Once the toast of Wall Street and Bay Street, joyless tech traders have become the toast of Mudville.

They’ve been frightened out of their wits by the stock market geniuses and written off as stark raving lunatics.

They’ve been ridiculed, scorned, scolded, caned and sentenced to stand in the corner of the classroom until the next bull market in (fill in the blank):

a) 2005 b) 2010 or c) 3010.

Consequently, many shell-shocked tech traders have become gun-shy, swearing off penny stocks and anything that has anything to do with a computer. Internet, IT, wireless, software, telecom, e-commerce have all become dirty words not to be uttered in public.

Economists, market strategists and money managers have all ganged up on the tech trader sporting the cigarette and blindfold.

The smart money has been singing from the same song sheet: Techs will not lead a recovery in the stock market!

Which, of course, explains why beaten tech stocks have been leading the recent resurgence in the market.

Gutsy traders are making a killing in the market again and they’re doing it with the much-maligned tech stocks.

All you have to do is scan the performance of one crack Canadian newsletter that has been kicking butt in the past two years by bottom-fishing battered but cash-rich tech stocks on violent market corrections.

StreetSignal, featuring in-depth research by Danny Deadlock and market forecasting by technical analyst Scott Nelson, issues online research reports free to subscribers and offers recommendations to subscribers for an annual fee of $144.

Unlike many newsletters that are long on hype and shy on substance, StreetSignal (www.streetsignal.com) offers a refreshingly straightforward approach to research, based on fundamental and technical analysis.

Year to date, StreetSignal’s portfolio has added 15 stocks by targeting prospects that trade well below cash value and stealing them ahead of the herd. Most are classic techs. Most are software providers. Most are penny stocks. Most you probably haven’t even heard of. Doesn’t matter.

Our calculations show the average gain on these 15 stocks – 12 current holds and three others that have been sold at big profits – during one of the worst bear market years in history is 77 per cent!

StreetSignal, which is based in Hanna, Alberta, caught some of these stocks near their 12-month lows and many of them have more than doubled just in recent weeks.

StreetSignal sold Bombardier (BBD.B-TSX) at an 85-per-cent profit before the stock tanked again recently. It sold Certicom (CIC-TSX) for a 115-per-cent gain, CCC Internet (CIS-TSX) for a 124-per-cent gain and Corel (COR-TSX) for a 101-per-cent gain.

Among other winners of active stocks in the portfolio purchased this year are SeeBeyond Technology (SBYN-Nasdaq), up 115 per cent; Mainframe Entertainment (MFE-TSX), up 95 per cent; and Microtune (TUNE-Nasdaq), up 85 per cent. Twelve other stocks in the portfolio have doubled or better, including SeeBeyond, which was sold at a 405- per-cent profit before it was repurchased.

StreetSignal did miss the recent tripling of Nortel Networks (NT-TSX).

Streetsignal recently compiled a list of 75 technology and biotech stocks that are trading near cash value or at major discounts to cash value.

In one of its dispatches in early November, StreetSignal called for another correction before the end of the year that may provide another hot buying opportunity.

“January is typically one of the strongest months of the year for small caps and November and December should set up some significant buying opportunities once again,” stated the newsletter.

“Just don’t be like the cows who do nothing but follow the tails in front of them. These are the same beasts that followed the herd on to a frozen dugout while their buddies were dropping in one right after the other. Timing is important in these markets and if you manage risks properly, good money can be made.”

The anecdote about the bonehead cows, supposedly, is a true.

Or perhaps the cows were really those overfed tech traders who plunged through the thin ice of the tech bubble.

* STREET TALK: Do Canadian small-cap and microcap stocks still have some legs after outperforming this year?

Calgary analyst Garey Aitken, who manages one of the hottest funds in Canada, the Bissett Microcap Fund, believes so.

“We believe that small caps still have more attractive valuations than big-cap stocks, everything being equal,” says the director of equity research at Calgary-based Bissett. “We’re still enthused by what we see in that area.”

The Bissett Microcap Fund, featuring unheralded names such as Alberta companies BW Technologies (BWT-TSX) and Parkland Income Fund (PKI.UN-TSX), formerly Parkland Industries, boasts a phenomenal 12-month gain of 49 per cent (through Oct. 31) and is up 24.4 per cent since its inception two years ago.

The portfolio has a 47-per-cent weighting in industrial products.

For Aitken’s top picks, see Pro’s 3 Stars this week.

* SAGE WORDS: “Speculation demands cool judgment, self-reliance, courage, pliability and prudence.”

– Peter Wyckoff, author of The Psychology of Stock Market Timing.




HOT ALBERTA STOCK: Thermax International
THM-TSXV 18 cents
Up 15 cents (+400%) on 185,000 shares
(for week ending Nov. 22).
Thermax issued a press release saying there was no material change in the company’s business or affairs but the stock's strange behaviour suggested something was up. The stock did all its trading in one day, vaulting 400% on 185,500 shares and then ended the week with a wide spread, bidding five cents and asking 16. After the flurry of trading, the Calgary manufacturer of unique cement products said its board of directors had unanimously agreed to solicit offers for certain assets.



COLD ALBERTA STOCK: Genesis Land Development
GDC-TSX $1.85
Down 85 cents (-31.5%) on 4,066,400 shares (for week ending Nov. 22).
Genesis stock fell out of bed with a resounding thud (almost three million shares traded in one day) when Mattamy Development said it was terminating a letter of intent to acquire the Calgary community builder. Genesis then announced record revenue results but the stock made only a minor recovery on the news. Nine-month revenue through Sept. 30 was $34.42 million for pretax earnings of $4.88 million.