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Penny Stocks: The Worst Investment You Can Make
Due to the magnitude of the recent bear market, we’ve been able to buy a lot of fine companies for less than $10 a share. Many of them are already trading considerably higher.
Yet some readers want us to go all the way down to the cellar. “Why don’t you ever recommend penny stocks?” one subscriber asked. “After all, it’s easier for a 50 cent stock to go to $1 than for a $50 stock to go to $100.”
For starters, it’s not.
Over the years, dozens of studies have shown that lower priced stocks don’t do better than higher priced stocks. In…
20Apr2009 | Investment U | 0 comments | ContinuedPrepping for Penny Stock Investing
Researching Penny Stocks
The phrase “penny stock†tends to scare many investors away. But, those are the companies you read about that returned triple and even quadruple-digit returns.
Penny stocks are usually small and newly created companies. While still trying to get established, penny stocks are analogically infants and toddlers compared to large-cap adult companies. With great parental guidance from a superb managing team, penny stocks can hold a promising future.
But, as with all children, they occasionally run amok. Some fall into the financial hole and can’t get out. Others have great balance sheets but no growth strategy. So, how do you…
5Sep2008 | The Penny Sleuth | Comments Off | ContinuedThe Two Money Makers in the Market
The Story That Got You Interested in Stocks
On Nov. 19, 1984, you could have picked up shares of the emerging biotechnology firm Amgen, Inc. (AMGN: NASDAQ) for $3.63.
Those shares rose steadily for the next 20 years and were worth more than $85 as recent as 2005. Taking into account Amgen’s five splits over the past 23 years, you can knock that original 1984 price down to about nine cents a share.
It’s almost impossible to believe that a company that would cost you pennies could turn into a $100 billion pharmaceutical giant specializing in the treatment of rheumatoid arthritis, anemia and…
4Sep2008 | The Penny Sleuth | Comments Off | ContinuedInvesting in Penny Income Stocks
Penny Income Explained
Awhile back, I wrote a report about “Penny Retirement Stocks.†Basically, it detailed how you can collect income that will help you retire through dividend-paying penny stocks. Today, I’d like to dive back into that issue and give you a fresh look at income penny stocks.
First, let’s break down exactly what I’m talking about…
Penny stocks offer the largest potential of capital gains. I’ve said this before, but it’s so true: It’s much easier for a $50 million company to turn into a $100 million one, than it is for a $50 billion company to turn into a $100…
26Aug2008 | The Penny Sleuth | Comments Off | ContinuedBeware of Penny Stock Misconceptions
Prejudices of Penny Stocks
Don’t ever judge a book by its cover. Chances are…it’s a good book. Otherwise it would have never been published. The same goes for penny stocks…
There are several accusations about penny stocks that can make an investor hesitant and timid to invest because of a “risky no-gainer gamble†stereotype. These statements are exaggerated and erroneous…
Learning the truth about what you heard in the past…might be a wealthy opportunity for the future…
Here is the top three…
Misconception #1: Penny stocks are priced low because they are poor performing companies.
Penny stocks are usually small and newly created companies. While still…
12Aug2008 | The Penny Sleuth | Comments Off | ContinuedBeating Buffett with Today’s Penny Stocks
Investing in Small-Caps
In 1936, one smart six-year-old purchased a few six-packs of Coca Cola from his grandfather’s grocery story for a quarter per pack and resold each bottle for a nickel apiece. With that initial 20% profit he made of each six-pack, the world’s richest man got his start in business.
Today, that same man owns $12.2 billion worth of the Coca Cola Co. Obviously, I’m talking about Warren Buffet…
Everyone already knows all there is to know about him, or so they think…
Sure, we know that he went to Columbia to study under Benjamin Graham. And, that he’s one of the…
5Aug2008 | The Penny Sleuth | Comments Off | ContinuedBelow the Radar: A Guide to Penny Stock Pitfalls and Profits
Penny-stock traders are like the Rodney Dangerfields of the investment world – they get no respect from their bigger brethren.
If a penny-stock trader made a killing on a few penny-stock trades, there’s a good chance he or she orchestrated a “pump-and-dump” scam – where a holder of a big block of penny-stock shares orchestrates a big whisper campaign to pump up the price of his shares. Traders rush in, driving the price skyward, enabling the perpetrator to “dump” his shares at a big profit.
The big sales, combined with the end of the hype, usually cause the penny stock to nosedive, inflicting the greatest damage…
1Jul2008 | Money Morning | Comments Off | ContinuedBelow the Radar: A How-to Guide to Pink Sheet Profit
Most investors have heard the term “pink sheets†as a reference to stocks. But how many know what they are.
Pink sheets are companies that are traded over-the-counter and that aren’t part of any major stock exchange. But that doesn’t mean they are any less valuable than traditional stocks, exchange-traded funds (ETFs) or mutual funds.
In fact, expanding your portfolio with pink sheet companies can be extremely lucrative, but you have to make the right moves to rake in the big profits.
Let me explain…
Pink Sheet Basics
Pink sheets began as listings on an electronic database provided by Pink Sheets LLC, and…
30Jun2008 | Money Morning | Comments Off | ContinuedPenny Stock Investment Tips
Ten Tips for New Penny Stock Investors
Many people who have never played the stock market game before start with penny stocks. Heck, even if you’ve been around investing for decades, penny stocks are still your ticket to triple-, quadruple- or even quintuple-digit gains. You just can’t see those if you bet on the Dow.
The problem is penny stocks are a bit more difficult to research than their large blue chip cousins. To make this a bit simpler for first-time investors, here are the top ten things to keep in mind when looking for solid penny stock plays:
10. Think Outside the…
30Jun2008 | The Penny Sleuth | Comments Off | ContinuedInvesting in the Over the Counter Bulletin Board (OTCBB)
Most investors are weary about the Over the Counter Bulletin Board (OTCBB). That’s understandable, considering the amount of bankruptcies, shell companies, and de-listings that occur in over-the-counter markets. But there is a very large misconception that is widely shared among investors: that no over-the-counter company has to report current financial information. That is the case with the Pink Sheets, but not so with the OTCBB.
You see, before 1990 the over-the-counter securities market was a wild-west show. Not complete lawlessness, but close to it. So that year, the SEC started the Over The Counter Bulletin Board as part of the Penny…
6Jun2008 | The Penny Sleuth | Comments Off | Continued
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