Why be careful of Pennystocks

Discussion in 'Penny Stocks' started by Profit5500, Jun 28, 2014.

  1. Profit5500

    Profit5500 Senior Investor

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    I was looking at an article from money.cnn.com which talked about Tim Grittani making 1 million dollars with penny stocks. I read somewhere that Tim learned from penny stocks guru Tim Sykes. I noticed that Tim Grittani used $1500 of his life savings just to trade penny stocks. The article mentioned that penny stocks are risky because investors could lose his or her whole investment. Also, penny stocks are considered to be part of the pump-and-dump scheme. Unfortunately, I feel that the investors who are victims to those scams, loses his or her confidence in the system. I do not know if its possible to turn even $5 into millions over time with penny stocks. I don't think I would invest money into penny stocks not unless there is a positive reason that I should.
     
  2. turt

    turt Guest

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    I bet a lot of these people did a lot of questionable things to make millions off penny stocks. If you buy at the right time, you can make a lot of profit off of nothing. I still prefer regular stocks.
     
  3. JR Ewing

    JR Ewing Super Moderator Staff Member

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    There are always a few people here and there who dumped everything into one or 2 names early and saw one of them go to the moon. If they've had 2 of them do so, they no doubt had to buy many dogs to get hot penny stock #2.

    If someone is saying that they've done this multiple times, and implying or saying that they're always right and never have any that don't go to the moon, I'd be instantly suspicious.


    The vast majority of stocks selling for pennies are crap. The few that have something special going for them don't stay penny stocks for too long, and are usually only trading at such a price in the early days. If they were at $100 a share in the past and are now under $1, it's best days are probably far behind it.
     
  4. ap4aaron

    ap4aaron Member

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    Penny stocks go so fast. These things can go up up up or just fall to a single penny. It's really hard to find a good penny stock that will come up. The ones that are going up wont be penny stocks for long.
     
  5. Profit5500

    Profit5500 Senior Investor

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    I guess that seems like the dying trend with penny stocks. It is almost like a ticking time bomb it blows up at 0:00. I just do not know what seems to be the legit places to get penny stocks.
     
  6. BudFox

    BudFox Well-Known Member

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    The simple thing to grasp is that a penny stock is a penny stock for a reason. The company (such as it is !) probably has nothing behind it apart from a name and a bespoke business plan just like 99.9% of new start-ups so you're not investing in company assets so much as gambling on the directors/owners.
     
  7. brianm100

    brianm100 New Member

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  8. IrishLad

    IrishLad Member

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    Penny stocks have always seemed risky to me, the few I have invested in have always fizzled out and not earned me much money (if any at all!). However I have seem some people make a lot of money off a very small investment on these stocks. I guess it's all about luck and I didn't get lucky the few times I tried. I much prefer regular stocks.
     
  9. dianethare

    dianethare Senior Investor

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    From what i have read, it looks like most of the time its a game of luck, i 'd like to trade on something more solid and more grounded, not something that takes flight in the wee hours of the night...great advice there guys...thanks :)
     
  10. Profit5500

    Profit5500 Senior Investor

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    Not only it a game of luck but it is pretty risky. People might end up pulling the dump-and-pump method to steal your money. There are legit stocks to buy but you have to be careful with them.
     

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