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Tinley Beverage Company (TNY) continued...
It is easy to be critical of the above two scenarios because
both are based on buying and remaining committed to an investment in Tinley. However both assume, to be conservative, that the investor waited up to two months before making an investment in Tinley based on when the case study was published. It is even easier to be critical of the 2nd scenario as that one is based on selling and buying back Tinley. That is why the second scenario has a few built in conservative safeguards:
(1) It assumes the investor waited even longer to invest and missed the $0.035 to $0.045 share price range and bought in at $0.05.
(2) It assumes the investor missed the “high” share price when they sold in the fall of 2016 and sold as the share price commenced its decline.
(3) It assumes the investor missed the low when they bought back in the spring of 2017 and bought as the share price began its ascension.
(4) And the same for the November 2017 sell and the December buy.
(5) Further, it assumes the investor only committed $10,000.
(6) It considers only three cycles of “buy/sell”.
None of the above considers a qualified Accredited Investor participating in the 2016 private placement where warrants, if still held, have a $0.25 strike price. Yes, that is right – one could exercise those warrants now for $0.25 a share and those shares do not have a holding period and can be sold, once received, at the prevailing market share price.
If you download the price history of Tinley, you can quickly see that even a $1000 initial investment in the spring of 2016 with just over a dozen sell/buyback cycles would be worth over $1,000,000 on December 22 and one could have withdrawn a few thousand dollars along the journey.
In that same first article back in the spring of 2016 was the strategy to embrace Fundamental Analysis but use Technical Analysis to time entry and exit points. Using our first case study as an example, one could have had an investment in December 2017 valued over $1,000,000 based on an initial $1,000 investment – and would have cashed out a few thousand dollars along the way. A more conservative strategy would be to only sell half of the holdings each “sell cycle”. Under that strategy, that initial $1000 investment would have been valued at over $500,000 in December 2017 and the investor still would have withdrawn more than the initial $1000 investment over that time.