This is interesting since i am currently planning on investing in a good penny stock when i find one. I mean there's a gamble in all stocks whatever you put in you have to be okay with loosing at the end of the day because there is No guarantees that you will make a profit back. But there's a chance you could win with any stock. Whether that chance be more or less likely depending on the individual stock its still a chance that a person has to be willing to take.
I am not confident in Pennystock; it seems like a risk taking investment. Most people can myself would rather people we know to take big risks at Pennystock and if it goes well with them then we will try. For now people like myself prefer to invest a little at a time. I have never made any money or profit with Pennystock so I am not interested in doing any business with them that requires me to invest more.
I would not invest in Pennystocks unless there is a reliable and safe place to do so. I am more likely wondering how some people become millions through Pennystocks. I am sure that investing in Pennystocks takes careful practice. I do not know who in there mind makes money with Pennystocks except for bigshot millionaires that know the secret.
I was sure I heard Tim Grittani's name before and the second you said Tim Sykes it all clicked. I used to follow Tim Sykes like a hawk a few years ago. I've read his biography and even watched a few of his videos. But that's not what this topic is about. Why to be careful on penny stocks? Penny stocks are the most transparent part of the stock market. All it takes is someone like Tim Sykes to say "stock A is going to go up today" and his followers will be on that stock like flies on a sticky trap. This will in turn make the stock go up. I'm not saying this is a bad thing. Just as long as you don't ride the waves to long or get in to late. Eventually the water will get stagnate and you will loose money. There are other factors that make a stock go up and down like press releases or partnerships. All in all, penny stocks are not bad or good. They are like every other stock and just as risky.
I strongly disagree that stocks trading for under $1 are just like any other stock and are no more risky. Statistically, that's just not anywhere near true. A stock trading in double or triple digits or more with very strong fundamentals and a history of strong fundamentals will be much less likely to be worthless than a stock trading for under $1 or even under $10. There's no way in hell you can tell me that Exxon has just as good a chance at being worthless as some microcap wildcatter stock with a sticker price of one penny with no earnings, minimal revenues and assets, 10 to 1 debt to equity, negative margins, no institutional interest, minimal trading volume OTC, nothing unusual going on off the balance sheet, etc. Nothing is guaranteed, but the degrees of risk can vary greatly from one company to another. It may be true that the potential to make money from the second company is greater in theory, but if the facts don't indicate such and the prospects don't look particularly promising, the second company is likely to stay put in the worthless category.
JR, I think that you hit on a key point to judging a company. I wouldn't call my self more than a novice with investment information, but being someone who actually runs a company, I would say that the core fundamentals are what drives success in a business. I don't know this for sure, but I'd be willing to bet that there are companies with sound fundamentals that are undervalued. Those are the potential long term money makers. I like the quote attributed to Warren Buffet, "I don't invest in anything I don't understand", to guide me to decisions. If it seems confusing, odd or too good to be true, it probably is.
There are certainly always going to be sound companies that are undervalued. Finding those companies and holding on to them for a while - at least until their price starts to catch up with their value - will make you money. It often takes a little time though. Another saying by another very rich guy goes something like "if it's TOO hard, you probably need to get out!". My own experiences tend to echo that. Some things that may be very difficult for me to accomplish or understand may not be so for you and vice versa.
I would agree with that rich guys saying. I too would get out if the stocks I invested in were not doing too good. I am certain that Amazon, Twitter, Microsoft, and Apple would be long running. It just seems that investing in stocks sounds like fishing when you catch a big fish then you are making progress.
I too would be weary of penny stocks. Not to the point of avoiding them all together, but knowing that like everything else they require skill and research. Just because the investment is small does not mean the effort and risk are any less.
Avoiding the pennystocks is the key thing to do if you don't want to risk losing money. Its like playing roulette if you don't get that specific number where the ball lands you lose. You have to be lucky to win with the pennystocks.
