Pennystocks - Advice for Layman

[asphaltgambler]

I have a thimble full understanding of the stock market. I once heard an experienced trader say to never be involved with "ghetto stocks" - IE: penny stocks..........................that you will lose you @ss quick - that they are too risky.

I have been intrigued lately by 'penny' stocks. I know Howard (Sirius) has constant commercials about this. Which makes me even more wary.

I do understand that traditionally they are volitile. Maybe my greed is clouding some judgement here...........but small moves in the right direction = big %.
Afterall % change in the right direction is what it's all about? (with good advice)

Anyone here dable in these or have recent experience? As always thanks

[sailchef]

I would start by watching CNBC everyday for 3-4 hours a day for an entire year. It doesn't matter if you invest in penny stocks or Blue Chip, you need to educate yourself before you do anything.

+1 on Shadetree930's comment

[onlycafe]

might as well go to a casino.

[HardDrive]

At least at the casino they'll bring you drinks as you go broke.

[m21sniper]

My uncle just lost EVERYTHING day trading over the last year.(it doesnt help that he's stupid)

Be very careful.

[jyl]

Penny stocks are, pretty much by definition, almost all companies that are losers.

Investing in loser companies is a low-odds way to make money.

Trading in loser companies may work for some, but you'd better have a truckful of knowledge, not a thimbleful.

[John-1977911s]

There are no controls on penny stocks. The people running the so called companies will always put more and more shares into the market and then release BS press releases to suck people in. They will make money and the stock barely moves. Not to mention the short sell taxes if you do make a profit, because if you don't short sell you are guarantied to lose your cash because the stock will dip in a day or two.

Most of these companies are always registered in NV.

Do not put your money into penny stocks. You will chase it and lose it all.

[McLovin]

Originally Posted by sailchef

I would start by watching CNBC everyday for 3-4 hours a day for an entire year. It doesn't matter if you invest in penny stocks or Blue Chip, you need to educate yourself before you do anything.

I disagree with that. Trading in penny stocks has nothing to do with any kind of "normal" investing, or any kind of investing that has any relationship to what is talked about on places like CNBC. In fact, if you try to use that kind of normal stock trading information, it will only hurt you on penny stocks.

[asphaltgambler]

Thanks all - I guess the Trader guy that I heard speaking awhile back was dead-on with this subject - he used a good analogy = Why buy a fixer-upper in the ghetto when you can do so much better with a fixer-upper in a million dollar neighborhood ?

[widebody911]

Three words for you - pump and dump.

[tabs]

One word.....DON"T

First thing and really the only thing to know....ONE NEVER KNOWS THE TRUE PRICE OF A PINK SHEET STOCK...

If you want to make some money start going to Thrift Stores and sell the BS stuff you find on E-bay...you can make $500 a month tax free..

[asphaltgambler]

Tabs.....It's funny you say that about 'pink' sheets - My Wife works for a high-profile surgical group near the DC area. One of the doctors she works with was boasting about buying a ton of GM pink after they had declared BR and the stock was de-listed.

He lost his collective @ss..........................