Investing without day trading on CAPX

Not everyone has the luxury of being able to constantly check their second life stocks, and since day trading requires the ability to change your buy and sell positions on the fly. It makes it nearly impossible for those individuals who can’t find the time to constantly check stocks to day trade.

The solution is to pick stocks that have great growth potential, and a strong dividend policy/performance.

Two companies really come to mind when you put those two qualifiers on the search.

ADS - If you haven’t heard the news, or are new to CAPX, ADS is performing wonderfully. Since IPO the company is up 71%, and total earnings are up over 670%. The price to earnings ratio is under 13.5 (S&P 500 standard is 16). Their gold hunt program is just starting to come online and has a large amount of room to grow. Their year to date (YTD) dividend yield as of the 5th will be 7.1% (based on 3.48 share price), extend that over a year and compound it and you are looking at an over 15% return on investment (ROI). IF you would have bought the company at IPO or for around L$2 you would have already made near 13% of that money back. All of this in only 5 months, the clear front runner for best investment for returns today. The company is undervalued by about L$1 to L$2 (from 3.48), and that is not factoring in expected growth. The only issues I see moving forward, all SL Stocks seem to hit a wall when it pertains to stock price. A number over 5 seems to scare people away; price movement and volatility seem to go out the window until something extremely drastic happens. Be it a large investor buy or selling, or the company making or losing a ton of money out of the ordinary. Simply put, the higher it goes the harder it will be to keep going up, but that’s just math.

CAPX – As all the listed companies grow as more people show up to invest in companies on the exchange. There is one undisputed direct beneficiary, the exchange itself. Skip has taken a failing system and turned it on its head. Gross revenue has went from L$45,940.67 to L$700,751.89. An over 1500% increase since February. In that time he managed to pay off a L$558,388.5 loan, add programing content, and restore the CAPX brand. There is one thing that CAPX has that no other company does, all other companies must run through CAPX. If CAPX disappears the exchange goes with it and so does the ability to trade stocks (for the short term at least). As Skip has said, “we are not going anywhere”. CAPX comes with a level of security in being the standard company. Couple that with a consistent .05 to .1 dividend per month, and you are looking at the safest company giving investors an annual return of min 6% upwards of 12%, and it’s not even done growing. As with ADS, CAPX is undervalued by L$ 1 to L$ 2, (from L$ 8.30) not factoring in future growth or returns. We will see pressure from people looking to make a profit and devaluing from those worried about buying an “expensive” stock. My only concern will be to see how the exchange handles its first scandal, time will tell.

If you are the type who does not have time to watch the market, these are two companies you should be interested in watching, or even buying. Try to buy in as low as you can, but don’t miss the opportunity.

On a side note, these companies make wonderful investments for institutional investors. To me an institutional investor is anyone managing a fund, or with L$ on deposit in excess of L$100,000. Since there is not enough volume to day trade with a large some of capital yet. Buying into a growth company such as the two above can be the best way to return profits for you, or your clients.

Questions, comments, concerns, comments below.