If you are reading this message in plaintext or if you have an AOL address you must click on this link: http://www.smallcapnetwork.com/archive/listserv/20 081122-1.html and wait for a web page to automatically open up to properly read this newsletter.

Do We Trust This Schizophrenic Market? Voyant Sends a Letter - Fairly Predictable Friday’s 6% gain was pretty Stuff, But… exciting, right? Almost as exciting as Thursday’s 7% dip. Geez - prior to October, one swing of 5% or more Maybe you saw in either direction would cause high this week’s blood pressure. Now a daily swing of letter from 5% or more is the norm. The question Voyant is, does Friday’s big gain finally International’s hint that the market’s going to (VOYT) CEO Dana recover? Waldman? If you didn’t, I don’t I wasn’t kidding in a blog know that you entry Thursday that missed a whole suggested I’m willing to take a lot - it was a swing on a bullish trade now. brief update on However, I haven’t yet, for a very some of the good reason … I still don’t quite current trust this schizophrenic market. projects ….white space If you look back to late September, radio, how many times have we seen these RocketStream, huge, monster-sized gains? There and Aviation have been a total of seven major Broadband. one-day-wonder rallies (I’m not There was one counting small or tiny gains). You new item that know how many times we’ve seen two came up winning days back to back if one of though. them was a huge rally though? Not once. The market just can’t string Remember the together two consecutive decent days name … or at least it hasn’t in weeks. ‘RocketConnect’ That’s why I’m skeptical about - I suspect jumping on the bandwagon after we’ll be Friday’s upside explosion. hearing it more in the near (For a more detailed explanation future. As near about why you may not want to be too as I can tell, trusting of these extreme swings, RocketConnect I’ll refer you back to the October is RocketStream 30th newsletter “Why the Market for consumers. Can’t Put Two Winning Days RocketStream Together”.) was targeting businesses and However, there was something unique organizations about this latest dip that could with massive have changed things for the better data transfer on a more permanent basis. needs. RocketConnect So Bad It’s Good? is targeting end users - ordinary people Did anybody ever think we’d see the at their S&P 500 fall under 2002’s lows desktops and again? I fully expected nastiness laptops - to was on the way a year ago - that’s accelerate the just the cyclical nature of the speed at which market. However, I have no problem they send and saying I was surprised to see things receive get this bad, this quickly. On the information other hand, I wasn’t nearly as over the web. surprised about it after October’s carnage … things have a way of I couldn’t going from bad to worse when nobody perfectly tell, thinks it can get worse. but it appears as if this Well, that’s what we did on product is Thursday; the S&P 500’s low of 741 going to be eclipsed the low of 768 made in piggy-backed October of 2002. somehow with Internet So what? It’s supposed to services be bearish to hit new already being lows, but I’ve observed just as provided to often that it can be bullish. consumers. Somehow the market has a way of Maybe there’s knowing how to inflict enough pain some sort of and incite enough fear to steer the revenue sharing majority of the people in the wrong arrangement direction. And, I’d say falling to being forged new multi-year lows qualifies as a with ISPs. The nerve-racking misdirection. Now with reason I say most people probably convinced that is simply things are going to get worse - or because Waldman at least no better - it would be the said to think perfect time to start making a rally about the … a rally nobody would believe in potential sales until it’s well underway. (This volume on the would be a typical reaction in the same scale as middle of a recession, as we’ll see cable/telco in a moment.) volume.

Now, there are a couple of It’ll be challenges to my posed bullish interesting to idea. see what it is and how it The first one is, the other indices plays out. have not yet hit fallen to 2002’s lows. I can understand how the Everything else NASDAQ didn’t, as it put up some in the letter major gains between 2003 and 2007. I was fairly can’t understand how the Dow didn’t predictable. hit 2002’s lows though - it’s laden with financials, an automaker, and a By the way, did couple of industrial names that have everybody see been hit hard by this recession. Voyant’s most But, neither index did. The recent 10Q? It ‘challenge’ is simply the quietly came possibility that all the indices out Monday, and have to fall to new lows to get the was essentially much-needed psychological what we were capitulation. However, don’t assume looking for… it has to happen … I’m just saying a little more it would make it easier to accept revenue, but the bullish idea if it did happen nothing that way. life-changing. They pulled in The second challenge to a bullish $177K. For expectation is just a lack of comparison, believers, or more specifically, a they did $133K lack of bullish volume. The few last quarter. bullish days we’ve seen lately have So, the been made on mediocre volume, but increases are mediocre - and sporadic - isn’t coming. (Any going to cut it. Not only do the increase last bulls need to string two or three quarter is winning days together, they need to impressive.) grow their numbers so there’s some hope of longevity for any uptrend. What’s been fascinating for the last two Undervalued, Overvalued, quarters now is or Irrelevant? the massive Of course, the $64,000 question is gross margins one of valuations - are stocks worth we’re seeing. their current prices or expected Their cost of valuations? Funny thing about sales was $30K valuations … what seems to be last quarter, ‘worth it’ when stocks are on their and only $13.3K way up is different that what’s this quarter. ‘worth it’ when stocks are on the That’s a gross way down, even at the same margin of more valuation. Nevertheless, every stock than 90% … is eventually priced appropriately which is why (though not rationally), so… software is such an Stocks are now valued at less than attractive they were at the low point of 2002 business to be on a current price/earnings basis. in. I think On a trailing-twelve month basis margins will (the last four quarters), the S&P head lower as 500’s P/E is around 11, which hasn’t the other been seen since the 80’s. Nice. business ventures ramp The flip side … a up. But still, ‘current’ P/E is actually that’s history; the only thing that matters impressive. now is the future. RocketConnect will be the On a forward-looking basis, the S&P same way - once 500’s price/earnings ratio is even developed, it more attractive; it’s expected to be costs nothing about 10 over the next twelve to share it, months, which is a gutsy projection yet it still considering earnings fell by an bears revenue. average of more than 20% in this last round of quarterly earnings announcements. In other words, a lot of companies think next year is going to be a lot better than this year, according to the math. None of them have really explained why they’re still so optimistic though. Personally, I don’t quite see it happening.

You know what though? I’m not entirely sure all this valuation, projection, and recession banter should be your only consideration.

Stocks rarely trade at what they’re worth; they usually trade at prices the market thinks they’re going to be worth in the future. What’s that got to do with us now? Over the last 50 years, the market has actually gained an average of nearly 30% during the latter half of all its recessions. So, if you’re waiting for the economy (and earnings) to fully heal before diving in again, you’re probably going to be late to any rally.

My point is, don’t assume stocks can’t get cheaper either… the forward-looking P/Es are overly-optimistic. At the same time, don’t get bogged down or scared away by hefty valuations … valuations only matter when investors want them to matter. Sometimes it’s just time for the market to rebound even though P/Es are still high, which is why we watch the charts so intensely.

My bottom line? Monday - and even Tuesday - are going to be crucial for the bulls. Friday was a great start, but we’ve seen those fake-outs before. If we can get just a little more follow-through early in the coming week, it may be worth taking a bullish swing … even if just a short-term one initially. And who knows? Maybe this move will finally get the ‘big one’ started. I’m not counting my chickens though - I’m just thinking about making a little money on a possible upside move over a few days. Past that, we’ll see.

Stay tuned to the blog and the newsletter - every single day matters right now.

We Value Your Feedback

Got comments, questions or suggestions? Send ‘em on over: Email the Editor

If you wish to send a written request or inquiry, please send it to our physical address:

TGR Group, LLC 4653 Carmel Mtn Rd Suite 308 #402 San Diego, CA 92130

Ensure Newsletter Delivery

If you find the Small Cap Network Newsletter informative and profitable, please forward our newsletter alert service to like-minded friends and associates who share similar market interests.

Ensure Newsletter Delivery

To ensure newsletter delivery, you can add any additional email addresses you may have to the Small Cap Network Member List. Receiving the Small Cap Network Newsletter in multiple locations is the best way of making sure you don’t miss the next investing or trading opportunity! For web based email addresses, the Small Cap Network recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery.

D I S C L A I M E R: The Small Cap Network is an independent electronic publication committed to providing our readers with factual information on selected publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible. Moreover, as described below, this publication accepts compensation from certain of the companies which it features. TGR Group, LLC which owns this electronic publication, also accepts compensation in connection with the dissemination of information regarding the companies featured. This publication should not, therefore, be regarded as an independent publication.

To view our compensation on every company we have ever covered, visit the following web address: http://www.smallcapnetwork.com/profile_disclosure/ for our full Profiles and http://www.smallcapnetwork.com/alert_disclosure/ for Trading Alerts.

TGR Group, LLC has been paid a fee of $30,000 cash and 1,000,000 shares of newly issued restricted stock by Voyant International Corp. for coverage of the Company.

All statements and opinions expressed herein are those of the editors and are subject to change without notice. A profile, description, or other mention of a company in this publication is neither an offer nor solicitation of an offer to buy or sell any securities mentioned. While we believe all sources of information provided to us and contained in our publication to be accurate and reliable, we cannot and do not guarantee the accuracy of information we received from third parties.

From time to time TGR Group, LLC sells shares in the open market it receives as compensation for coverage of client companies. Since the shares are received as compensation for services and not for investment purposes, the editors do not view the sale of the shares as contradictory to any advice delivered in the content. This should be viewed as a conflict of interest by shareholders or prospective shareholders of the client companies.

The editor, members of the editor’s family, and/or entities with which they are affiliated aside from TGR Group LLC itself, are prohibited pursuant to company policy from owning, buying, selling or otherwise trading stock for their own benefit in the companies who appear in the publication unless such activities are specifically disclosed in the newsletter.

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED IN THIS PUBLICATION. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK.

We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission (”SEC”) at: http://www.sec.gov and/or the National Association of Securities Dealers (”NASD”) at: http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at: http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC’s EDGAR page. The NASD has published information on how to invest carefully at its web site. TGR Group LLC’s mailing address is 4653 Carmel Mountain Rd. Suite 308 #402 San Diego, CA 92130.

The information found in this profile is protected by the copyright laws of the United States and may not be copied, or reproduced in any way without the express, written consent of the editors of smallcapnetwork.com.