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Other than Nasdaq, all major indexes had their worst weekly decline

since September. Pennyheaven Super 7 (2004) had its first declining

week since it began, thanks in no small part to DLGI.

There must something of a Murphy’s Law about selling stocks.

In a down week the only stock going up is the one you just sold.

Where it stands now I don’t feel as stupid as I did last week.

My instincts were correct my timing was terrible. Anytime you

make money its a good trade, however our goal is to buy at the

absolute bottom and sell at the absolute top.

On Friday 3/05, DataLogic DLGI (.88) hit a high of 1.69 (at about

11:15 AM EST) then dropped to a low of 1.01. What it took days

to build disappeared in minutes. If you were on your toes you sold

over 1.50. If you blinked you missed it. Lesson learned – if you’re

into pennies you got to watch them constantly.

BTW, I still think DLGI is a great company and I’m proud to have

it included in the Pennyheaven Super 7. Revenues are increasing,

they got a possible huge deal in China and worst case scenario,

they go back down to .50, I would think about getting back in.

My reason for selling was more technical than fundamental, the stock

went up too high too fast. Also, you always want to sell into a spike and

not after it. You can dispose of shares more orderly and readily on the

way up as opposed to dealing with hordes dumping on the way down.

Another old Wall St saying is “buy when everyone is selling and sell

when everyone is buying” which actually is just another way of saying

what I mentioned last time, the masses always get it wrong.

ClicknSettle.com CLIK (.18) announced an extension to a stock

repurchase program that began in March 1998.

http://biz.yahoo.com/prnews/040312/nyf001_1.html

To date they have purchased 252,498 shares at an average price of

.33/share. Be careful, the spread is .16 x .25. Don’t buy at the ask.

Try to get something in-between.

CLIK is a provider of arbitration and mediation services (alternative dispute

resolution services (ADR) services) and related electronic oversight applications,

principally to insurance companies, law firms, corporations and municipalities.

8.45 million s/o

43% held by insiders

$1.52 million market cap

$1.95 million cash

Website: http://www.clicknsettle.com/

We’ve been talking about International Monetary Systems INLM (.75) since

August 2003 (.49) when they then announced their best revenue month in

corporate history. (They had a another record month in December 2003).

We mentioned them again in November 2003 (.51) when they announced

a stock repurchase program. We mention them again now because last

week they announced a 2:1 forward split.

http://biz.yahoo.com/bw/040311/115353_1.html

IMS is one of the largest publicly traded barter companies in the world and

is continually expanding its exchange locations. The company’s proprietary

transaction network enables companies and individuals to trade goods and

services throughout North America. Using an electronic currency known as

trade dollars, IMS exchanges allow companies to create cost savings and to

improve operations by taking advantage of barter opportunities in their

business models.

16,732,224 s/o as of 9/30/03

Website: www.internationalmonetary.com

The following is an exercise in selling strategies using DLGI

as an example

1) Buy low and sell high. Best case scenario.

Theoretically, lets say I bought 4000 shares of DLGI at .25

and sold it all at the high of 1.65

Net gain: $5600 ($6600 – $1,000 buy-in)

2) Our trade

Theoretically, lets say I bought 4000 shares of DLGI at .25

and sold it all at .94

Net gain: $2,760 ($3,760 – $1,000)

By selling early I lost almost 3,000 in profits. Is there a better approach?

1) Let it ride.

4,000 shares ($.88) is now worth $3,520

Net worth: $2,520 ($3,520 – $1,000 Buy-in) Zero profit

2) Sell half every time a stock doubles.

Buy 4000 at .25 = ($1,000)

Sell 2000 at .50 = $1,000

Sell 1000 at 1.00 = $1,000

Net worth: $1880 ($1,000 profit + 1000 free shares worth $880)

3) Every time a stock climbs 200% sell half.

Buy 4000 at .25 = ($1,000)

Sell 2000 at .75 = $1,500

Net worth: $2260 ($500 profit + 2,000 free trading shares worth $1760)

4) When a stock climbs 300% sell 75%

Buy 4000 at .25 = ($1,000)

Sell 3,000 at 1.00 = $3,000

(Leave 1,000 free shares long matching normal buy-in amount of $1,000).

Net worth: $2,880 ($2,000 profit plus 1,000 free shares worth $880)

I’ll keep you posted.

GP@Pennyheaven.com

>>>>>>>>>> DISCLAIMER, PLEASE READ <<<<<<<<<<
Please be advised that nothing within this email shall constitute

a solicitation or an offer to buy or sell any security mentioned

herein. Pennyheaven.com is neither a registered investment

advisor nor affiliated with any broker or dealer. All statements

made are our express opinion only and should be treated as

such. We do not accept any paid promotion. Please do your

own DD and trade only what is right for you.

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January saw the largest influx in mutual funds in four years.

Those on the sidelines are finally getting into the game.

They’re approximately 11 months late.

“The January inflows for stock funds were the third largest on

record, surpassed only by the $55.6 billion the funds gathered

in February 2000 and $44.5 billion in January 2000.”

http://www.moneymag.com/2004/02/27/funds/fund_flows.reut/

The masses always get it wrong. Look at the record,

February 2000, one month later was the top of all tops.

Yours truly is taking some money off the table.

I sold TFAI last week at .94 and .95

and DLGI at .94 Friday when it spiked.

Old adage – professionals control the close; amateurs

control the open. In other words, if you’re a buyer, buy

at the close; if you’re a seller sell at the open.

DLGI reached its high of the day Friday at ~ 10:15 AM (EST).

The low of the day was 4PM.

TKCRF reported 2003 Fourth Quarter results. They have $7.9

million in cash and securities and $2.2 million in receivables of

which $805k was paid in February 2004.

http://biz.yahoo.com/bw/040223/235599_1.html

Their current market cap is ~ $9 million, roughly the same as cash.

Any accumulation under .40 is pretty safe. The down side is

it could take awhile for a deal to be put together.

I’m still watching KTEL. We’re now sitting on a 100% gain.

Friday’s volume was encouraging. For now its a hold.

I’m away next week.

Next issue will be 3/14/04.

I’ll keep you posted.

GP@Pennyheaven.com

>>>>>>>>>> DISCLAIMER, PLEASE READ <<<<<<<<<<
Please be advised that nothing within this email shall constitute

a solicitation or an offer to buy or sell any security mentioned

herein. Pennyheaven.com is neither a registered investment

advisor nor affiliated with any broker or dealer. All statements

made are our express opinion only and should be treated as

such. We do not accept any paid promotion. Please do your

own DD and trade only what is right for you.

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GP@Pennyheaven.com

January $Volume on the OTCBB topped $7.27 billion

and hit a new multi-year high.

To put in perspective, at its peak in 2000 the average

daily $volume was $528 million. January 2004 average

daily $volume was $242 million. The low was August

2002 when daily $volume was a measly $29 million.

HQNT must have heard me complaining. Thursday last

they announced an increase in their quarterly dividend

from .01 to .02 and finished the week ~ 25% higher.

http://biz.yahoo.com/bw/040205/55432_1.html

Pennyheaven Super 7 is now 7 for 7 in the black.

Click link below for a glimpse at our YTD performance.

http://www.pennyheaven.com/performance.htm

Advant-e Corporation AVEE (1.80) recently broke out of a

long sideways channel because of an announcement regarding

record 2003 revenues and net earnings.

http://biz.yahoo.com/prnews/040205/clth052_1.html

(If you believe the adage that the old ceiling is the new floor

look for a pullback to $1.50 – $1.60 before entering).

Advant-e, via its wholly owned and sole operating subsidiary Edict Systems,

Inc., is a provider of Business-to-Business electronic commerce software

and Internet-based applications specializing in Electronic Data Interchange

(EDI) and XML-based solutions for recurring transactions. Advant-e special-

izes in horizontal transaction services via EnterpriseEC®, an Internet-based

Electronic Business Transaction Network, and within specific vertical indus-

tries via web-based “vortals” including www.GroceryEC.com , www.RetailEC.

com , www.CPGSupplier.com , www.LogisticsEC.com , and www.MfgEC.com .

5,661,002 s/o as of 10/31/03

Market cap ~ $10.2 million

Web Site: http://www.advant-e.com

Five Star Products, Inc. FSPX (.20) also broke out of a long

sideways channel. They announced a tender offer to purchase

up to 5 million shares (30%) of its outstanding shares at .21/share.

http://biz.yahoo.com/bw/040206/65120_1.html

Five Star Products is engaged in the wholesale distribution of home decorating,

hardware and finishing products. It serves over 3,500 independent retail dealers

in twelve states making Five Star Products one of the largest distributors of its

kind in the Northeast.

16,937,867 s/o as of 10/30/03

Market cap ~ $3.4 million

News and Noteworthy re: Short Selling

SEC Approves NASD Rule Proposal Requiring Members to Make

Affirmative Determinations for Short Sale Orders Received from

Non-Member Broker/Dealers; Effective Date: February 20, 2004

http://www.nasdr.com/pdf-text/0403ntm.txt

More about NASD Rule 3370

http://www.smallcapmarketwatch.com/article.asp?Article_Id=123&edition=most

I’ll keep you posted

GP@Pennyheaven.com

>>>>>>>>>> DISCLAIMER, PLEASE READ <<<<<<<<<<
Please be advised that nothing within this email shall constitute

a solicitation or an offer to buy or sell any security mentioned

herein. Pennyheaven.com is neither a registered investment

advisor nor affiliated with any broker or dealer. All statements

made are our express opinion only and should be treated as

such. We do not accept any paid promotion. Please do your

own DD and trade only what is right for you.

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GP@Pennyheaven.com

More Insider Buying

K-tel International KTEL (.10)

CEO Philip Kives has purchased 295,400 shares between

12/17/03 and 1/6/04 at an average price of .093

http://finance.yahoo.com/q/it?s=KTEL.OB

K-tel International, Inc. is primarily engaged in licensing music to other

record companies and to other segments of the entertainment industry

through its operating subsidiaries. K-tel owns a proprietary master

music catalog of approximately 6,000 titles consisting of original

recordings and re-recordings of music from the 1950’s through today.

13,653,738 s/o as of 11/14/03

Web Site: http://www.ktel.com/

Something about HQNT

Despite news it is down 5% YTD.

If it falls to -10% (.65) we will consider selling

with a possible reentry at a later time.

One of our New Years resolutions is that we

do not let losses run. No exceptions.

Markets are closed Monday in honor of Dr. Martin Luther King.

I’ll keep you posted.

GP@Pennyheaven.com

>>>>>>>>>> DISCLAIMER, PLEASE READ <<<<<<<<<<
Please be advised that nothing within this email shall constitute

a solicitation or an offer to buy or sell any security mentioned

herein. Pennyheaven.com is neither a registered investment

advisor nor affiliated with any broker or dealer. All statements

made are our express opinion only and should be treated as

such. We do not accept any paid promotion. Please do your

own DD and trade only what is right for you.

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GP@Pennyheaven.com

Refocus Group RFCG (.57)

RFCG is a medical device company engaged in the research and

development of treatments for human vision disorders. Refocus Group

owns over 140 domestic and international issued, published, and pending

patents, the vast majority directed to methods, devices, and systems for

the treatment of presbyopia, ocular hypertension, primary open angle

glaucoma, macular degeneration and other eye disorders. Refocus

Group has licensed certain of its patented technology to CIBA Vision

Corp, the eye care unit of Novartis AG.

On Monday, 12/22/03, RFCG announced the following:

Refocus Group Secures $2.2 Million in Financing For

FDA Phase II Clinical Trials and Continuing Operations

http://biz.yahoo.com/prnews/031222/nym156_1.html

On Wed, 12/23/03, check out the insider trading activity

http://finance.yahoo.com/q/it?s=RFCG.OB

Mmm?

18,943,887 s/o as of 11/10/03

Market Cap $10.8 Million

Website: www.refocus-group.com

This is how I found it:

Insider Trading Software, a simple, ingenious investment tool

was developed by Chris Abbot at Pennycents.com

The software allows you to search the entire market for insider

trading activity based on your own criteria.

I haven’t found any other tool quite like it. They give you a

free 20 click trial to test the program out. That’s I found RFCG

Here is the download link,

http://www.pennycents.com/download/insider.exe

I recently spoke with Chris and have secured a special

deal for Pennyheaven subscribers. He will give a 6 month

subscription to their new OTCCBB magazine with the purchase

of the Insider Trading software.

To take advantage of this, don’t register the software through

the program but use the special link below specifically for

Pennyheaven users,

http://www.pennycents.com/software/insider/pennyheaven.php

This will ensure you get on their mailing list.

I’ll keep you posted

GP@Pennyheaven.com

>>>>>>>>>> DISCLAIMER, PLEASE READ <<<<<<<<<<
Please be advised that nothing within this email shall constitute

a solicitation or an offer to buy or sell any security mentioned

herein. Pennyheaven.com is neither a registered investment

advisor nor affiliated with any broker or dealer. All statements

made are our express opinion only and should be treated as

such. We do not accept any paid promotion. Please do your

own DD and trade only what is right for you.

To Unsubscribe: Reply with Unsubscribe in subject heading

To Subscribe: Reply with Subscribe in subject heading to:

GP@Pennyheaven.com