Investing in Penny Shares

[alainn]

Is there an actual science to picking the right penny stocks or is it gambling?

I personally don't think the stock market is the best vehicle to making your fortune(unless you start a hedge fund or something like that).. but thats just me.

ive always thought that penny stocks were interesting though.

 

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[alainn]

(I'd rather just skip the first two and start my own fund, but hey, what can' ya' do.)

theres this book i found about starting a hedge fund it may interest you. I think starting your own hedge fund is VERY fastlane. its even included in the book. :

Amazon.com: Do-It-Yourself Hedge Funds: Everything You Need to Make Millions Right Now (9780446503891): Wayne Weddington: Books
(no affiliate link)

there are lots of others too if you just go to amazon and look up something like: start a hedge fund

 

[DeletedUser394]

I bought that book a few days ago

My personal favourite is "More Money Than God: Hedge Funds and the Making of a New Elite". It's an awesome read (500 pages).

 

[Bozigian]

Lets not forget about Sykes

An American Hedge Fund: How I made 2 millions as a stock operator & Created a Hedge Fund

 

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[alainn]

all this talk about penny stocks... i thought it would be relevant to quote the famous Rockefeller...:

"Play with pennies, you make pennies. Play with dollars, you make dollars."

I guess you could still play with dollars when it comes to penny stocks

 

[DeletedUser394]

Lets not forget about Sykes

An American Hedge Fund: How I made 2 millions as a stock operator & Created a Hedge Fund

Bought it a while ago.

 

[Bozigian]

Ryan, how long do you spend your days reading?

I never was a bookwarm reader but ever since I read MJ's book I became a book geek and spend half my day reading books while others play Call of Duty.

I probably read about 18 hours a week on books about finance

 

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[DeletedUser394]

Don't know, but for every hour I spend reading, I spend ten hours advancing towards my goals.

I used to read finance/business books during class, but now that I've graduated I read whenever convenient.

 

[AllenMass]

Penny stocks can increase ones trading profits in spades with a lot less risk. One need to be able to do a quick scan of the thousands of penny stocks that there is in the market and knows which ones have the highest percentage of going up.I too am just starting out in penny stocks.

 

[lightning]

all this talk about penny stocks... i thought it would be relevant to quote the famous Rockefeller...:

"Play with pennies, you make pennies. Play with dollars, you make dollars."

I guess you could still play with dollars when it comes to penny stocks

Ugh....Rockefeller was NOT talking about investing in penny stocks vs. regular (ie; higher exchange) stocks with this quote.

You can make ALOT more than pennies when investing on the pink sheets. Yes they are more volatile and YES they require twice as much of your attention than others (I dont have to call Apple's transfer agent or scrutinize every single filing they put out as I do with ANY stock I purchase on the pinksheets), however with greater risks come greater rewards. I have been investing in the stock market for years now and some of my greatest returns (I'm talking EXPLOSIVE returns) were because I did my research and wasnt afraid to purchase pennies. In fact from July-September I had one of my greatest returns ever, when a stock I was in ran from trip 000's (.000X) to just under .02 (I did not manage to get out at the very top but fortunately very close). Now, is that the norm? ABSOLUTELY NOT! Did I do my research and invest a ton of time on that pick? Absolutely YES. Did I get lucky to a degree to be on board for a run like that? To a degree yes, I am definitely fortunate as it is rare for a stock to work out to a grandslam such as that, those are absolutely legendary returns. However I am a firm believer in that "luck" happens with preperation meets opportunity.

Now, obviously that is NOT the norm and you are much more likely to LOSE money on the pinksheets if you go into them with the wrong mindset. I have friends that hear a story like that from people CONSTANTLY (EVERYONE seems to know "someone" or has heard of "someone" who invested $10,000 into a penny stock and subsequently paid off their house with the profits!) and think that investing in pennies is like playing the lottery, so they swing for the fences hoping they picked the right stock (usually on a "tip" from someone else, which is the number one cause of me banging my head against the wall in frustration as I try to explain to them THAT DOSENT WORK!!!). In the stock market you can only trust yourself. If you cant answer questions about the stock you are in (where are they located? Have you verified where their offices and operations are? Are the phone numbers they have on file operating? Have you spoken to any upper management, even if just to email them and introduce yourself as a shareholder/or potential shareholder (a "feeler" email I usually say), what is their share structure, how up to date are their filings, how many shares do the INSIDERS hold, has anyone been selling lately, what are the companies revenues/profits this quarter, what is their current market-cap, does their share price look inflated right now in regards to that? Do they have a history of dilluting or reverse splitting their stock, ETC. ETC. ETC).

In the stock market, there is NO quicker way to go BROKE than to do that on the pinksheets...If you want to humble yourself quickly, start investing in the pinks thinking you are a "pro". The penny market hands out more asss-kickings every year than you could possibly imagine.

 

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[lightning]

Penny stocks can increase ones trading profits in spades with a lot less risk. One need to be able to do a quick scan of the thousands of penny stocks that there is in the market and knows which ones have the highest percentage of going up.I too am just starting out in penny stocks.

You mean alot "MORE" risk...not less.

Penny stocks are NOT for new investors, and theyre definitely not for people who arent willing to babysit their stocks. (if you are looking to stock a portfolio that you can leave alone and not touch for a month, let alone 6 months or 6 years, penny stocks are NOT for you!). Holding "most" penny stocks is the equivelant to having a Bengal Tiger for a pet. You can try and convince yourself they are "safe" all you want...but the truth is, you never know what might set them off. As Ive said, they are volatile..and with higher volatility comes the "POTENTIAL" (NOT promise!) of higher profits.

Buy em. Ride em. Then get the hell out! DONT try and tame them, and DONT get emotionally attached to em. They are what they are.

Good luck.