Changing channels

New company employs old technique to make money in the market
Buy low, sell high. That’s the axiom most known to those investing in the stock market.
Yet, why does it seem that so many investors do the opposite far too often — especially in the roller-coaster world of the New York Stock Exchange and the NASDAQ?
Wouldn’t it be nice if someone could tell you, as if clairvoyant, when to buy and when to sell, taking the guesswork out of the process?
That’s exactly what ChannelingStocks.com has set out to do.
The Port Washington-based company, owned and operated by Tim Thompson and Tim Desotell, researches publicly traded companies and evaluates whether or not the stock price of the company consistently moves within a range of high and low stock prices. Less than 1% of the almost 25,000 stocks publicly traded fall into the channeling pattern.
Desotell, the former owner of the Le Peep restaurants, was using the investment technique when he introduced it to Thompson. The problem, Thompson recalled, was that they couldn’t find a company on the Internet that researched “channel companies.”
So they started their own.
“We were spending all of our time doing the research on it, and it’d be 2 a.m. with bleary eyes and we finally said, ‘We should start our own Internet site,'” Thompson said.
The site, www.channelingstocks.com, provides at least 12 new stocks per week for subscribers to review. However, it is strictly a research site; the company does not handle transactions, and strongly recommends “practicing” the technique on stocks before actually investing in them.
“You have to watch to see where the stock is within the pattern,” Thompson says. “They could buy at $2 and the stock could continue to fall below that.”
Subscriptions can be purchased on a monthly, quarterly or annual basis and have been increasing rapidly over the past few months. And although Thompson wouldn’t reveal the number of subscribers, but did say they had an 80% retention rate on the month-to-month subscribers.
Thompson says that the beauty of the theory is that “regardless of what the market does this theory is unaffected by it.”
Something to consider in this roller-coaster market.
July 20, 2001 Small Business Times, Milwaukee