bottom-fish comments publishing during Sunday through Saturday of the current week, various bottom-fish market activity tables such as volume leaders, gainers and losers (maximum 20 per group), all bottom-fish recommendations, and any new bottom-fish highs or lows made during that week. The comments are presented in order of newest to oldest so KBFO Members who check this report on daily basis can spot new comments quickly. Comments within the Daily Bottom-Fish Action report disappear the following week, but will show up in the next weekly Bottom-Fish Action report when it is published. KBFO Members are sent an email notice when a non-daily Bottom-Fish Action report is published.
Weekly Bottom-Fish Action Reports To assist bottom-fishers we publish brief comments on specific bottom-fish which show up without notice in the Daily Bottom-Fish Action Report. At the end of the week these comments get posted separately to the web site so that you can find them through the Company Profile. We also publish a "weekly" Bottom-Fish Action Report which includes all bottom-fish comments made during that period along with market activity tables. These comments may include "confirmations" of the bottom-fish recommendations or changes to them such as Partial Sells, Closeouts, and priority upgrades/downgrades. They will also include any Recommendation Status updates which are part of a company specific Bottom-Fish page accessible through the image link.
Trackers When there is a major corporate development affecting an open Bottom-Fish or Spec Value Hunter recommendation we will publish a Tracker to the web site and send an email notice to all KBFO Members. We will also publish a Tracker when we write a detailed analysis with lots of graphics. This may occur after we have completed a property visit, or because we wish to explain the story in detail.

Bottom-Fish Recommendations are periodically issued in large batches when we identify a bottom-fishing window, usually at the end of a major market cycle. The most recent such window occurred at the end of 2008 when we closed out older bottom-fish recommendations and released more than 100 new bottom-fish picks during the last week of 2008.

Bottom-fish are recommended for accumulation in certain price ranges and assigned a priority of top, medium or low, with companies trading below $0.10 classified as "extreme risk". The basic strategy is to buy and hold a bottom-fish until it starts to move up, and then focus on the selling strategy. We do not have target prices for bottom-fish recommendations because these are very speculative companies clouded with uncertainty in terms of both timing and fundamentals, but we do pick them on the basis of an analysis that the 90% downside risk is offset by 1,000% upside potential.

We issue bottom-fish sells as "partial sells" in 25% increments while we still like the company, and "closeouts" when we give up on them. Gains and losses are calculated using the price at the upper end of the recommended accumulation range. When a bottom-fish rises above its accumulation range and we think it will not return to those levels unless the story speculation cycle driving the price increase has fizzled, we convert the bottom-fish status to a "Spec Cycle Hold 100%", a signal to ride the position in anticipation of higher prices. If we really like the fundamentals unfolding, and can quantify the timing and basis for higher prices, we will issue a Spec Value Hunter recommendation that is distinct from the open bottom-fish recommendation.

Bottom-Fish Recommendation Key
Top Priority Bottom-Fish Buy Confirm Top Priority Buy Spec Cycle Sell 100%
Medium Priority Bottom-Fish Buy Confirm Medium Priority Buy Spec Cycle Sell 75%
Low Priority Bottom-Fish Buy Confirm Low Priority Buy Spec Cycle Sell 50%
Extreme Risk Bottom-Fish Buy Confirm Extreme Risk Buy Spec Cycle Sell 25%
Spec Cycle Hold Confirm Spec Cycle Hold Closeout Sell 100%
Bottom-Fish buy recommendations are based on a strategy which involves buying stocks while they are quiet and selling them off in stages when the stock launches into a speculation cycle. The objective are 500% or better gains during a bottom-fish cycle whose duration can be many years. New bottom-fish buys are recommended as buys within one of a series of fixed bottom-fish buy ranges such as $0.10-$0.19, $0.20-$0.29, $0.30-$0.49, and so on because bottom-fish by nature often have poor liquidity and need to be accumulated over time within the bottom-fish range. All gain/loss calculations use the upper limit of the buy range as the cost base. The priority status of "top", "medium" and "low" reflects our sense for the timing urgency at the time of the initial recommendation with regard to the launch of a speculation cycle. The "extreme risk" priority is reserved for bottom-fish buys priced below $0.10. If circumstances change we may issue priority upgrades or downgrades for an open buy recommendation that is still within the bottom-fish buy range. Periodically we will issue a "confirm" recommendation to signal that the open bottom-fish buy recommendation remains in force. If a bottom-fish rises significantly above its buy range for fundamental reasons we interpret as a speculation cycle, we will convert the buy recommendation to a "Spec Cycle Hold 100%" status. During a speculation cycle we will may issue "partial sells" in increments of 25% at stages where we think the stock has overshot its fundamentals or faces a period of timeline dictated sideways movement. A bottom-fish cycle closes when either the partial sells add up to 100% or when a failed cycle is closed out with a Closeout Sell 100% recommendation. The latter is sometimes issued when the company has established a bottom well below the recommended accumulation range. At times we may issue a new bottom-fish buy at these levels at the same time as we close out the losing bottom-fish cycle. There is no relationship between Bottom-Fish and Spec Value Hunter recommendations. However, the rational speculation model on which the Spec Value Hunter recommendations are based is sometimes used to determine the timing of partial sells for bottom-fish cycles. It is also possible that at times we will issue a "partial sell" relating to the bottom-fish cycle at the same time as we issue a spec value hunter buy recommendation. This apparent contradiction is possible because the bottom-fishing strategy involves a long time horizon with a very large but unquantifiable gain objective, whereas spec value hunting involves shorter time horizons with specific price targets.

The Shore Gold chart and recommendation history table below are an example of the Bottom-Fish System in operation. We embed recommendation icons within our charts to make it easy to see the timing and nature of our recommendations. The $ icons represent financings done by the company while listed on the TSXV (the TSX does not publish this information). The size of the $ icon reflects financing size range; financing details can be found in the capital section of the company profile.

Bottom-Fish Cycle Opened:May 24, 2002Closed Out:Feb 10, 2006Buy Range:$0.76-$1.00
Interim High:$8.35735%12/16/2005Low:$0.60-40%7/30/2002Cumulative Return:473%
Date Price
Recommendation Action Net
Cash
Net
Stock
Gain New Status
5/24/2002 $0.80 New BF MP Buy $0.76-$1.00 Buy 1,000 @ $1.00 $0 1,000 0% BF MP Buy $0.76-$1.00
5/22/2003 $0.96 Priority Upgrade to Top
$0 1,000 -4% BF TP Buy $0.76-$1.00
10/15/2003 $1.53 New Spec Cycle Hold 100%
$0 1,000 53% Spec Cycle Hold 100%
2/23/2005 $5.09 Spec Cycle Sell 25% Hold 75% Sell 250 @ $5.09 $1,273 750 409% Spec Cycle Hold 75%
8/17/2005 $5.29 Spec Cycle Sell 50% Hold 25% Sell 500 @ $5.29 $3,918 250 424% Spec Cycle Hold 25%
11/1/2005 $7.31 Transfer 0.64 SGF:1 KRT Buy 512 @ $1.95 $0 512 274% Spec Cycle Hold 100%
2/10/2006 $7.26 Spec Cycle Sell 25% Hold 0% Sell 250 @ $7.26 $5,733 0 473% Closeout Hold 0%
2/10/2006 $7.26
Spec Cycle Sell 100% (KRT) Sell 512 @ $7.26 $3,717 0 272% Closeout Hold 0%
Summary Updated:
Current Status:Closeout Hold 0%

The above information along with much more detailed corporate information is included in the Shore Gold Company Profile which is either accessible through a link in any KBFO list, or through the "Select Company Profile" drop down menu at the top of every KBFO web page as show below. Every KBFO featured company has a profile updated daily on the web through a database maintained by KBFO.

 
 

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