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Where Is the Market Going? Dear Mr. Berko: I'm told there is a very private banking club of exactly 60 imperial Swiss financiers, none of whose members took any losses in the recent world economic downturn; they knew well ahead of time that the Dow Jones industrial average …Read more. IRA and Future Taxes Dear Mr. Berko: My 70-year-old husband recently passed away, and I am the beneficiary of a $623,000 individual retirement account (statement enclosed), but I don't know anything about stocks. The broker wants me to sell all the stocks to put the …Read more. Variable Annuities and the S&P 500 Dear Mr. Berko: My sister is 42, and I'm 46. We have a $110,000 certificate of deposit we inherited from our parents. It pays 4 percent and matures next month. Our uncle is a stockbroker and has recommended that we invest $55,000 in an AXA variable …Read more. Thoughts on myRA Dear Mr. Berko: I have a bachelor's degree in history and a master's in sociology. I teach at a public school and made $39,000 last year. My wife also has a college degree. She is a waitress at a nice restaurant and makes about $25,000 a year. My …Read more.
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Penny Stocks

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Dear Mr. Berko: I used to trade penny stocks, and in the past 12 years, I've lost about $100,000. I had a one-year subscription to a penny stock tout sheet service called (name omitted) and made good money with him last year. Now he's out of the penny stock business and only emails a monthly list of 10 stocks selling under $5. His new service just recommended the following 10 stocks, and this time, I'd like your opinion before I buy any of his recommendations. I know I'm a cheap stock junkie, but I'm an educated business man with good professional credentials and a good husband and father. Some men spend their money on costly golf vacations, exotic hunting trips, gold jewelry, fancy cars, expensive wines, etc. I like the thrill of gambling on cheap stocks, and I'd like to roll the dice. So please don't tell me I'm a fool. And please tell me which of these 10 (enclosed) recommendations you would buy. — S.R., Oklahoma City

Dear S.R.: You're a fool. Penny stocks and cheap stocks appeal primarily to investors with short attention spans who were breastfed till they were 4, never had girlfriends in high school, perspire easily and have ED. And according to Lloyd Blankfein, one of the world's most loved investors, there's a very high degree of "early onset dementia" among low-price stock investors over 50 years of age. So make sure that your wife has a durable power of attorney if you are nearing 50.

Westell Technologies (WSTL-$3.49) is a $189 million revenue broadband access solutions company. WSTL has zero debt, 68 million shares out, $1.36 in cash per share, a book value of $1.62 and a net profit of 22 cents per share. While 2012 revenues and earnings will be lower, the Street seems to like the stock.

Wet Seal (WTSLA-$3.76) is a 500-plus location retailer that in 2010 sold $561 million in apparel and accessories to teenage girls and contemporary women.

WTSLA has zero debt, 100 million shares out, $1.82 in cash per share, book value of $1.82 and should earn 22 cents in 2012 on 12 percent higher revenues. Some hedge funds are nibbling.

Force Protection (FRPT-$4.42) is a $662 million revenue company that designs and makes blast- and ballistic-protected vehicles for the Mafia, the Mexican drug cartel, members of Congress and certain U.S. corporate executives. FRPT has no debt, 68 million shares out, $2.27 in cash per share and a book value of $4.91. FRPT's revenues should grow 14 percent next year and earnings might double.

Kopin (KOPN-$4.56) is a $131 million revenue company that makes flat-panel displays and gallium arsenide chips/wafers for communications and digital imaging applications. KOPN has zero debt, 65 million shares out, $1.59 in cash per share and a book value of $2.72 and earned 14 cents last year. For 2012, revenues might rise to $157 million, and earnings could rise to 22 cents. Could be takeover material.

Tuesday Morning (TUES-$4.45) is an $830 million revenue retailer selling discounted, upscale home furnishings, house wares, gifts and related items through 850 stores across the U.S., TUES has $14 million in debt, 43 million shares out, only 15 cents in cash per share but a book value of $6.43. This coming year, revenues should grow by 6 percent, and net income might increase from 25 cents to 46 cents per share. Good business model.

I've never heard of a tout sheet that only emails subscribers the names, symbols and prices of 10 cheap stocks per month. It's probably run by a high school geek who bought a huge mailing list and trolled the Internet for customers then offers recommendations for $99 per year. But you know what? This guy has recommended some interesting issues.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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