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Howdy, folks!

I've owned GROW since 6/06 and although it's always been very volatile, I haven't seen it behave quite like it has for the past few weeks. Is this a short squeeze I'm seeing? If so, why didn't it peter out shortly after earnings (I believe at the time of the last earnings report on Nov 9th, there was only about 1 1/2 day's worth of shorts - 1.1M shares short vs. 867k avg daily volume).

If this is a short squeeze, it seems time to sell, and buy back at bargain prices later... If this is not a short squeeze, then this thing seems to be getting a bit ahead of itself, does it not?

Either way, I've been selling here and there, but it keeps climbing, I may never be able to afford it again!

Any comments are welcome - please feel free to pick apart my analysis - you won't hurt my feelings - I'm here to learn.

Thanks,
Fleance2000
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I agree that this seems too long to be only a short squeeze. I would guess that people are just starting to notice the company and realize that with its current explosive earnings growth it was greatly undervalued.

Since they are raising some of their fees in december, it seems likely that that they will keep this momentum going through 2007. If that is the case then I see the share price going even higher. If the price drops significantly on no negative news then I will buy more, otherwise I will just watch and enjoy.

- Matt
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Hi Matt & Fleance2000

If you read the book "Secrets for Profiting in Bull and Bear Markets" by Stan Weinstein it states just keep with a stock in stage 2 you, never know how high a stock will go in this stage, it is dependent upon the demand.
At the moment the demand is 1.1 million with the average daily volume being 0.8 so there still is quite a demand for the stock. Next the P/E is just 35 which is not high for such a stock. My dcf calculation puts it at $65, so sit back and enjoy the ride. In January there is a 2:1 split and a 0.25cps dividend. It could well exceed the $65 before the split. If it starts to decline in stage 4 you can sell off with some of your gains. You could set a sell stop at $55 if you wish to preserve your gains, but remember is the stock at any time hits that number your stock will be sold at market price and if it goes up may be expensive to buy back in.


EID
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I originally purchased GROW at a bit above $17/sh. several months ago. This stock was brought to my attention by former Fool analyst Tom Jacobs who along with former Fool Jeff Fischer writes an investment newsletter. Tom actually recommended buying GROW at around $12.50. A couple of weeks ago he recommended selling GROW. He was concerned that the market cap was becoming excessive in relation to assets under management. As a general rule of thumb an asset management firm is considered fairly valued when market cap is about 3% to 5% of assets under management. In the case of GROW, with about 4.6 billion of AUM as of Tom's writing, market cap is approaching 10% of AUM. Tom also stated that AUM have been flat since last spring. He is also concerned by the sector concentration of GROW's funds. Natural resources and emerging markets stocks attracted a lot of investor dollars in the first part of 2006. GROW benefited a great deal from this trend. If these sectors fall out favor, there could be significant outflows from GROW's funds. I'm not predicting this will happen, but I think we have to be aware of that possibility.
I would like to add that Tom Jacob's is a value investor. He's good at finding undervalued stocks and doesn't hesitate to sell them when he feels they have reached fair value. I would consider him quite a bit more conservative than many who participate on this board. I will also add that he is impressed with GROW's management, as am I. They held a good deal of cash in some of their funds in the latter part of spring as they felt there were few opportunities in the stocks they liked and also felt they would find better opportunities later in the year. In hindsight it looks like they were right.
Personally, I sold half of my position at around $50 and am letting the rest of it ride for the time being. Since it is held in my IRA, taxes are not a current problem. Good luck to all. This has been a fun one to own and it's been nice seeing the shorts getting squeezed (especially the hedge funds).

Don
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To me this is a classic squeeze. Nine million in the float or something like that and tons of shorts. How long the holders are going to hold it is the question. Like ERS, it really doesn't matter what it's worth. It may be worth 67 bucks, but so what. Just watch it for a big spike up or a big dump. That's all I can say.
Carol
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Thanks for all the help. I'm glad to see a diversity of opinion on this - I guess that's what makes trading fun.

Steve
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Also, there is a gap at 55, which will probably close. There is another one in the mid thirties, which hopefully wont close. CROX closed it's gap already.
Carol
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EID and other Fab Followers,

I couldn't agree with you more on restating Weinstein's wisdom of holding onto phase 2 stocks and not try to guess the top. Unfortunately, I did not. I've traded GROW 3 times in it's run up and sold off @ 49 after several days of sideways action. Everyday this week, I've just about injured myself screaming at the top of my lungs as I've watch GROW spike up -- missing at least $10 and finding it tough to make the decision to re-enter. I kept being spooked by GROW's recent past when it had a violent colapse (short attack?) when it traded in the twenties. So, I am a reformed sinner and will try not to cut and run as quickly and wait for a confirmed phase 4. Alas, let's stay with Stan...

Prosperous Investing,
Don
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I put a trailing stop loss order on my grow position. With over a 100% return in 7 weeks I decided to preserve the gains, After HSOA and ERS I felt it was wise to do that, I also did that with NTRI.
Verticelli
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BTW, HSOA now has an A-accumulation rating on IBD.
Carol
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I put that post in the wrong place, oh well. Grow closed the gap today. We'll have to see if it bounces.
Carol
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Don what is the name of the newsletter?
Thank You,
Verticelli
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The newsletter is called The Complete Growth Investor. The web address is www.completegrowth.com

Don
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Thanks,
Verticelli
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