Ask a Stupid Question…

Have an investment-related question, and embarrassed to not know the answer? A question about what the heck Stock Gumshoe does? Today's your lucky day!

Have a question in mind that you think is so dumb you’re embarrassed to ask it?  That’s what we’re here for today!

This bonus post was inspired by a reader who wanted to know “where to ask a dumb question” here on Stock Gumshoe… and while his question was not actually stupid, and I’m happy to see questions pop up in our comment threads anywhere on the site, I thought it would be a great idea to open the floor and be more welcoming for the shy, the embarrassed, or, yes, even the uninformed.

So this is a no-judgement zone… smart people do things we’d call “dumb” all the time: Warren Buffett didn’t invest in Google in 2004, Albert Einstein married his cousin, and I just had to go back and double check that I didn’t call him Alfred Einstein (which I’ve done before, in print).  So if you have that question that you can’t ask your stockbroker or your brother-in-law or Twitter without feeling like a dummy, let ‘er rip by submitting it below.  I’ll be nice… and we might all learn something.

And yes, the SEC is always watching, so I must remind you that I can’t give personal investment advice… but I’ll try to share whatever opinion or answers I can provide to any investment-related question you’ve got, though if we end up with a lot of them it might take me a little while to answer thoughtfully.

So please, let your questions fly using the friendly little comment box below… and thanks for being the best readers in cyberspace!

(I will moderate the discussion just to make sure we don’t get too much profanity or offensive stuff, or personal attacks, but I’ll use a light hand — you can be mean to me if you like, just don’t be mean to any other participants.)

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Bob Morazes
Irregular
Bob Morazes
May 18, 2018 5:27 pm

why doesnt some one expose these Money Press con artists?

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toff
Irregular
toff
May 19, 2018 3:35 am
Reply to  Bob Morazes

Stick around, this is the place where they’re exposed. I agree, most of their stuff is pure crap.

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Jason
Member
May 18, 2018 5:32 pm

I’m trying to assess the opportunity for an investment in Promis Neurosciences. They are a pre-clinical stage biotech company you have covered, who claims to be developing the first effective treatment for Alzheimer’s. Here are some factors that I am trying to make sense of:
1. Current share price: $0.30
2. Shares outstanding: 246 million
3. Recently raised $7M which will cover expenses through the 1st half of 2019
4. Phase 1 trials for their leading Alzheimer’s drug are expected in 2019
5. Per Promis, the current cost for Alheimer’s treatment in the US is $500B and is expected to triple in 10 – 15 years

Here are my questions:
1. How much more money will Promis need to raise to get to Phase 3 trials and beyond?
2. Are there ways they may be able to raise capital without issuing tens of millions of shares for mere pennies?
3. They claim to be targeting a Nasdaq listing in 2018 or 2019, but wouldn’t they need a minimum $5 share price? (It seems highly unlikely that they would be able to do that before Phase 1 results?)
4. Assuming they develop a best-in-class drug, is it likely to be able to capture enough of the addressable market to offset the share dilution and become a viable long term investment? (I’m assuming it’s a long shot and that’s why the share price is so low, but I don’t want to make assumptions.)

I know this is a very complicated topic and some of my questions can’t be easily answered, if at all. I’m really just trying to fill in some of the many gaps in my understanding of biotech stock analysis.

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Jung
Guest
Jung
May 18, 2018 6:57 pm
Reply to  Jason

Alzheimers will never be cured. Most testing is done on mild to moderate, which is virtually impossible to succeed. A good strategy is invest early, let it run, then get out or short before phase 3 readouts…

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Dan
Member
Dan
May 18, 2018 7:17 pm
Reply to  Jason

PROMIS NEUROSCIENCES INC COM
1,100 0.39 $429.00 -$42.95 (-9.10%)Average Cost 0.429
Annual Dividend Amount $0.00
Dividend Ex Date

I Bought 11oo shares and am down 9% got in with some hype and its has fluctuated a bit…it may have upside, here is what i have in terms of research it is currently rated as undervalued:
Analyst Research and Ratings
Though PMN has outperformed its Biotechnology & Drugs peers over the past year, over the last three months it has lagged behind its peers.
Morningstar logo
Morningstar research data
Morningstar Rating 3 stars Q
Quantitative Value Undervalued
Fair ValueQ 0.53 CAD
Last price as of
May 17, 2018 0.39 CAD
Morningstar research data
Quantitative Uncertainty Extreme
Economic Moat —
Market Cap 93.4 M
Country of Domicile Canada

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Chewy
Irregular
Chewy
May 18, 2018 6:10 pm

Can you recommend any news letter or service like yours in Australia?

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Chewy
Irregular
Chewy
May 18, 2018 9:03 pm

Thanks Travis, cover some more please.

toff
Irregular
toff
May 18, 2018 6:24 pm

You use warrants and options quite a lot for your smaller bets. Particularly with warrants, how do you decide when to exercise? If the warrant expires, then it was a complete loss, right?

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backoffice
Irregular
May 20, 2018 12:08 pm
Reply to  toff

Great thing is you don’t have to exercise! Just sell them if it’s profitable. The only time I would exercise warrants is as follows ( exercise price is above the sales price and I have a strong belief that the stock will increase) otherwise I’d take the loss by selling them. It all has to do with what they are worth and what’s my exposure.I usually buy warrants that are priced cheap to reduce my exposure and it’s worked well. I just hope that a listing of these investments would become available.

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Edward K. Motley
Guest
Edward K. Motley
May 18, 2018 6:58 pm