What do you think of Wisdom Tree?

E

eagle488

Before we start this discussion, I would like to firmly state that Wisdom Tree trades on the pink sheets. As most of you know, these are highly risky and speculative ventures where you could lose a lot of cash if you dont know what your doing. If you are reading this and dont know what the pinks are then please visit the following wikipedia page:

http://en.wikipedia.org/wiki/Pink_sheets

Trade this equity at your own risk...
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So now let me start the discussion. I came across GROW which appears to have been a 24 bagger in the last 2 years. Since the summer, it has spiked over 300%. I now wonder what other similiar investment vehicles are out there that also could deliver a massive return in 2 years.

I came upon WisdomTree and the following SeekingAlpha article demonstrates my stance on the issue:

http://financial.seekingalpha.com/article/21955

WisdomTree is different then other stocks in the pink sheets and here is why:

http://money.cnn.com/magazines/fortune/fortune_archive/2006/07/10/8380844/index.htm

http://www.wisdomtreeinvestments.com/press/pdf/Arthur-Levitt-Joins-WTI.pdf

The management team is filled with Wall Street and business all-stars plus one former SEC Chairman.

I do not believe WisdomTree is a buy right now. In fact, it most probably is a short right now type stock. It has climbed too far too fast above the 50 week moving average. If you look back through history, when it has spiked before (Oct 2005 and May 2006), it has come right back down to the 50 week moving average. In this case, the moving average is at 4.28.

http://stockcharts.com/h-sc/ui?s=WSDT&p=W&b=3&g=0&id=p33940805660

My *opinion* is that next year will be a train wreck in the stock market with all the different pressing economic issues. There will be at least one good 10% pullback, possibly more. The total market will revert down to the 200 week moving average.

My thesis is that Wisdom Tree is going to get hit as well. It may fall down below the 50 week moving average. Possibly below 4 dollars.

However, it will be time then to get into the stock. I say to get in the stock with an investment under $10,000 when it does fall hard and fast. Then hold it for two years much like GROW. Eventually, this company will get listed on the nasdaq or amex. Probably in a year or so.

I do not ever trade on the pink sheets. However, I would easily buy into a small position of 10 grand when it reaches the 50 week moving average and hold that position for as many years as possible. You do not ever see this type of management team on a pink sheet listed company.


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I will like to say again firmly and matter of factly. The pink sheets are a dangerous place to trade. You do so at your own risk. The risk is very substantial.

To me this is not a trade nor is it an investment, but a bet that is made in a similiar fashion down at a racetrack.
 

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Wow. Interesting find!

I find the biggest question I have to be... how did they get 1 billion under assets for their ETF's if they're so small that their stock trades on the OTC?? I mean who would buy an ETF run by a company so small??

This is a bit odd too, and I don't understand the discrepancy. I found them on Morningstar, WSDT, but they went bankrupt in 2nd quarter 2003? There's no financial reports after that??
http://quicktake.morningstar.com/Stock/financials.asp?Country=USA&Symbol=WSDT&stocktab=finance

Per Morningstar's SEC filings for Wisdomtree:
http://quicktake.morningstar.com/Stock/SECDocuments.asp?Country=USA&Symbol=WSDT&stocktab=estimates

Their SEC filings end in 2002, but it was a different name??

I'm not saying this is a bad investment... as you are totally right, they have actually well regarded index funds on the market now (which puzzles me). But doesn't it appear that they used their company to wash out their investors in 2003 based on the limited info listed, or perhaps the info is just wrong?

You've seen Loral, Globalstar, AT&T, Kmart do this over the years... and stay in business after eliminating all their debt by making their stocks go to 0... then relisting with a 'new' company that even goes back to using the old symbol after a few months with an added letter. If that's what this company did, it would be impossible to trust them longterm. This is a worrisome thing unless Morningstar got the info wrong or incomplete.

If that's not the case... it sounds like FANTASTIC potential. Thanks for the tip:).
 
Quote from hels02:

Wow. Interesting find!

I find the biggest question I have to be... how did they get 1 billion under assets for their ETF's if they're so small that their stock trades on the OTC?? I mean who would buy an ETF run by a company so small??

This is a bit odd too, and I don't understand the discrepancy. I found them on Morningstar, WSDT, but they went bankrupt in 2nd quarter 2003? There's no financial reports after that??
http://quicktake.morningstar.com/Stock/financials.asp?Country=USA&Symbol=WSDT&stocktab=finance

Per Morningstar's SEC filings for Wisdomtree:
http://quicktake.morningstar.com/Stock/SECDocuments.asp?Country=USA&Symbol=WSDT&stocktab=estimates

Their SEC filings end in 2002, but it was a different name??

I'm not saying this is a bad investment... as you are totally right, they have actually well regarded index funds on the market now (which puzzles me). But doesn't it appear that they used their company to wash out their investors in 2003 based on the limited info listed, or perhaps the info is just wrong?

You've seen Loral, Globalstar, AT&T, Kmart do this over the years... and stay in business after eliminating all their debt by making their stocks go to 0... then relisting with a 'new' company that even goes back to using the old symbol after a few months with an added letter. If that's what this company did, it would be impossible to trust them longterm. This is a worrisome thing unless Morningstar got the info wrong or incomplete.

If that's not the case... it sounds like FANTASTIC potential. Thanks for the tip:).
More...

Umm, this is probably worse than a Vegas crap-shoot . I snagged a few for my kids with some parked cash in their folios.
It's interesting but way to many negatives.

Probably be next years write-off.
 
Oh... I wouldn't assume that. It's only if they like doing hokey accounting would that be a problem. EFTs are insanely popular, and the thinking behind investing in them is not a bad idea at all.

But I think eagle is right on about watching this a bit longer first. I don't think you necessarily did badly, since if the market rises, you can sell for a profit anyway. I doubt you will need to hold it very long, there's a lot of people who would think the same way and are very willing to take the risk (the bigger the risk, the bigger the potential gain).

Use your TA on it... it's not a big risk, there's a lot more buy volume than sell volume over the last 3 months, and not everyone likes to read SEC filings, or draws the same types of conclusions. Think of it as a swing position:P.
 
I did say to wait for the correction to the 50 week moving average. That average is at 4.39. It has corrected twice in the past to that average, for example, back in May.

I love the management of this company. It has better management then most other similiar companies. However, I think a bunch of guys in a closed off room and 4 20-inch monitors have bid it up a little too high.

There is a 90% chance of a huge market correction in January. Wait until after that correction and then consider getting in.
 
What say you eagle?

Been pretty much straight down since you mentioned it- but to your credit you predicted that, we also had a 4% correction in the Russell top to bottom... is now the time for wisdomTree? Or wait for another buck to the downside?
 
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