# How to handle a very speculative stock??



## Frznrth (Jan 24, 2019)

Hi
I went ahead and invested in a small speculative stock, Helius Medical. I did so because I really believe that their product is going to be a huge benefit to patients - I work in health care. I'm hopeful that this will translate into a good investment. This part I'm a bit iffy on. 

The stock is mostly "pre-revenue" / "pre FDA approval". It has been approved in Canada and they have 2 clinics up and running. FDA approval is supposed to be coming in the next few weeks (maybe longer with the shutdown - I hear the FDA is still making approvals - just slower)

The stock fluctuates wildly - people I think try to drive it up and down to suit their needs - not something I am enjoying - especially since it is mostly lower since I got in - of course.

I am hoping that the FDA approval will cause a nice rise in stock price. Any idea what a realistic peak would be? I have no way to make any sort of educated analysis of this stock. The ones who push this stock throw out these pie in the sky numbers that I am sure can't be based in much reality. 

Assuming it does rise sharply will it likely then go back down just as sharply as people take profit?

If it goes back down is it likely to stay down for a long time as it is a small company just trying to get started?

How can I best get out close to the top? A Limit Sell order? If so should I do this on the TSX or on NADAQ? Its a "dual traded stock" - I hear I can sell my TSX shares on NASDAQ. NASDAQ is more liquid but is this a good thing? Will more liquid help to get me a better price or if it is moving too fast will it drop to a lower price that I am hoping for? 

I know I can't expect any real definitive answers to most of my questions - it is a speculative investment. I'm just hoping for some good advice from people I can trust. 

May turn out to be a case study for why individual stocks should be avoided - at least by me - but I hope not. 

Thanks for your help.


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## OnlyMyOpinion (Sep 1, 2013)

Advice? I don't have any. You were smart enough to know when to buy it and how much to buy, so I'm confident you will know when to sell it based on your gut instincts.


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## Just a Guy (Mar 27, 2012)

Looking for advice from people you trust on two different anonymous forums...seems to me like this is an attempt to generate interest in a highly speculative stock for a typical pump and dump strategy.


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## james4beach (Nov 15, 2012)

Pharma stocks like this one are notoriously unstable. Nobody (except the insiders) can predict which way it might go, nor can anyone estimate a price. When you invest in a stock like this, you should be ready to potentially lose your entire investment. Some practical advice though:

1. The volume is considerably better on NASDAQ so I would trade it there
2. Never add to a losing speculative position. Do not buy more, even if it goes down.
3. Come up with an exit strategy

One exit strategy is the trailing stop (look it up). With extremely volatile stocks, you need to set a large stop % such as -30% or -50%. Or see other exit strategies described here:
https://www.schwab.com/active-trader/insights/content/3-exit-strategy-philosophies

My other tip is, next time you're speculating on a high risk stock, at least pick one that shows a steady up-trend price pattern. This will improve the odds that you can exit at a profit.

My guess is that you will lose money on this stock, and I would not recommend HSDT to anyone. Sorry.


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## Frznrth (Jan 24, 2019)

Hi
Thanks for the replies. No, I'm not a stock pumper. But I did post this on a few different boards - I'm just trying to get the best advice - more the better. I will check out the advice on setting up an exit plan. Thanks for the specifics. 

No sure why this still couldn't be a promising investment though - don't stocks go up with FDA approval? - assuming this is going to happen.


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## Frznrth (Jan 24, 2019)

I am going to use a Stop Sell on the stock. Ideally I would use a Trailing Stop but RBC Investing doesn't offer that - wish they did. Without this option I a planing on readjusting the Stop every day - several times a day. I'm having a hard time though knowing what the Stop should be. A percentage below the bid? A percent below the stock price? Do high and lows for the last whatever time period matter with a speculative stock? If the stock rises above what I am hoping for a reasonable profit then tighten the percentage?
Thanks for your help


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## Mechanic (Oct 29, 2013)

Lost about $40k on one of these pharma stocks when they decided to "restructure". What a ripoff some of them are. Be careful


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## Frznrth (Jan 24, 2019)

Thanks for the warning - The stock took a big hit after the company released a bunch of stock to raise money. The whole bit about company insiders manipulating things is what turns me off of something like this. The rich get richer. Hopefully I can scrape up a few crumbs along the way.


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## GoldStone (Mar 6, 2011)

Frznrth said:


> The whole bit about company insiders manipulating things is what turns me off of something like this. The rich get richer. Hopefully I can scrape up a few crumbs along the way.


You have no moral right to complain. You made a conscious choice to play in the seedy corner of the market.


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## newfoundlander61 (Feb 6, 2011)

The way I handle speculative stocks is not to buy them


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## GalacticPineapple (Feb 28, 2013)

If you want to invest in pharma I'd read Martin Shkreli's blog.


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## Mookie (Feb 29, 2012)

Frznrth said:


> I went ahead and _*invested *_in a small speculative stock, Helius Medical.


I would call this gambling, not investing. The best advice would have been not to gamble in the first place. Since you're already in, I wish you the best of luck getting out without losing your shirt. 

If nothing else, this will be a memorable lesson on the difference between gambling and investing.


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