Low-priced/Penny stocks

Hello,

Just wondering if anyone in the community could recommend a book or newsletter that can help educate me in this area. I have investing experience but would appreciate any feedback on this topic.
Thanks!

I forget the author but he title is “Where are the customers’ Yachts?”

Thank you for your reply!

This reminds me of this story that happened in recent years:

There’s a single New Jersey deli doing $35,000 in sales valued at $100 million in the stock market (cnbc.com)

Interesting story. Thanks!

FWIW, I used to get emails abbout a penny stock and how it ws ready to zoom. I kept seeing emails.

I did my research and saw that it went from perhaps $75 a share to pennies. The spam messages were hoping people would invesso trest of the ‘pump and dump’ people could get out with some money.

True. So many schemes and scams out there.
One must be careful.
I’m also thinking that there must be some quality start-up companies out there worth investing in.
Thanks for your reply!

Way back, I saw many penny stocks where the offering was so generic that they could be doing anything they wanted; essentually, our business to be determined.

Recently I bought into a less than $2 stock and saw that my purchase caused their price to swing somewhat dramatically.

Always research the company. Here is one stock that is heading towards penny stock price. You might invest and make money, but if you look at the past history, it is somewhat doubtful.

Fidelity has a stock screener. You can specify an industry or other criteria. You can also specify a low of perhaps 10 cents a share and $1.00 as maximum and it will display LOTS!. I do see many have dropped lower in price, if that is any indication :slight_smile:

I think the difference between blackjack and penny stocks is that with casino games you know the odds you will make money or not.

There are quality start-ups; the difficulty is identifying the companies. This is what actively managed funds try to do. The actively managed funds employ smart people who interview company founders. analyze company financial reports etc. and then select those companies they expect to outperform the market. The results: actively managed funds overall underperform passive index funds. The minority of actively managed funds that outperform index funds do so for only short period of time. An individual investor gets the highest long term returns by choosing diversified low cost index funds.
The annual performance data can be seen by searching for SPIVA scorecards active versus passive and the SPIVA US persistence scorecard.

These are all really good points.
The thing that really shocks and concerns me is the idea that short sellers can really take a stock down. So I want to guard against that but with the way they operate I guess it’s hard to do that.

Thanks. This is quite informative and helpful.

Thanks. Very helpful.

So much useful info. Thanks!
I don’t mind risk but don’t want to be reckless.
I think at this point with the way short-sellers manipulate, I’d like to stay with stocks that are perhaps two dollars and above. The ones under two dollars seems so susceptible to manipulation. And some of these short sellers don’t seem to care that they drag down good companies. It seems very negative to me.

I used to subscribe to “The Cheap Investor”. They would have an analysis of 3-5 stocks per month. I made some money with these. They followed stocks that were under $5. They were independent of their recommendations. I assume they are still publishing. My issue with cheap stocks was that you have to follow them almost daily. They can double in a day and fall back the next.

Just looked up “The Cheap Investor” website. Doesn’t appear to be the same anymore.

That sounds like something I’d be interested in subscribing to. Thanks for your input!

Which makes them speculation/gambling just like gambling. That is not to say peoople should not buy them, but understand what they are.

Yeah, Penny stocks should not be listed under “Investments”. Gambling is the place for those. I recommend Black Jack. It is more fun than penny stock, and you will loose your money just as fast!

You have a clever way of putting that.

I have lost lots of money catching falling knives with low-priced speculative start-ups. I’ve learned my lesson. No more!

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You invest in penny stocks (pink sheet stocks)
instead of going to the track or a casino. If you haven’t done so, be sure to see the movie “the Wolf of Wall Street”, which describes the penny stock industry from the broker’s side.

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