Beware: Keep Out!

The selling pressure is on, and fears of international economic turmoil are once again at the heart of the market. Last week we recommended cashing out of the market and storing your 401k's in a safe place until the market volatility settled. We still believe this advice to hold true, until definitive confirmation that the market is settled. Continue to look for dip buyers, especially near close of market to begin seeking a market bottom. We appreciate a 3 day trend upward with dip buyers to feel comfortable putting our money back to work. Until then, stay clear of a wake that may last. If you are feeling risky, you could short some of the significantly over bought sectors including retail. Also, continue to keep an eye on job's reports. Investors are starting to fear that the jobless recovery may not be as practical as once thought. Good luck and we will advise you when we are putting our money back into play.

Penny Stock Update

Last week we recommended buying shares of MMUH and HPNN. Today those shares are up over 200%, and continue to move with heavy volume. It is still early in the game, and the e-cigarette is still a new market that has unlimited room for growth this year. BIEL had some good PR today, which an announcement of distribution agreements in Japan. We continue to believe this company could provide a strong return, but we recommend waiting for audited financials to confirm the companies cash flow position which we feel will be strong. Please feel free to become a follower of the blog (on the right) or leave comments. We will be adding some links with product reviews of the e-cigarette and BIEL Actipatch in the short term.

Bail before Bernake & Bank Reform

There are some key decisions and votes taking place this week that could drastically change the outlook of the market. Bank reform, as well as the Fed Chairman Election are on the radar this week which are sure to shake the market up. But which way? It is our view, as well as many, that this week is going to see some drastic swings for both the bulls and the bears. BHMP is liquidating all of our blue chip stocks in order to avoid a potential large looming market correction that may have started last week. The driving force? Bernake. If Bernake is not re-elected as the Fed Chairman, someone who many consider the savior of the American financial system, the markets will lose a lot of faith in U.S monetary policy. Investors right now have a good feel and understanding of Bernake's direction for interest rates, inflation control, and other financial metrics. If he is out, then investors are going to flee not knowing what the effect will be on monetary policies. Can you blame them? To compound this potential threat, Obama is attempting to push a regulation on big bank profit. Although many would agree that banks and politicians should not be making so much money when they can be viewed as a direct source for the economic downturn we have witnessed. But investors won't be happy, after all, if you take away (regulate) profits from any publicly traded company, wouldn't you sell? Many continue to invest in banks in the hope that large dividends will return in the near future, but if regulated, the banks will lose those same investors that have helped bring their shares to reasonable levels. With everything on deck and up in the air, we are liquidating our blue chip stocks in order to let the waters calm. If everything follows a best case scenario, the market will gain back its losses, and you will have plenty of time to get back in. However, if it goes the other way, the potential downside could be extremely harsh. Is it worth the few percent you will gain back to risk being caught in another market downturn? We recommend waiting it out, and getting back into your positions of interest when the dust has settled. Good luck!

A Great Spec Play.....

Here is a play that you may very well be able to catch a quick double on, or even more. Hop-on (HPNN) is the distributor for an electric cigarette made USACIG. A key ruling determined that the FDA will not be able to interfere with the distribution of the product. We believe that this may be a product that could capitalize on the massive smoking and tabacco market. If marketed properly this could be a huge and novel product. This is much like MMUH, noted yesterday, but already distributing. We recommend a buy and hold on the next dip.

HPNN - Current Price - $.0059

Current Play - MMUH

BHMP is currently investing in Mobile Media Unlimited Holdings after their recent announcement to buy Tzufuma, the Florida based company marketing the popular and expanding e-cigarette.

Current Share Price - $.0175

Top 5 Small Cap Picks for 2010

In 2009 we had some great calls and some not so great. We finished the year up over 600%! We continue to explore the small cap world looking for the next big thing. The world of small cap is not for everyone because it comes with an undeniable risk. However, if you can afford it, and have the stomach, here are our 5 picks for 2010!

Company: Cell Therapeutics

Symbol: CTIC

Key drug: Pixatrone

Potential market cap: $1.1 billion

Target share price: $13

Company: Keryx Biopharmaceuticals

Symbol: KERX

Key drug: KRX-0401 & Zerenex

Potential market cap: $600 million

Target share price: $18

Company: Bioelectronics

Symbol: BIEL

Key product: Actipatch

Potential market cap: $150 million

Target share price: $.60

Company: Pacific Ethanol

Symbol: PEIX

Key product: Ethanol

Potential market cap: $250 million

Target share price: $8

Company: Jayhawk Energy Inc

Symbol: JYHW

Key product: Oil & Gas

Potential market cap: $215 million

Target share price: $6.50

These are all based on successfully employed and developed products. Add them to portfolio but make sure to keep stops on them in case things go sour. Good luck!

What to expect in 2010

With the closing of 2009 just ahead of us, it is time to start looking to what next year has in store for the market. However, before you get to far ahead, it would be wise to take a close look at your portfolio and determine which securities are dead in the water. Many of you have probably secured a substantial amount of gains throughout the year with the market rebounding significantly from its intra year lows. If you currently hold shares of a stock you know has a bleak outlook, it may be in your best interest to take the loss now and balance out your capital gains for 2009. This will also free up some cash that you can put back to work in sectors continuing to grow in the coming months. Let's take a look at where we believe the big gains will be in 2010.

Materials: Steel stocks have just recently begun to develop some support levels and are showing signs of increasing demand. Capital projects in the EPC sector are showing signs of increasing, with investors and fund managers feeling more comfortable with inflation fears. Keep an eye on United States Steel Corporation (X) and AK Steel (AKS) who have no current debt or supply issues and have already turned the corner by swinging into profit.

Tech: It goes without saying that the tech sector has been on a role and is showing no signs of slowing down. Some great plays with soon to be high paying dividends are Amazon (AMZN) and of course Apple (APPL). We also like the semiconductors and microchip companies, especially Advance Micro Devices, Inc (AMD). They should capitalize on some market share given up by Intel, and continue to see significant revenue growth in 2010.

Biotech: We have closely followed the biotech industry throughout 2009, and firmly believe this continues to be, and will remain, the fastest growing industry. The potential for drug and novelty health care related companies is unmatched and has the potential to yield significant gains. I prime example of one such company is Human Genome Sciences (HGSI) which BHMP has rated a buy since a $2 share price. We still firmly believe this is an aggressive buy with a target of $65. We also continue to follow Bioelectronics (BIEL), which despite its recent drop , remains a strong buy for us. It is no doubt a high risk stock, but we feel the reward could be tremendous in value. Glaxo Smith Kline (GSK) is a must buy stock with the potential to buy out Human Genome Sciences and acquire a company with substantial revenues to come.

We hope you continue to follow us through 2010, and please feel free to email us any questions or comments you may have. You can reach us at:

bhmpllc09@gmail.com

Happy holidays!