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“Minting Millions from the Magic Molecule” (Nick Hodge)

Checking out a recent teaser for Hodge's Early Advantage and the Outside Club

“How to get this $35,000/gram miracle cure for just $0.65” — that’s the subject line of the latest teaser ad we’re reviewing … how can you resist?

The folks at Angel Publishing appear to be spinning off some of their newsletters, with Nick Hodge headlining, into a new little entity called the Outsider Club — which, as far as I can tell, is just another of the dozens of interrelated newsletter brands that have been built by Agora-affiliated publishers over the years. Some of them catch on and build big mailing lists, some of them quietly disappear.

But this pitch is not really just from this “Outsider Club”, it’s from Nick Hodge’s pricey newsletter called Early Advantage, which has been around for many years at Angel Publishing — it used to be called Alternative Energy Speculator until they realized that particular subsector was losing investor interest a couple years back, and it has called some interesting stocks to our attention, including Westport Innovations about five years ago before they were listed in NY.

So I tend to pay attention to their new picks even though some of the tiny ones end up being crash-and-burn disasters — my readers keep asking about them, and they pick so many tiny stocks that their attentions have a tendency to drive big spikes in the share price. I expect we’ll see the same thing once again here, since this latest teaser pick (which I mentioned a couple weeks ago, but haven’t gotten to looking at closely until now) is even smaller than most.

Of course, such spikes up in price are usually followed by a collapse if the story doesn’t play out as cleanly or as quickly as the ads always seem to imply, but they can at least be fun to watch.

So what’s Hodge’s latest darling stock?

Here’s the teaser pitch:

“… for 5+ years, a team of America’s foremost scientists has been hard at work in a laboratory… working on a Nobel Prize-worthy discovery.

“And it ALL revolves around the giant keyhole limpet… or more simply, the sea snail.

“It’s something you’d ordinarily see in a sci-fi film. But this is very real.

“And if you understand why this sea snail is so crucial — and what these scientists discovered while burning the midnight oil — you’ll be on the fast track to 300x your money profits….

“What was unearthed in a Ventura County lab is something that will alter the way the medical world operates forever…

“Few discoveries in history have had the kind of impact this one will have. It’s simply so game-changing, examples of past scientific developments may be completely pointless.

“We’re treading on truly unheard-of profit territory here.”

Well, we can at least rest assured that the fertile fields of hyperbole are growing nicely in Baltimore, MD — how can you not want to know about “unheard-of profit?”

Even if we know that the reality never matches the hype, there’s still that little part of our brain that says, “what if he’s even just halfway right?”

He compares this advancement to the big antiviral discoveries made by Gilead Sciences (GILD) back in 1992, and shows the dramatic stock move from 50 cents or so up to the low $20s — he doesn’t mention that it took 15+ years of patience and fortitude to enjoy those gains, or how many other companies seemed to have similarly exciting discoveries in 1992 and are now bankrupt, but you get the idea — biotech is one of those areas of the market where huge gains are possible. And even though the fact isn’t hammered into your head everyday the way those potential gains are, you probably area also quite aware that with 1,000%+ return potential you almost always get a heightened risk of 100% losses.

So what is this “Magic Molecule” that’s supposed to make us rich?

Here’s some more from the teaser ad:

“The world-shaking discovery… REVEALED

“For decades now, medical companies around the globe have heavily relied on a compound known as Keyhole Limpet Hemocyanin (referred to as KLH — or what I call the “magic molecule”).

“That’s a fancy name for what essentially amounts to sea snail blood…

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“KLH only comes from one place: the giant keyhole limpet, aka the sea snail I showed you a picture of earlier. And this sea snail lives in one very specific part of the world, off the coast of Central California….

“Here’s the key: There are only 100,000 of these creatures left in the wild. Once the KLH has been extracted from them, they die.

“In other words, the hundreds of drugs that rely on KLH — the drugs that assist patients who suffer from cancer to Alzheimer’s to drug addiction — are in grave danger of extinction… along with this specific species of sea snail.

“None of this may seem very exciting, but get this: Because it’s so scarce, the KLH extracted from these sea snails sells for between $35,000 and $900,000 per gram.”

OK, so that’s our little “Magic Molecule” — Keyhole Limpet Hemocyanin. I confess that I had never heard of it before taking a quick look at this story about two weeks ago.

And yes, the Keyhole Limpet was featured in Popular Science as an enabler of a cure for cancer about 18 months ago — an article that is worth a quick read, and that mentions the company that’s farming these mollusks in California to extract their blood.

So is that the same company being teased by Nick Hodge? Let’s quickly check a few more clues:

“Once single company — whose shares currently trade around a mere $0.60 as you read this — is the ONLY company that knows how to extract KLH without killing the sea snail. And they have a patent on it.

“So, not only does no one else know how to do this…

“But this tiny company also has a patent pending for a process in which they raise the sea snails on land.

“That’s what happens when you have the likes of these guys working in your Ventura County laboratory:

  • The board-certified immunologist who, together with his team at UCLA, was the first to discover AIDS in 1980; and
  • the Professor of Molecular Genetics and Biochemistry at UC-Santa Barbara — named one of the 50 leading technology pioneers of 2006 by Scientific American.”

So … yep, this is Stellar Biotechnologies, which is listed on the Venture exchange in Canada at KLH and also trades over the counter in the US at ticker SBOTF (with low volume in both places, this is a sub-$40 million stock and $100,000 in money flowing in or out could dramatically impact the stock price).

And yes, Stellar is the leading (and practically the only, they say) company that’s sustainably cultivating Keyhole Limpets on land, in a controlled environment aquaculture farm/lab, and extracting their blood for use in vaccines. Their current capacity is about one kilogram of blood per year, which doesn’t sound like a lot — but apparently the amount required for each dosage of a vaccine must be infinitesimally small.

KLH is really a vaccine conduit, not a curative compound in its own right (there are other mollusks that have been touted as miracule cures, like the anti-bacterial and cancer-fighting properties of some sea snails that have been in the press in recent years) — it’s a large molecule that’s safe for humans but has a strong immune response, here’s how they describe it:

“KLH is an important immune-stimulating protein used in wide-ranging therapeutic and diagnostic markets. Potent, yet proven safe in humans, KLH operates as both a vital component for conjugate vaccines (targeting cancer, autoimmune, and infectious diseases) as well as an antigen for measuring immune status. Stellar Biotechnologies was founded to address the growing demand for renewable, commercial-scale supplies of high-quality, GMP-grade KLH. Stellar has developed leading practices, facilities and proprietary capabilities to address this need.”

So apparently this KLH stuff is a great base for vaccines — it’s part of a tested compound for dozens of clinical trials right now, including at least a few active trials where they have supply agreements with pharmaceutical companies. You can see several presentations here about their business and technology. The Wikipedia page explaining this protein gives a pretty good broad overview here.

And the stock has climbed nicely this year, following their listing on the OTCQB and rising awareness among US speculators and plenty of news releases from the company about their aquaculture achievements and the progress of potential vaccines for cancer and other diseases, along with, of course, this recent attention from Nick Hodge. This isn’t the first time the company has been a stock market darling, that Popular Science article came a year after the surge of excitement that drove the shaers from 20-30 cents to well over a dollar for a few weeks in late 2010-early 2011, but we’re broaching new highs for the year again here in the 70 cent range.

That means Stellar Biotechnologies now has a market cap approaching $40 million — laughable for the kind of potential market they’re talking about, with hoped for royalties and other revenue bringing in hundreds of millions of dollars a year perhaps as soon as 3-5 years from now (that’s from one of their investor presentations), but very large for a company that has negligible revenue and posts losses in most quarters of roughly a million dollars. They’ll also have to raise money by selling stock, I expect, if they haven’t made any big deals with pharmaceutical companies by late this year.

But that’s probably the immediate upside potential, beyond the possibility that they might get exciting news from one of the current KLH vaccine trials that leads to a rapid increase in demand for the molecule — they say they are “actively exploring multiple, current avenues of co-involvement with 7 of the 15 largest biopharma companies.”

And for a $40 million company, a joint venture deal with a larger pharma company can easily provide enough cash to keep them going for quite a while — and spur some increased investor love.

I have no real sense for what the market for this KLH will be in the end — certainly demand could be very high if there are effective vaccines for Lupus, Breast Cancer or Rheumatoid Arthritis that use this molecule, but it’s not clear to me what the physical capacity is or what the pricing would be in that world if higher demand… or whether the mass market demand for this compound would lead to new ways of synthesizing it and therefore sidestepping the limited capacity of Stellar’s mollusk farm. They have managed to get these creatures to reproduce in captivity, so they’re managing multiple generations of them and can increase capacity over time, but I can’t imagine that they can increase capacity all that quickly.

The only folks I saw actively selling and quoting prices for KLH for labs were selling it for about $10/mg, I have absolutely no idea whether their variety is as good as Stellar’s (or maybe it is Stellar’s, I dunno), but at that rate a kilogram, Stellar’s annual capacity, would be worth $10 million. If Hodge is right and this stuff is good enough that it sells for $35,000-900,000/gram, then that means their annual kilogram of KLH production could pull in somewhere between $35 million and $900 million a year in revenue.

So that’s a pretty wide range, potential revenue somewhere between $10 million and $900 million … which doesn’t count any royalties they might get for their proprietary products or from joint ventures if they really proceed with developing their own compounds for clinical study, as they indicate they might.

So far, though, revenue is more like $250,000 over the last four quarters … which means the low end of that estimate would be hugely dramatic growth for Stellar. Of course, whether or not they can ever reach that low-end guess is an open question — it looks really interesting, I can see that they’ve invested a lot (including government grants) to build this sustainable aquaculture and processing capacity, but with science still proceeding and the vaccine trials still pretty early, I can’t even halfway guess what the company should be worth or whether their product will stand out as a crucial component and see increased demand even if prices rise.

But that’s the long-term imagining about Stellar’s future — most likely, the stock will bounce around like a cork as news flows regarding any of their clinical trials or joint venture deals with pharmaceutical companies, so I wouldn’t expect to see the shares trade on some fundamental valuation based on revenue or earnings anytime soon. File this under “speculation” and be prepared for a bumpy ride if you decide to get on board, I expect that Nick Hodge’s attention (and the attention of our merry band here at Gumshoe Nation) will make the stock bouncy even without any fundamental news (average trading volume combined in Canada and the US is not often much more than $100,000, which is very, very light — don’t count on getting out of a position at a reasonable price if you want to sell in a hurry).

If you’d like to hazard a guess as to what the stock is worth, or whether it’s worth a nibble, feel free to use the friendly little comment box below.

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nick hodges
Guest
July 22, 2013 4:47 pm

what a joke, this is clearly just a scam. dont be an idiot and buy this crap!

dallen
dallen
August 6, 2013 2:15 pm

I bought @.63 and the stock is @ 1.08 today, I plan on holding SBOTF and thank Nick Hodge for just enough information that I was able to locate the company and research on my own.

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theblindsquirrel
August 6, 2013 6:38 pm

I agree with Deborah in that Hodge went just a little too far in his tease re Stellar Biothech. Like her, I took what was said in the seemingly endless presentation, entered a few keywors in my search engine, and withing 10 minutes had identified the company. I was intrigued. At the time it was trading at .73 and not really moving. I had some cash ready to go in a personal, taxable, account, but wanted to own Stellar in my IRA. A pension rollover was due to be transferred into that account in September or so, so I waited. And watched. Then, with no news to support it, the stock bounded to the .93 range. Waiting didn’t seem an option. So, I made a decision that was far outside my normal investment rules. I decided that, whith what I had learned of the company, it’s product (KLH), it’s market dominance, it’s extensive portfolio of patents, it’s R&D efforts, it’s alliances and agreements with some of the worlds largest Pharma to supply them with top quality KLH for their work, and the fact that Stellar wasn’t just somebodies hopes and dreams, but instead a 25 year-old company with REAL sales, REAL growth, and a REAL dominance in a market niche that was both exciting and NECESSARY in the world of pharmaceutical bioenginering, I made Stellar my”Brass Ring” holding. By that I mean I made it my one and only holding to which I attached the possibility of being “the one” that might pay off in the future in extrodinary ways. I set a 5 year time limit, a price minimum of $5.00, and I bought 10,000 shares at .93. Since then – and it’s only been about 6 weeks ago – I’ve seen it spike up to the $1.12 – $1.15 range, then fall off to the $1.00 or so level three times. It has become a very tempting trading opportunity to me, but I resist the urge. I’m holding for what might be the big winner. The last time I took a plunge like this and bought another “Brass Ring” was in 1986 when I discovered a very distressed company that provided an absolutely necessary service and was failing miserably in doing so. But it had no competition at all (by government decree) and was begging for somebody to come in and buy it out. That company was TFONY – Telephonos de Mexico – at $0.12 a share. I was working as a Financial Advisor with Merrill Lynch at the time and I placed the stock in as many client speculative portfolios as I couls. That wasn’t many – few believers in a down and out Mexican company being run by a totally corrupt and inept government. When my time constraints on a personal investment passed, I bought it for myself. Within 8 months or so, a major telecom came in, made the Mexicans an offer they couldn’t refuse, and the price shot up to the $0.85 area near overnight on the rumor. I grabbed that Brass Ring and cashed out. Probably the best trade of my life. And now here is a very different company with a very different product and with very different management and outlook. But like TFONY, it has no coverage to speak of (yet) and can’t be held in mutual funds, ETF’s or other suj vehicles that can provide both coverage and price support. But that day will come. Stellar will move off the pinks and onto NASDAQ and the party may began. I’ll be there for it, for better or worse. I don’t think there is much chance I’ll lose money in the end. How much may be made is anybodies guess. Check back with me in late 2018 and we’ll talk again.
Disclaimer: I am long SBOTF and may add to my position at anytime
“Si Vi Pacem, Parabellum”

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stockstud
stockstud
August 11, 2013 10:25 am

Great post Jim and good luck- keep us in the loop!

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Myron Martin
Irregular
August 11, 2013 10:44 am

Now that is what I call “intelligent speculation” not where you should put your rent money and probably no more than 2% of your portfolio, but stocks like these with a small commitment CAN pay outsized gains. I have a candidate upcoming for my column on the 16th.

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theblindsquirrel
August 11, 2013 11:51 am
Reply to  Myron Martin

Look forward to seeing what your “Brass Ring” candidate will be, Myron. I’ve been a risk taker all my life and these things just intrigue me. I know on an intellectual level that they are much like a financial lotto and the odds are heavy against the investor in seeing the kind of payoff you hope for. But still, just like the justification that lotto players use (I’m not one of those), the saying is that “no matter the odds, somebody wins everyday.”
Note to Travis: I’m flattered that you chose to feature my comments. When I first saw the blurb and noticed that it was from a new Irregular member named Jim I thought it was some coincidence that there were two of us. Couldn’t be me. But it is. See, what did I say above? No matter the odds of something happening, sometimes you win! :0) Heck, if I had any idea at all that this could have happened I’d have taken a lot more care with my spelling and typos!

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bbowie
Irregular
August 11, 2013 2:20 pm

Hello Jim I am very impressed by your comment and the reason you chose this stock . I am a novice at investing in the stock market but I am educating myself with a few books on the subject and I must say your reason for choosing the company are sound to me. You are not trying to hype it up or act like you are some kind of guru in the stock market and you have clearly stated that you are taking a gable on the company. Honestly I am thinking about investing a few dollars after I do my due diligence and research the company . Thanks for your comment and Thanks Travis for choosing to feature it.

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mandrover
August 11, 2013 11:34 am

Sounds like it might be worth a shot (a small one) but it’s kind of like playing black jack with the dealer showing a 5. I usually take the double down; don’t always win but the odds are better. It is the rest of my playing that costs me money. But if I can throw down $200-$300 at the tables, why not put it on sea snails at 20:1 odds? There are a few others I have in my “Gambling Portfolio” one in Energy and two in Bio. The energy play is Genoil GNOLF and the bios are Cortex CORX and Adherex Technologies ADHXF. They all have proprietary technologies and patents as well, what they don’t have is the money they need. But if they are able to get it I might find that card I was needing to fill my inside straight. THESE ARE PLAYS THAT YOU NEED TO BE WILLING TO LOSE WHATEVER YOU INVEST IN THEM! Does anybody else have a comment on them?

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Henry
Guest
Henry
August 11, 2013 11:41 am

It is a good time for SBOTF as only some smart money is in but not a lot like GTI. It sure is intelligent speculation with smart money betting as it is always on the winning side. In SBOTF case if smart money gets in, small timers will be a little late. Now is the good time as I got in at 0.74 for a $1000 which maybe peanuts for a lot of gumshoers but I will not loose my shirt even if it crashes and burns. BTW, if Myron throws a bone to our corner from his upcoming speculation on the 16th, that would be nice.

don_x
August 11, 2013 1:39 pm

I agree with Myron Martin that Dr. Oz and Mercola should not be considered quacks. It is easy to disparage professionals as quacks without any facts to back it up. Both of these doctors are willing to explore new ground and try new approaches to helping people with their medical problems. Mercola does back up most of his claims with research references. One can disagree with his conclusions and recommendations without branding him or Oz as quacks. What makes some of the medical doctors less credible is when you skip to the end of their presentations and see that they are promoting a product that makes them tons of money. In both traditional medicine as well as non-traditional medicine, there are big differences of opinion and in particular, with regard to cancer cures. I do think there are treatment approaches that are simple but unpatentable that keep big pharma from being willing to put money behind some potentially promising curative efforts, whether it’s baking soda or coconut oil.

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Myron Martin
Irregular
August 12, 2013 9:06 am
Reply to  don_x

Just to back up Don’s observations, what makes Dr. OZ and Dr. Mercola and Jonathan Wright and a whole host of other renegade medical doctors creditable is the fact they took the standard medical training and “practiced” for many years, practiced being the operative word and from the INSIDE saw with their own eyes and first hand experience that it was a “money machine” and highly controlled to disparage and censor dissidents. Dr. Oz is still a highly competent heart surgeon but honest enough to admit there are are better solutions that would PREVENT most of the cases he has to deal with in surgery, and the same holds true for many more disillusioned medical doctors who on a daily basis see the terrible state of health of people eating the Standard American Diet (SAD) that would in time, bankrupt the country under Obamacare, as if it wasn’t already.

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dallen
dallen
August 11, 2013 2:23 pm

Jim,
Time will tell, I am always interested in biotech stocks and funds, on average my picks are at 48-60 % for the year. I feel strongly enough about Stellar to visit the operation on my trip to CA in September.

theblindsquirrel
August 11, 2013 8:11 pm
Reply to  dallen

Deborah:
I’d love to be able to visit the facuility too. But I line about as far away from there as possible – South Florida. Please, after you make your visit, write up your observations and share with the rest of us.

I’d add to that re the location this thought: when I first viewed the tease by Hodge I noticed he was interviewing a couple employees out in the open near the production / breeding pens. Behind them, in the not-so-far distance, you could see a large body of water extending out to the horizion. So, maybe they are located on a bay or perhaps the ocean itself – I don’t know but sure would like to. If it’s the ocean, I’m guessing that is to provide them with seawater from as close to the little natural breeding grounds as possible. We’re not told why, exactly, these Keyhole Limpets are found there and only there. Maybe ocean temps, seasonal changes, currents, nutrients, type of ocean floor, depths, or some combo of all these things. A question I’d ask. But what I mainly want to know is this; if that is the actual ocean, and they are located within such close proximity to it, is there no danger of a Pacific hurricane, typhoon, or tidal surge that could come in aand in 60 seconds wipe out all thier physical plant? I live under constant threat of hurricanes and storm surges in that I’m only about 10 miles inland from the Atlantic. I’ve endured some horrific storms, suffered a great deal of damage, and appreciate the way these disasters can sweep in and take out everything. Is Stellar at risk of this? Please inquire – and let us know.
Finally, yes – this is a huge GAMBLE, folks. I’m willing and able to take the risk of seeing $7500 or so evaporate. I’d hate it, but it won’t change my life. However, if that $7500 turns into someting north of, say, $40,000 in the next 5 years, that will make a difference to me. Buy me a new Harley for instance. Since I’m in my mid-60’s, I don’t have 20 years to wait. Gotta make hay while the sun shines, you know? So, if you have the wherewithall and nerves for it, climb aboard, pay the fare, and hang on for dear life. It just may be a wild ride!

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barbg
August 11, 2013 4:37 pm

What is the “770” account that each should own?

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temjin
Member
temjin
August 12, 2013 2:25 am

See the problem with biotech is there is always someone just around the corner with a better technology or who will use your technology as a stepping stone. I personally have a Degree in biotechnology and work in the pathology industry. This key hole limpet has this KLH protein which is synthesised within the cells of the animal from 1 or more genes. All another company has to do is remove this gene from the limpet and splice it into a nice little bacterium. The bacterium can then be grown in a huge vat and produce this protein cheaply and effciently (they do the same with insulin production). Now if they own the IP of the gene or genes that produce the KLH that is another story, better to own the gene then to own the method of extracting the KLH from the animal. I see another company (possible the drug companies themselfs) creating a transgenic bacterium capable of producing the KLH because of the outragious cost of extracting it from the animal. When that happens stellar won’t be worth much.

P.S. One of the courses with my degree was biotech finance, long story short biotech is extremely risky to invest in and our lecturer made sure we were well aware of that, the percentage of failures is huge.

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theblindsquirrel
August 12, 2013 8:03 pm
Reply to  temjin

Shaunus:

Thanks for your reply to my post. Before I comment on it, allow me to say this. I would never get into a debate with you about Bioengineering. You tell me you have a degree of some sort in that field which would put me at a serious disadvantage. Other than the B.S, degree I earned back in the dark ages – the “B.S. standing for “Bachelor of Science”, not the more common street definition of B.S. The only degrees I have gotten in recent years are the several third degrees I got from my ex-wives divorce attorneys. Those would not be of much help in supporting my views on this subject.
I’ve read your post three times now and here’s my takeaway from what you are saying:
(1) You believe that any biotech or Pharma company that wanted to could sweep in, synthesize the KLH protein from the genes of the Limpet, whip up a big batch of KLH in a vat, and produce an endless supply of the protein at little cost for their own uses. That about it? Well, I always ask questions and here’s mine: if it’s just that easy, why hasn’t somebody done it already? Why is SBOTF still in business? This is just one thing that makes me go Hummmmmm.

(2) Your “lecturer” in a class told you that investments in biotech was “extremely risky” and that the “percentage of failures is huge.” Now, don’t think I’m just trying to be snarky here or too cute .. but did it really take a college level course to learn that? Shaunus, if a person does not recognize those simple and basic facts about investing in any form of cutting edge or new technology they really ought not even be allowed near a trading desk. Please don’t take offense – I’m not trying to insult you. I’m just saying that if the fact that investing in a company like Stellar Biotechnology is deemed “risky”, well, caveat emptor. You can say that about ANY tech company from any point in time. GE was once a “high risk” company. People thought that electryfying a house, much less a city or entire Nation would certainly result in catastrophic fires and deaths. Think about Apple Computer early on. Intel. IBM. Microsoft. Etc., etc., etc., ad nauseum. New ideas and new technology are ALWAYS thought of as very hgh risk in the developmental years.

(3) So, Stellar Biotech is risky and carries with it the possibility – even a high possibility – of never becoming what some like me think it has the possibility of becoming. Very true. But it also has the possibility of becoming a highly profitable company providing a critical element for R&D (KLH) in the Pharma industry (and perhaps holding great benefits for developing certain specific applications for treatments on its own) while holding dozens of patents on it’s processes that prevents other companies from stealing their intellectual and proprietary property and doing it themselves. Phew! – a run-on sentence as my English tgeacher liked to tell me. Sorry.

Conclusion: If the percieved risk of investing in SBOTF or any other company is too much for you to bear, stay away. It’s that age-old idea of heat and kitchens. If you are like me and the risk is acceptable in return for the hoped returns later on, get in there and start cooking. It’s that simple. But never simply dismiss an investment opportunity out of hand just because it may fail. ANYTHING can fail. That’s the nature of this beast we call “investing.” Good luck out there!

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meassassin
March 7, 2014 2:31 am

I know this is an old thread, I am reading up on a few things, this however caught my eye. Please I am not being ;snarky or trying to start up anything, just pointing out that sometimes, just sometimes, where there is smoke, there is fire….and not in a good way.

Jim you said, to shore up your argument “….You can say that about ANY tech company from any point in time. GE was once a “high risk” company. People thought that electryfying a house, much less a city or entire Nation would certainly result in catastrophic fires and deaths. ..”

Umm yep they did, and were they wrong? In he USA alone, there are appx 400,000 electrical fires each YEAR, resulting in approximately 3,000 deaths, 13,000 debilitating injuries, with total approximated costs near 8,000,000,000 (billion) dollars PER YEAR. EVERY year on average. Acceptable risk-return?

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canonfodder
canonfodder
August 12, 2013 1:14 pm

I don’t believe in “big Pharma” and their sometimes dangerous prescription products. However, I try to not let this personal bias keep me from making some money off those same companies. So, I have decided to go ahead today and place a significant bet (for me) on SBOTF. Yes, Stellar is not big pharma but their customers certainly are. The product is in fact a natural extract derived from sea life and that sort of thing does attract my attention as most of the supplements that I do take are derived from natural plant or animal life. Last year I was attracted to a smaller company that was showing great success in some clinical trials. As trial results progressed it was very obvious that the investors were paying attention as the price was steadily going up, so I bought more of the stock. This continued and in spite of the higher price, I bought even more of the stock. Then a sudden change of situation occurred. A BIG company wanted the small company and I did very very well on the buyout offer. Oddly, the special medical product that caused the buyout has disappeared from this earth. Appears that the buyout was used to prevent the new stuff from competing with the buyers old stuff. Such is the extent of greed sometimes demonstrated by the big pharma companies. Perhaps someday the buying company will see fit to produce the medicine which they scooped up. Perhaps someday SBOTF will be bought out by one of its customers. If that should happen, I will be hoping for a fat jump in price.

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vivian lewis
August 12, 2013 1:55 pm

Global Investing’s editor (me) and my paid subscribers are benefiting from a new boost in biotech stocks which so far in 2013 has led to two takeover bids for shares we own, one Israeli, one Canadian. And a third, out of Belgium, which now employs our former Italy-based Biotech Maven, is looking good.
And last week another Israeli pharma IT company is soaring too thanks to a deal with a drug and chemical major.
I think that this is an investing trend and the origin may be in the USA. But we are not into key hole limpets unless I find a foreign firm in the area, in which case of course Stellar will be less stellar.

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alexm28
Member
alexm28
August 12, 2013 3:54 pm

I would like to learn ticker symbols of the companies you recomend. Now I only own one pharmaceutical co ALNY.

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theblindsquirrel
August 12, 2013 8:17 pm
Reply to  alexm28

Alex:
The company under discussion here is Stellar Biotechnology, symbol SBOTF. It trades on the pink sheet which might cause you to have to use the trading desk at your brokers firm to execute orders. This isn’t hard or expensive – just ask your customer service service at the firm through which you trade.

What is making this discussion a tad confusing is that there is really two subjects that have become intertwined. One subject – the primary one – is the company itself, Stellar Biotechnology and it’s prospects. The other subject that has become involved is that of using organic cures for treatment, prevention, and cures of diseases vs. the traditional medicine and the role big Pharma plays in that. Stellar IS NOT a Pharam company per se. They provide a substance, a protein called KLH, to the Pharma companies which need it to perform R&D on new drugs and conduct clinical trials. The posts from Myron “Doc Gumshoe” focus on the medical worlds conflicts on how to best treat disease and prevent it in the first place. Other posts are comments on the potential future of SBOTF. So read the posts that relate to which of these areas you are interested in. Just don’t confuse comments on SBOTF with those regarding pharmaceutical companies and what they do. SBOTF is INVOLVED with Pharma companies – they are its customers – but is not (yet) technically one of them.

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dallen
dallen
August 13, 2013 1:11 am

Jim,
A good site to look at is (blogs trans world news stellar group sea snail California) in search engine. I do know that Stellar has a license granted by the US Navy Base at Port Hueneme, Calif. and the farm is land based. The gastropod snails (Keyhole limpets) are raised in tanks and are well cared for. To Answer the question about a copy cat form of KLH, It is virtually impossible to synthesize KLH protein, due to the size of the molecule. However If Shaunus Brousek can do it, I will send some of my investment money his way.
I am not sure about hurricanes or typhoons, Port Hueneme is near LA, I have not heard of any wipeouts on the west coast. I live in Alaska so I think the distance is about the same as from Florida to LA. I will let you know

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theblindsquirrel
August 13, 2013 1:40 pm
Reply to  dallen

DeborAH:
Your comment re Mr. Brouseks’ contention about the ease in which someone could synthesize KLH reflects the view I somewhat tounge in cheek replied with. If it’sthat easy, why hasn’t anyone done it and cashed in? Imagine the embarrasment around the Stellar boardroom when they found out that they had wasted some 20 years and may millions of dollars trying to get this right only to see some upstart with a few Limpets, a big ole vat, and some bacteria make commercial grade KLH! As for me, I’m not very concerned that this will happen.

And my houghts about exposure to natural disaster given the location of the plants is born more from my 40 years living near the ocean edge here in South Florida and getting pounded by some bakers dozen hurricanes – large and small – over the years. Living through those things and then having to do the rebuilds it requires tends to make a person a little gunshy. I know zip about weather patterns in coastal CA, but do know the general area sits on the verge of earthquakes (as bad or worse as hurricanes) and possible Tidal waves coming from the Pacific Rim. So I wonder – just in case, does Stellar have a back-up plan in place to deal with that possibility or could we just see our investments washed out to sea one fine day? But I’m not gonna lose any sleep over that concern, just curious.

Now, a heads up: Later tody I’ll be writing a post about the market action in SBOTF today and what I did about it – or tried to do. As of now, 1:45 PM EST, I don’t know the result of my actions. Stay tuned ..

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dallen
dallen
August 13, 2013 2:18 pm

Jim,
As of market close today my SBOTF keyhole investment is at 73.66%. and yes sometimes I invest on 50/50 research and gutt. The fact that Stellar is not a kill and get rich farm had me on the 50% gutt.

theblindsquirrel
August 14, 2013 12:52 am

It was a bit of a wild ride for Stellar Biotechnology today. Opening at $1.06, it almost immediately shot up to $1.14 bid, $1.16 ask. By noon it was trading within those bands and stayed put, closing at $1.14 ask. Most impressive was volume coming in at 461,473 shares – roughly 3X the normal flow.
I’m just guessing, but I suspect the strength of both price and volume can be traced to the fact that Nick Hodge released his teaser on the company – again. Same video as before. That’s knowable because he still quotes the price at ‘around 0.60 per share” in the presentation. You’d think he’d modify that so the presentation wouldn’t be so dated, but he hasn’t. No matter. By now most people that want to know what the company is have found out and can see for themselves.
As for me, I’m a happy camper regardless of why the price is moving. For those who may have missed my previous posts, I bought on July 18 at 0.93 per share. Had been watching for a few weeks previous as it hovered in the 0.73 area, then it popped (like today) to the 0.93 range. Enough was enough and seeing it get away from me, I took the plunge, buying what is a sizeable number of shares for my little portfolio. Enough so that if it works out as thought it might, it can make a real difference to me. But not so much that if it folds I’d have to change my lifestyle. It’s my “Brass Ring” as I like to call these things. Right now I’m up 25.01% in just under a month. Not too shabby so far.
Above you’ll see a reply I made to Deborah in which I said I’d relate something I was attempting to do today but wouldn’t know the result until market close. Well, the market has closed and here’s what I was doing. I relate this just because I think a person ought be honest enough to tell others, especialy a fine group of folks as is found here in the Gumshoe Universe, the TRUTH in all it’s gory detail about things they try whether or not they work out. I don’t much respect people that go on and on and on about the winners they have but never mention the losers which we all know are an inevitable part of this process called investing. So, in that spirit, here’s how my day went.
In my comment that Travis so surprisingly decided to use as last weeks “Comment of the Week” I mentioned that I was determined not to succumb to my gamblers instinct to trade the position. Even thought I had watched it rise to the $1.10 area and then fall back to about 1.00 on THREE occasions over just a week or so. Well, today that resolve to hold for long term results got washed aside with this quick price increase. I figured if I could sell here, then if the price followed that same fallback pattern sometime during the remainder of the week, I’d both lock in the quick profits then buy back about 10% or so lower than the sell. Lotta “ifs” in that sentince.
So around noon I placed an order to sell the entire position. I went in with a 1.13 limit price – didn’t want to risk that trader dropping the bid just to take me out then immediately moving it back higher. The bid at the time was 1.13, ask 1.16. And I waited. And waited. And waited. No execution. And the day ground to a close with me still hoping that it what was happening was that situation called “stock ahead” at the bid price, That means that even though my sell order was in at the bid price, at great deal of other orders were also in at that same level that were placed before mine. They have to be filled first. Sorta like being way back in the line to get tickets for a concert. You just gotta wait your turn and hope they don’t sell out before you get to the window.
I never got executed. Whether or not that proves to be a good thing, well, I’ll find out tomorrow. If the price pushes higher still, I may go back in with another sell order a penny or two below the bid. That will get me a trade. Or I may just not use a limit parameter at all, just take what I get. But if the price starts to retrace some of todays gains, I’ll just stand pat and try to take solace in the knowledge that I said I was in this for the long haul anyway.
If I do sell, I’ll be back in soon. Hoping that I’m not sounding like some tout myself, or that I have fallen in love with the stock, or am shilling for Nick Hodge, or whatever other descriptive adjectives come to mind, I plan to be an owner of Stellar for the long term. The way I work these things when I trade a position I still believe will go higheris I set a 10% band on either side of the price I got out with. In this case, if I do wind up selliing at, say, 1.14, I’ll have alerts set up to tell me when the ask either drops to 1.03 or rises to 1.25 and I’ll buy it back and start again.
Is this wise? Some might say yes – protect and make real those profits. Some might say no, why give up the spread if I really believe in higher prices long term? All I can say is that it works for me. This is high risk gambling money I’m working here and part of the thrill is not only profits but the game itself. How about any and all other Gumshoes out there like you? I’d like to know what you think.
Is it 9:30 AM EST yet? :0)

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Berto
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Berto
August 14, 2013 12:55 am

Jim,
I completely agree with you, and I believed this companies story as soon as Travis deciphered nicks tease, back when it was .65. I go to school in the university of Oklahoma, but I live in Florida, Weston/fort lauderdale area, where are you?
Btw me and a couple of gumshoers formed a yahoo group, since we didnt want to abuse of GS, the story why we created the group is, type on GS search: Lou Basenese NFC, and down in the comments you will see all our post. Btw the company is suppose to make a huge announcement tomorrow after the close when it reports earnings, a lot of us are taking a blind gamble to, but like this one it has a believable story, hope you get this before the close, just in case you want to get in.

Link to yahoo group hope to see you there, were in the process of accumulating members so anyone is welcome to join.
It’s called IWSY group but its a trader chat room in its early beginnings

http://finance.groups.yahoo.com/group/iwsy/

Betyo

theblindsquirrel
August 14, 2013 4:53 am
Reply to  Berto

Berto:
Thanks for the reply. I have been so distracted of late I totally overlooked the earnings report info you mention, and I haven’t heard even a whisper about any kind of major announcement from Stellar after the close Wednesday. I’ll be watching for that closely. If the price continues to move higher today it may just be because of this coming announcement. Just remember this old market adage: “Buy on the rumor, sell on the news.” Which in this case would mean we ought be buying NOW, waiting on the announcement, and be prepared to sell on Thursday if it as good an announcement as you think it may be. We’ll see.

I moved to Florida in ’72, settled in what was then a “new” city – Coral Springs – and stayed there until ’92. Great place to raise a family in those years. I then moved to Plantation, rented for about 4 years, and wound up building a home in Weston in ’96. Stayed there until I retired form the Financial Consiulting business and moved to Royal Palm Beach in 2003. I love it up here, close to everything in Palm Beach but far enough away to be out of the way of traffic and congestion of Broward and Dade Counties, and sort of in the country (Loxahatchee and The Acreage). I can have Sunday brunch at the Clewiston Inn with a drive West through the sugarcane fields of the ‘Glades in 45 minutes
Or do the same by going slightly North up the Beeline Highway to Indiantown and enjoying their fantastic Sunday brunch buffet. at the historic Indiantown Inn. I’ll check out your yahoo group when I have time. Sounds interesting. Can never get enough exchange of ideas and sharing of experience where investing is concerned.

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David Brown
Guest
August 20, 2013 12:39 pm

As a small investor who took positions about a week ago–I’ve got to say that I’m a huge fan of limpets right now! My IRA position is up almost $1,000 and my regular portfolio is up almost $2,000 in one week! Every single day the stock has been up even when the market has been hammered. My portfolio is thereby killing the S and P in large part due to a small sea snail–go escargot go!! Don’t waste these babies in a French Restaurant with butter–these babies are rocket fuel for the small investor. I’m going to ride this wave, lock in some profits soon to hedge my risk and then keep riding what looks like a huge winner. This company has a huge upside as the product looks extremely versatile and useful to the medical community.

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Henry
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Henry
August 20, 2013 4:19 pm

When Myron Martin commented about this company on Aug 11, it was still in the .80 to .90 range. Today Aug20, it closed at 1.49. Intelligent speculation is always on the winning side.

takeprofits
Irregular
August 21, 2013 9:47 am
Reply to  Henry

Thanks Henry, (I think) so now that my “intelligent speculation” has been published, are you in? If you check my record from previous columns you will find quite a few stocks that have moved up quite nicely. For the record, I give my picks at least 6 months to pay off and some may take longer, but the key remains extensive research and then PATIENCE and taking profits over say, 25% progressively until your original investment is off the table. I love playing with house money to eliminate RISK as quickly as possible.

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