THE HACKETT GROUP, INC. & DURECT CORPORATION

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

And so, the bull rally continues, for no real reason other than great spin. We still believe that the markets will test new lows. When? Good question, although we thought we would be there by now. The one thing we do know is that bull rallies in a bear market have ended badly, and this one looks to be no exception. And no, we do not believe that this is the start of a new bull for the simple reason that nobody still has a clue as to the depth of the losses at all of the “too big to fail” financial institutions. There have been too many smoke and mirror tricks perpetuated by the Fed and the Treasury to get any true sense of those losses. This, plus over half a million monthly job losses, gives us pause to get overly enthusiastic. You hear gurus say that the jobless rate is a lagging indicator. Hey, when over 600,000 people are losing their jobs every month, that is not a lagging indicator, it is a leading indicator.

Here are the headlines since the last Newsletter about companies in the Current Portfolio; dates in parentheses are when we first recommended them. We are not giving updates about companies on the Endangered List, unless we feel the news to be highly significant.

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CSP, INC. & THESTREET.COM, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

No doubt about it, March was a fun month for the bulls. Even much of our decimated Current Portfolio got a lift from the bottom of the abyss, even some that are on the “Endangered List”. However, our optimism for the next several months is still restrained, to say the least. We still feel that new market bottoms are on the horizon, and we hope that the blow-off comes soon. It would make future planning a lot easier. Why are we still pessimistic? Think about what really triggered the recent bullishness. The CEOs of Citi and Bank of America said their banks were profitable in January and February, though that was stretching the truth. Then, the Fed sustained the rally by doubling its balance sheet, followed by the Treasury Secretary with his smoke and mirrors plan to fix the toxic assets problem. So, in sum, the market had a surge based upon spin from the same guys who got us into this mess. We will feel more comfortable once the markets begin to rally on better earnings, which is what they are suppose to do.

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ISILON SYSTEMS, INC. & 02MICRO INTERNATIONAL, LTD.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Since the last Newsletter, we were able to close one position for a gain.

REWARDS NETWORK (1/20/09). Closed position 3/11/09 at $3.30 for a 56% GAIN.

Shortly after reporting some very good numbers at the tail end of February, Rewards Network had a nice pop upward. It also probably helped that this is the type of company that should do well in a recession/near depression (pick one). We’re happy to get a nice gain during the current mess.

For the last several months, we have said where we feel the markets need to drop before the carnage is nearly over – 6000 to 6500 on the Dow, although 5800 on the lower end looks possible, and 1000 to 1200 on the NASDAQ. Both the good and bad news is that we are much closer to those estimates. We wish this wouldn’t be the case, but, in order to get serious buying back into the markets, investors must feel that the lows have been reached. And, once again, our own Current Portfolio remains battered and stagnant while all of this crap continues. We now have over 100 open positions, of which about 25 are on the “Endangered List”, both of these totals are at all-time levels since we started publishing close to thirteen years ago.

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OPNEXT, INC. & VIRAGE LOGIC CORPORATION

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Two more weeks and even more murkiness. But, as we said in the last Newsletter, and in others, the bottom of the carnage is getting closer. We are still thinking 6000 to 6500 on the Dow and 1000 to 1200 on the NASDAQ. One average we have not mentioned, lately, is the Russell 2000, the measure of small caps, which, a few days ago , hit a nearly six-year low when it dipped below 400. Last May, only nine months back, the Russell stood at around 750. Pretty sobering stuff, huh? It would be of immense help if people in Washington stop “helping” the situation by throwing money all over the place, but, hey, that’s what they do best.

And we hate to keep on saying this, but, yes, our Current Portfolio keeps getting beat up along with the rest of the market. Unfortunately, many babies are being thrown out with the bath water, to use an old hackneyed phrase.

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TOMOTHERAPY, INC. LIGAND PHARMACEUTICALS, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Since the last Newsletter, we closed two more positions, one for an okay gain and one for a nasty loss.

SIGA TECHNOLOGIES (8/20/07). Closed position 2/13/09 at $5.16 for a 54% GAIN.

DIGITALFX (12/5/07). Closed position 12/5/07 at 28 cents for a 88% LOSS.

SIGA managed to squeak by our target range when BARDA, an arm of the HHS Department, issued a presolicitation for acquisition of a smallpox antiviral. We closed DigitalFX, which had been on the “Endangered List”, when it moved to the Bulletin Board.

Our new President is one of the most intellectual people ever elected to the office, safe to say he’s in the top five. However, when at his first news conference he stood up and said “only government” can fix the problem, he unintentionally exacerbated the mess. Many of us feel that government has been the major problem. At some point, free markets, or what’s left of “free” must be allowed to work relatively unencumbered, or this Near Depression will just get worse; that’s the real lesson of the 1930s. Mr. Obama and company truly believe that massive spending is the answer, but, truth be told, we need massive tax cuts. If the President had had any economic or business experience, he would know that.

Now, there may be a bright light in all of this. We really are getting closer to market bottoms. Our best guess is that when all is said and done, we could see Dow at 6000-6500 and NASDAQ at around 1200-1250. And yes, in the meantime, expect head fakes or bear market rallies. And, once again, our Current Portfolio, is pretty much unchanged from a few weeks ago, which is nothing to brag about.

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AUTHENTEC, INC. & SUPERGEN, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

The good news is that the markets are pretty much at the same places they were at two weeks ago. That’s also the bad news. We feel the markets are still far from the bottoms that they need to reach; you know, the kind that make grown men and women weep openly. Until this happens we cannot have a new and sustainable bull market. Propping up the markets, presently, are headlines about the various government bailouts, but, eventually, markets must move on economic and earnings news, which have been awful. When do the true bottoms set in? Our best guess is between now and the end of May, when the worst of the jobless reports are behind us, hopefully. In the meantime, beware of bull head fakes. And yes, our Current Portfolio is still in shambles, so, patience, much patience, is in order.

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REWARDS NETWORK, INC. & MAKEMUSIC, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Since the last Newsletter, we closed another position, for a nice gain.

ORBCOMM (12/5/08). Closed position 1/9/09 at $2.93 for a 65% GAIN.

Orbcomm’s stock got a nice boost after announcing a distribution agreement with Lloyd’s Register-Fairplay, and the 65% gain is a nice relief in this market.

If you want an indication on how the markets will probably go over the next few months, keep an eye on the weekly and, especially, the monthly jobless numbers, which are suppose to be a lagging indicator. However, when jobless claims are rolling out at over half a million a month and more, this is not a lagging indicator, but a leading indicator. It is highly doubtful that we have seen the market bottoms, despite what you hear from the TV talking heads, but it is looking more likely that we could be there by the end of April. In the meantime, beware of bull head fakes. And yes, once again, our Current Portfolio still looks as if it was shot from a cannon, although a few of our picks are showing signs of life.

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AETRIUM, INC. & ENDWAVE CORPORATION

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

HAPPY NEW YEAR READERS,

Since the last Newsletter, we closed another position for a gain.

ARQULE (12/5/08). Closed position 12/19/08 at $4.63 for a 52% GAIN.

We hated closing ArQule at only a 52% gain because, in a better market, it probably would have done much better. The stock got a nice lift on news of a licensing pact with Daiichi Sankyo who paid the company a $60 million cash upfront licensing payment.

We wish to be more enthusiastic as 2009 starts, but the realities dictate restraint. A lot of gurus have said we have seen the bottoms, based upon past charting histories. Trouble is they all seem to have overlooked some starking contrasts. In other troubled times we had a housing industry, a car industry, and a banking system. Right now, these barely exist. So be wary of the bulls, for at least the next several months. Yes, the market may get that “Obama Bounce”, but it very well may be short-lived. The one thing that could really start a new bull market at this point is massive tax cuts, but we haven’t heard anything come out of Washington, yet.

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AXT, Inc. & Market Leader, Inc.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Since the last Newsletter, we closed one position for a nice gain.

GUIDANCE SOFTWARE (11/5/08). Closed position 12/5/08 at $4.41 for a 57% GAIN.

What’s this?!!! A 50%-plus gain in this market? We have no clue as to what propelled Guidance Software, but we’ll take anything right now.

As we end this year, we are less optimistic than we were a year ago. However, there may be a silver lining. Once the markets begin to get some good news, expect them to scream, really scream, for the simple reason that there are literally trillions of dollars sitting on the sidelines; and, to be trite, it is burning holes in a lot of impatient pockets. Our Current Portfolio could use some of it, also, since it has reached a new milestone. We now have 96 open positions, an all-time high in our 12-year history, of which nearly 20 are on the “Endangered List”, also a record. Ya gotta believe 2009 will be better than this.

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ORBCOMM, INC. & ARQULE, INC.

***We no longer follow the companies mentioned in these backdated newsletter issues. These samples of past newsletters are generated to give you an idea of what you can expect when you subscribe. Please do not use any of the information contained in the samples below as current advice. If you would like to purchase a newsletter subscription, please click here. ***

Hello Readers,

Finally! The President-elect stepped up and it worked, at least for a while. If the “Obama Spurt” is indicative of the future, then maybe better days are ahead. We can only hope. Anything has to be better than this. A little over three months ago, the Russell 2000 small cap index was at 754; it is now hovering around 450. You do the math. Rarely have we seen an index lose that much value in so short of a time. And, of course, most of the picks in our Current Portfolio are still reflective of the total carnage. Don’t expect a major Santa Claus rally, unless the heavens open and the skies rain gold dust and oil. We are going to need a little, or a lot, more patience.

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