Penny stocks.

[bloodshed]

Hey, I'm currently fairly young and am looking into ways to secure my financial future. One of the things that has caught my interest lately was penny stocks. It used to hear they were long term investments, but it seems people are day trading them now. The allure to me is that because of their low price, all being under $3, its a way I can get into the stock market with a low amount of money to kind of learn how it works, without losing, or requiring enormous amounts of money. Does anybody have any advice, recommendations or warnings? by the way I am currently a business major, so i have some idea of the workings.

 

[jevoner]

penny stocks are a sham. as a finance / public accounting major myself, the best place to put your money is in a business that is already producing good earnings.

if you don't have alot to invest you should learn about trading option contracts, which are probably just as risky as trading penny stocks but you can buy / write options on companies that have more predictable earnings

 

[jevoner]

penny stocks are a sham. as a finance / public accounting major myself, the best place to put your money is in a business that is already producing good earnings.

if you don't have alot to invest you should learn about trading option contracts, which are probably just as risky as trading penny stocks but you can buy / write options on companies that have more predictable earnings

 

[lepinlarry]

I'm not big on day trading b/c of the price of commisions. However their are a lot of people making good money doing it. Try it out find a low price broker for commisions. Search best stock brokers and compare. If you see anything thats worth buying inform me bro.

 

[desoxymethylt]

I wouldn't suggest pennies and pinks for a newbie.... not at all. There is alot of good money to be made there but you have to understand the market changes when you go under a buck. You're no longer investing in companies that do good, hell, most don't even DO anything. What you're doing is riding waves and attempting to get on before the wave occurs, and sell before the wave ends.

 

[MrStick]

Stocks that are below $3 are usually there for a reason. Seems like you are fairly young, look into mutual funds or Exchange Traded Funds where you can buy into any number of stocks or bonds.

 

[SteaknAle]

DONT GO NEAR THEM.

As someone who has traded stocks for 30 years, and who teaches stock-trading at a college - I repeat - DONT GO NEAR THEM.

They are attractive because their price is so very low...it makes you feel good to buy 1,000 shares of something with your spare change. But when you add in the commission you'll pay to trade, you still have to spend larger amounts than you think to make anything worthwhile.

But more importantly, penny stocks are constantly the tool of what is called "Pump-and-Dump." Some shark buys a bunch of them, and then starts a whisper campaign that this stock will take off real soon. In fact, he may be buy a shitload at .05, and then buy some more at .07 or .08, just so the 'last trade' makes it look like its rising. Young people like you with only a little money to spend decide, "hell, I'll get on this train!," so you start buying as the price increases to .10....at which point your original shark sells all his shares, and the price falls back to .05 or .04.

Last point: when buying stocks on an established exchange (NYNEX, AMEX, NYSE), buy and sell orders are matched by computer as soon as the order is placed. It is efficient and as fair as can be.

NOT SO with Penny Stocks. Most Penny Stocks are labelled as being "OTCBB" which stands for "Over The Counter - Bulletin Board." That means the orders are not handled electronically - they are literally written on scraps of paper and pinned up on a board. Buy and sell orders are matched manually by whoever walks by next, and they dont have to be matched based on the ordre they came in or on which are the best matches. These stocks can often be identified because they carry the suffix ".PK," which stands for "pink sheets," because thats the color of the paper they are printed on.

Again - DONT GO NEAR THEM. If you want to get into stocks, dont try to day trade and be a hot-shot. Put $100 or $200 into an Ameritrade or E*Trade or ScottTrade account every month, and buy real stocks, and leave them there to grow. If you want to avoid commissions and only have a small amoutn to invest (say, $20-$50/month), contact utility companies and ask for their Direct Investment/Dividend Reinvestment (DRIP) Program. No commissions, flat-rate contributions, fractional shares, and more stiock instead of cash as dividends. Its the best place for a new young investor to start.

 

[mugzy]

I actually made some good money on penny stocks this year. With ACTC I tripled my money. Stem cells stocks of any kind are good however you have to day trade them as news changes fast and the market reacts to news. Good luck.

 

[luggerhead]

I made alot on PVSP but they are so risky. Take your money and run if you get up 10%

 

[gisnb]

very risky.

 

[gisnb]

What is ACTC and PVSP?

 

[dsmooth]

Penny stocks are a shame,and very easy to minipulate the stocks pricing since they are not regulated. I tried and was somewhat successful but you have to be on top of it daily ie stock pricing, and news. I liked playing whats called hurricane stocks. You would buy low out of hurricane seasons companies that would benifits if a hurricane hit, and the stock would mutiply x 10 during hurricane season.

 

[TrenBrah]

As someone who works in the world of finance, save yourself money and stress and stick to mutual funds.

Penny stocks are for fools. You might here some people bragging about their gains, but I guarantee they have/are going to have fat losses which they won't be so eager to post online.

 

[dsmooth]

As someone who works in the world of finance, save yourself money and stress and stick to mutual funds.

Penny stocks are for fools. You might here some people bragging about their gains, but I guarantee they have/are going to have fat losses which they won't be so eager to post online.

Good advice that is why I got out. It took me a year, and a half to sell all of my stocks, and break even.I stick to the big boards now. More regulalted.

 

[2ez]

I have a file that is 350kb. It is a statement showing how in 2003 a friend bought a stock for .00002 and it shot to over $2.


So his couple of thousands dollars, turned into a unrealized gain of over $40mil.


I have a copy of his Etrade Statement but I am unable to attach it.

If anyone can do it for me....let me know and I can email it to you.


Why does this prove why Penny Stocks suck ? Good question...hehehe

Because the market makers do not have to accept Penny Trades, unlike the other bigger markets.

 

[Performance Based]

The Book...

Unconventional Success
By David Swensen

Buy it, read it, implement it

 

[bloodshed]

The Book...

Unconventional Success
By David Swensen

Buy it, read it, implement it

I'll be sure to check it out. Maybe i can find a .pdf file online of it!

 

[NYCjuice]

DONT GO NEAR THEM.

As someone who has traded stocks for 30 years, and who teaches stock-trading at a college - I repeat - DONT GO NEAR THEM.

They are attractive because their price is so very low...it makes you feel good to buy 1,000 shares of something with your spare change. But when you add in the commission you'll pay to trade, you still have to spend larger amounts than you think to make anything worthwhile.

But more importantly, penny stocks are constantly the tool of what is called "Pump-and-Dump." Some shark buys a bunch of them, and then starts a whisper campaign that this stock will take off real soon. In fact, he may be buy a shitload at .05, and then buy some more at .07 or .08, just so the 'last trade' makes it look like its rising. Young people like you with only a little money to spend decide, "hell, I'll get on this train!," so you start buying as the price increases to .10....at which point your original shark sells all his shares, and the price falls back to .05 or .04.

Last point: when buying stocks on an established exchange (NYNEX, AMEX, NYSE), buy and sell orders are matched by computer as soon as the order is placed. It is efficient and as fair as can be.

NOT SO with Penny Stocks. Most Penny Stocks are labelled as being "OTCBB" which stands for "Over The Counter - Bulletin Board." That means the orders are not handled electronically - they are literally written on scraps of paper and pinned up on a board. Buy and sell orders are matched manually by whoever walks by next, and they dont have to be matched based on the ordre they came in or on which are the best matches. These stocks can often be identified because they carry the suffix ".PK," which stands for "pink sheets," because thats the color of the paper they are printed on.

Again - DONT GO NEAR THEM. If you want to get into stocks, dont try to day trade and be a hot-shot. Put $100 or $200 into an Ameritrade or E*Trade or ScottTrade account every month, and buy real stocks, and leave them there to grow. If you want to avoid commissions and only have a small amoutn to invest (say, $20-$50/month), contact utility companies and ask for their Direct Investment/Dividend Reinvestment (DRIP) Program. No commissions, flat-rate contributions, fractional shares, and more stiock instead of cash as dividends. Its the best place for a new young investor to start.

was in the field for a lil couldn't agree more with you

STAY AWAY

 

[Jude2]

I wish I would have listen to people and not mess with them. I have lost several thousands of dollars on them. Thank God I am making money back with good companies.

 

[dslocs]

stay away, look into companies that are trying to grow, such as under armour (UA). Stock is fairly priced because of the recent split and in my opinion is well under priced