Dow Jones 10829.12 -0.07 9:17 am PST, December 30, 2004  NASDAQ 2177.67 +0.67 For info, visit access.smallcapnetwork.com S & P 500 1214.72 +1.27 Change your subscription status here Russell 2000 653.05 -0.29 VOLUME 04: ISSUE 103  Feature: Of Hogmanay, Predictions and Reader Kudos. As we sneak up on Hogmanay, thought I would share a representative email and some thoughts for 2005. Particularly a couple or three picks we think will see some decent daylight in the coming months. First off, Michael writes:  "I must say your picks are among the most accurate across the industry. Your market insights are also very timely, and greatly appreciated. Honestly, I am currently paying money for services that are no where as accurate as yours.  My one wish for the new-year is for your team to start off with some real "penny stocks" pick. By penny stocks, I mean some gems that are at, or near 0.01 or less. I know these are probably very risky picks, but I have extreme confidence in your abilities to dig deep, and pull a few out of the pit holes. I look at your service as the ultimate research firm for the small investor. Without your service we would not even know that most of these companies exist; moreover to invest in them. Thanks for your outstanding service, and wishing you all the best for the coming year". This email was one of the many kind missives that readers took the time to write. While we are appreciative, we are by no means sitting around popping corks. There is much work to do in 2005 and we look forward to the challenge. Not so much... As far as 1-cent stocks are concerned, I sincerely doubt we'll find any that pass our requirements. We are always looking for companies that have prospects and the potential to warrant the varying degrees of investor risk characteristic of the smallcap market. By the time a stock is trading at 1 cent, the evil genie is likely out of the bottle. There are, frankly, just too many other good ideas out there to take a less than calculated risk for the sake of owning a slug of something that is likely doomed. The other request I have is for readers to please not send in names of stocks they own and that we don't follow for an individual opinion. While I am flattered to be asked, most we don't follow and therefore have no opinion. We don't ever want to give false hope, so we rarely offer or even have an opinion on these babies. That said, sometimes a reader will send in detailed information and thoughts regarding a stock or sector and that can be of use. We profiled a few companies last year on that basis. We aren't investment advisors. We're merely a publication that illuminates ideas, strategies and news through opinion and comment. 2005 Predictions I don't really have any. I made some last year for fun and while most came to pass in one form or another, they didn't advance the market (except perhaps the breakup of Ben and Jen) and I'm trying to get away from this calendar mentality we have become enamored with. Any one who merely buys stocks on January 1st and sells on December 31st will likely always lose money.  Put up or shut out. What I did realize over this year was that even though the markets were relatively flat, good stock picks work no matter how lackluster the backdrop. Do I think the market will be up next year? Yes. Do I care how much? Sure, but I'm more interested in finding great ideas that have lots of cash, minimal debt and killer apps and products that set rising potential in motion. If a company doesn't execute or the market moves against them, cash and low or no debt is always the best defense for shareholders.  And you should also no that no company we follow has any editorial influence over what we write. If any of them stumble, do anything untoward or there is negative news, you'll know. And you should know too that we pass on more companies than we follow, by a large margin. We are beholding only to our readership. The companies we do follow have to prove, both initially and on an ongoing basis, that they are worthy of our, and ultimately your, attention. Period. Here endeth that rant. For 2005 we will obviously attempt to bring you more great names for your consideration. Will they all work? Hopefully yes. But this is the smallcap market. Anyone who has ever taken so much as a small punt in that arena knows the risks. Or should. We play the percentages in that we plan for more to work than not by varying degrees. So far, so good as our last piece detailed. We are entering our fourth full year of publication. I'm excited. While most of the names we are currently following were detailed in our last article, some new names give us equal excitement.   Keep an eye on these three... Payment Data Systems (OTCBB: PYDS). We brought this payment solutions company to you November 12th at 27 cents. Out of the gate, the company has inked decent contracts, has excellent revenue potential and has scooted up to 34 cents. Our technical threshold for breakout was 33 cents, so a bit more work here as well as new contract announcements in 2005 bodes well for this one. The sector seems buoyant and we feel that PYDS will participate nicely over the next 6-12 months. Giant Motorsports (OTCBB: GMOS). On December 17th, we brought this cool power sports company to the readership at $1.62. Now $1.80, the growth story here is that the company has given guidance that it plans to do $100 million in revenue for 2005. With a current market cap of under $20 million, the potential for GMOS evidenced by demographic trends, its acquisitive business plan and depth of management makes this a compelling story for those who both love motorcycles as well as look for those classic growth stories.  Informatica (NASDAQ: INFA). November 10th saw the shares of this data integration firm at $7.48. Now $8, the shares haven't rocketed, but with $234 million in cash, no debt and a projected 5-yr annual growth rate of 15 percent plus, the company is extremely well positioned to prosper. Data is the currency of all things tech and its manipulation represents, IMHO, the single most important facet of developing a business plan that maximizes sales and lowers costs. INFA is right in the thick of it. I've taken up enough of your time. Thanks for your attention and support. We appreciate it and will continue to earn it with every issue of the SmallCap Digest. Oh yes, and you really need to keep in frequent touch with the SCBLOG. Wouldn't want to miss anything, would you?   We Value Your Feedback Got comments, questions or suggestions? Send 'em on over: Editor@smallcapnetwork.com If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 3525 Del Mar Heights Rd #334 San Diego, CA 92130   Unsubscribe Here D I S C L A I M E R: The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. SmallCap Digest is not a licensed investment professional or broker-dealer. 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