Toby Smith is a gasbag … just wanted to get that out of the way before I talk about a few of his microcap teasers. I’ve seen him talk a few times, and he’s the red-faced jolly guy who can’t stop talking, if he’s at an investment conference he’ll be out in the hall after his talk, holding forth for a handful of acolytes with florid stories and tales that make him appear prescient.
Not that this means he’s not a worthwhile investing pundit to follow (though I’ve got my doubts, of course), he can be entertaining and sometimes share an interesting idea … so let’s see what his latest teaser pick tells us, shall we?
The ad of his that’s getting the most traction right now is for a Chinese telecom firm, but I’ve already written about that one, the last time he pushed it aggressively. Assuming I was correct (you can judge for yourself by reading my original article from July here), Tobin and his ChangeWave MicroCap Investor newsletter have been a major force moving this stock — it came close to doubling in the weeks that he was pushing it last time, then drifted lower for months, and it’s up by about 50% in the last week or so as I’ve seen him pushing the shares again. The stock was ChinaTel (CHTL, trades over the counter), in case you’re curious but not intrigued enough to go back to that older article.
And today he’s claiming fantastic performance for his stocks this year in urging you to sign up to pay $995 for a subscription — and indeed, it wouldn’t be surprising if the microcap stocks that he likes that often sound like, well, junk have done well recently, this has definitely been a year for the recovery for junk stocks, just as for junk bonds. But for those of us who’ve watched his penny-stock picking for years, there’s always plenty of cause for caution … and a reminder that he often goes back to the same stocks time after time. For much of late 2007 and early 2008 he was promising that stocks like SpareBackup, Raptor Networks, and Oculus Innovatiive Sciences were “99% sure things” to double your money … and of course, all of those stocks have instead fallen by far more than 50% since, even those that have recovered a bit this year....