Why Penny Stocks?
9:53 AM Posted by MH
People asking why I mostly play penny stocks. Here is why.Penny stocks are shares that trade from a fraction of a penny to $5.
The upside of penny stocks is the ability to turn a small investment into a fortune.
The downside is the risk, volatility of the shares, and the lack of corporate transparency.
For example, if we traded one of your garden variety fortune 500 stocks, how much return potential can you expect to see? Not a whole lot. These are the kind of stocks that people like to make a steady 10-15% return on a yearly basis. This is nothing to sneeze at. But I wouldn't expect to get rich from it.
Lets say you had $4,000 and you invest in a $40 a stock this means you have 100 shares. With that 10% increase that would mean that the stock price at the end of the year is $44. Not bad, but not exactly earth-shattering.
With this same example, lets say you invested that $4000 in a penny stock that was worth 50 cents a share. You'll end up 8000 shares.
Now with penny stocks, the growth potential is really infinite because it really doesn't take that much to move the price. Some have gone up as much as 500% in a single day. Let's just say from the previous example that the penny stock went up 400%(AGEN), that would mean the price when from 60 cents to 3 dollasr a share. You can really start to see how such small movements can provide big profits.
Source
The upside of penny stocks is the ability to turn a small investment into a fortune.
The downside is the risk, volatility of the shares, and the lack of corporate transparency.
For example, if we traded one of your garden variety fortune 500 stocks, how much return potential can you expect to see? Not a whole lot. These are the kind of stocks that people like to make a steady 10-15% return on a yearly basis. This is nothing to sneeze at. But I wouldn't expect to get rich from it.
Lets say you had $4,000 and you invest in a $40 a stock this means you have 100 shares. With that 10% increase that would mean that the stock price at the end of the year is $44. Not bad, but not exactly earth-shattering.
With this same example, lets say you invested that $4000 in a penny stock that was worth 50 cents a share. You'll end up 8000 shares.
Now with penny stocks, the growth potential is really infinite because it really doesn't take that much to move the price. Some have gone up as much as 500% in a single day. Let's just say from the previous example that the penny stock went up 400%(AGEN), that would mean the price when from 60 cents to 3 dollasr a share. You can really start to see how such small movements can provide big profits.
Source
http://ezinearticles.com/?expert=Chris_Braff
June 4, 2009 at 11:05 AM
좋은 글 감사합니다. 저도 페니로 시작을 해서 페니의 매력에서 헤어나오지 못하고 있어요. ^^ 앞으로 공부를 더 많이해서 방장님같은 안목과 투자스타일을 갖추는게 제 다부진 목표에요.
오늘 마켓 좋을 것 같아요. 다들 성투하시길.
June 4, 2009 at 1:49 PM
오늘 마켓 너무 좋네요.. 포폴을 정리할때인것 같습니다.. 수고가 많으신 헌터 방장님. 언제나 고맙군요.
June 4, 2009 at 1:50 PM
오셈님 돈 많이 버셨나 봐요 ㅎㅎ 축하드립니다.
June 4, 2009 at 3:21 PM
헌터님.. 아네요.. 다행이 정리할 수 있어서 좋은거죠. 그동안 SRI 들고 있었거든요...빨리 정리하려구요
June 4, 2009 at 4:18 PM
it is great site.
June 4, 2009 at 4:20 PM
ty noyu and good luck !!
June 4, 2009 at 4:23 PM
오늘도 수고하셨습니다. 매일 배우는게 많네요. 헌터님덕을 톡톡히 보고 있습니다. 아래글은 구글 포스트에서 퍼왔습니다. CTIC 관한 포스트를 누가 올린건데 CTIC을 떠나서 CONCEPT이 재밌네요. 다른분들에게 도움이 되었으면 합니다. 원피스
I find it kind of disturbing that certain people would buy a stock
based on one essentially anonymous person's advice (Nour) and get
demoralized when he doesn't offer constant reassurances. He offers
solid interpretations of the information that's out there. There is no
"news" that he has presented that you can't find yourselves. I'm
invested in CTIC long because I have done my own research and weighed
various data to conclude that CTIC is a solid investment. As for the
spike followed by a 20 percent drop, this is nothing new, if you have
been paying attention to CTIC in recent months. It's psychology 101
when it comes to stock investing. Many people heard onto a stock on
some positive "news," then dump it when they think the ride is over.
Rinse and repeat. That accounts for a spike, followed by a drop,
followed by a new solid foundation from which new growth comes. Unless
you want to have a heart attack, I would recommend not obsessing about
the daily fluctuations and measure growth in weeks and months. This
week, for instance, even if it drops some more, will be a positive
week for CTIC. Step back and take a broad look at this stock. The
company is returning from the dead and is poised for a positive
future. Read up and confirm this, then you can relax about whether you
have made a good investment. I'm personally up five fold on this stock
so far, and don't really get nervous about the pullbacks. I have long
since taken out what I put into this stock, having taken some profits
because I'm a conservative investor and am reinvesting in a couple
other promising stocks. I still have retained most of my CTIC shares
because I have a very long time horizon. I will not pay a huge capital
gain as many short term investors will. That wouldn't be wise.
June 4, 2009 at 4:34 PM
원피스님 올리신 글 읽으니까 CTIC 이제라도 들어가고 싶네요. ㅎㅎ
헌터님, 도네이션 할려구 2번이나 다른 카드 써서 시도했는데, 계속 invalid 라고 나오네요. 좀 있다가 다시 시도해 볼께요. 저 빈말로 한거 아니예요. ㅠㅠ
June 4, 2009 at 4:52 PM
3번째 실패.. 흑흑.. 근데 혹시 도네이션 3번 이미 된거 아닌가 하는 의문이.. 헌터님, 한번 확인 해 주실래요?
June 4, 2009 at 6:29 PM
ㅎㅎ 아직 못 받았습니다.
원피스님 글 감사합니다. ^^
June 4, 2009 at 9:30 PM
안녕하세요, 방장님. 요즘 챗팅방에는 잘 못가지만 매일 올려주시는 정보들 잘 보고 있습니다. 방장님의 트레이딩 방법은 저한테는 쉽지는 않지만 정말 좋은거같애요.
블로그가 점점 활기차고 분위기가 좋아지고 있는 거 같애요.^^ 고맙습니다.
--soori
June 4, 2009 at 9:36 PM
안녕하세요 수리님.. 근데 제 트레이드 방식이 어떻돼요 ?
어떤점이 힘드신지 말씀해 주세요 ^^
참고하겠습니다.
June 4, 2009 at 9:50 PM
방장님, 저한테 힘든건요. 바로 인내심이요. 방장님처럼 여유있게 기다릴수 있는 마음이요. 방장님 블로그 알고 부터 인내심이 얼마나 중요한지 알게되서 저두 조금 희망을 가지고 있는 중이예요. 돈벌든 못벌든 방장님 기다리시는 데로만 저두 해볼려구요.^^ 이번주 지나면 제 개인적인 일들이 좀 끝나가서 담주 부터 열심히 또 따라쟁이 시작할려구요. :)
--soori
June 4, 2009 at 10:10 PM
저도 열씸 해볼려구 하는데 평일에 이틀밖에 시간이 안돼서 안타깝네요..
그래도 열씨미..
MARBLE
June 5, 2009 at 1:07 AM
오늘도 블러그에 들어와서 느낀 거지만 정말 유용하고
아름다운 블러그 같아요 방장님이 금같은 시간을 투자해서 여러분들 한태 좋은 정보를 주는것 같읍니다.
아직 방장님과 회원님들 과 같은 주식을 공유하진 않지만 틈틈히 채팅창을 보면서 마음의 편안함을 느낌니다. 감사 드립니다.
SAMMAN