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By: AllPennyStocks.com
It was a recession that had even hardened, grizzled, experienced economists
scratching their heads, caused millions worldwide to collect pink slips, and
precipitated worry throughout the financial world, much as the panic over the
H1N1 pandemic overtook bodies and souls all over the globe. Such was the
atmosphere with which investors had to cope with in 2009.
The economic downturn – which, technically, began in the last quarter of 2007 –
characterized itself by not only its length, but its depth, width and harshness.
The first danger signals began appearing with the credit crunch in the summer of
2008, in which many Americans defaulted on their mortgages, finally culminating
that fall in the collapse of Lehman Brothers, and with it, the near collapse of
the banking system. It caused tanking of the stock markets, forcing major
corporations to the brink of collapse, and the federal government to step in,
issuing billions of dollars to keep these entities on their feet.
As a new administration took office in Washington in January, such was the
downcast mood of many in the nation that any glimmer of optimistic news – such
as a corporation declaring it had lost only a button rather than its entire
shirt – was greeted with hurrahs from sea to sea. Realistically, only when
sights are set higher can a recovery be said to be taking place.
(To be fair, third-quarter GDP finally showed a gain in America – by 2.8% -- the
first such period of growth in six quarters, making dreams of progress more
tangible.)
Not only was the erstwhile behemoth General Motors tottering (for stock
purposes, it’s now known as U.S. Motors Liquidation Company, and is now a penny
stock, trading around 60 cents U.S. under the symbol MTLQQ) but other car
companies felt the pinch; Honda, Toyota and other offshore bigwigs laid off
during the year. Microsoft sent much of its staff packing last winter, too;
proof it was not immune.
And the bad news seemed to follow on itself; the unemployment rate accelerating
from 7.1% in December 2008 to a peak of 10.2% this October. But as the year drew
to a close, the Federal Reserve, not seeming to want to rock the boat, kept its
Fed Funds rate at record-low levels at or around zero, acknowledging that the
economy was far from out of the woods, but projecting that growth could gallop
ahead as much as 4% in this year’s fourth quarter, the fastest rate in four
years.
Finally, just as things seemed to be getting better – or at least, less gloomy –
more warning buzzers sounded from a nation half a world away. The day after
Thanksgiving, the Middle Eastern nation of Dubai declared it could not foot
about $10 billion U.S. in debt, a piece of news that sent markets around the
globe into a tizzy, until a lifebuoy was tossed from the neighboring Arab
emirate Abu Dhabi. The bailout in early December allowed Nakheel, the real
estate wing of Dubai World, to repay a $4.1-billion bond that had matured the
previous week.
The relief registered on Wall Street, enabling roller-coaster markets to resume
their upward journey. After revisiting gulches in March they hadn’t occupied in
12 years, bigger-cap equity markets moved as much as 60% higher before the snow
fell. The redoubtable Dow Jones Industrial Index dipped as low as 6,547.05; by
year’s end, it had again surmounted 10,500. The S&P 500 had gone as low as 676,
but had reached above 1,100 in December. The tech-heavy Nasdaq reached an abyss
of 1,268 before working its way above 2,200 by Christmas.
The Russell 2000 Index, measuring the performance of small-cap stocks, mirrored
its bigger cousins in collapsing in early March at the 343 mark, before
recovering to a level around 630, before settling to just above 600 as Christmas
approached.
Two stocks in particular stood out in 2009 for AllPennyStocks.com followers:
Maryland-based GenVec Inc. (Nasdaq:GNVC) and Taiwan-headquartered Himax
Technologies Inc. (Nasdaq:HIMX).
During 2009, GNVC distinguished itself by winning FDA designation for its lead
product candidate, TNFerade. GenVec signed a contract for the development of
influenza and HIV vaccines in support of the Vaccine Research Center of the
National Institute of Allergy and Infectious Disease, part of the National
Institutes of Health. GNVC was featured by AllPennyStocks.com back in January,
when its stock price was at 41 cents, climbing out of a 52-week gully; it
catapulted ahead to $1.18 in November, before settling back around 93 cents. The
maximum percentage high for AllPennyStocks.com investors for GNVC would have
been 188%, but if you weren’t lucky enough to get out at that price, you would
still be sitting comfortably up 127%.
For its part, HIMX introduced in December its iCT (Infinity Color Technology),
which enables significant power saving for TFT-LCD TVs and monitors, regardless
of CCFL (Cold Cathode Fluorescent Lamp) or LED (Light-Emitting Diode)
backlights, while enhancing image quality. Developed by one of the company’s
subsidiaries, the innovative iCT is a unique and cost-effective approach in
optimizing power efficiency and image quality.
While its bottom line saw better days in 2008, the company is confident its
cutting-edge TV technology can attract enough members of the public – and enough
investors – to reverse that trend. Also the subject of a January write-up on
AllPennyStocks.com, HIMX tilted the stock price scale at $1.38; the price
galloped ahead to $3.97 in July, before settling back by year’s end to $3.01.
The maximum percentage high for AllPennyStocks.com investors for this Company
would have also been 188%, but if you’re timing on that stock was also off, then
you would still be sitting comfortably up 118%.
Still, what the small-cap market teaches us is that there are still bargains out
there, run by intrepid souls who can see past the distractions of bad economic
news and focus on bringing out quality products that can draw buyers, and with
it, investors ready to take a chance – all of which bodes well for an upcoming
year that should show off the market’s recuperative powers.
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