Thinking of opening an account just to play with some penny stocks. Mind you this is more pleasure than business, is this a waste of time or can i make a little scratch by dabling. If I lose no biggie, just thought it would be fun trying to find that one skyrockets:shrug:
Question
- Thread starter UGA12
- Start date
UGA12 I started investing in penny stocks and have for many years; with mixed results. You can make some money off the small caps, specs.
1. Greed I found after being lucky (BRE-X, Diamond Fields era in Canada) it was easy to get carried away.
would look for cdn. mining stocks, not to double, but 100X, a double was boring. at this time should have been looking for the exit.
2. Know the investment.
UGA12 many of these penny stocks are just hype or promotions. for example let us say gold goes on a run, 20-25%, and people want to find the next hot gold play.
there are dozen of mining plays that have never found gold, over decades. they just dust them off and begin the promotion. nothing wrong with this just make sure when you are buying into a promtion or an actual company.
3. Flavour of the day
basically it is somtimes easier to make money off penny stocks in a hot sector. just look at Uranium the last 2 years. you have some large returns, of coarse I missed them all :shrug: but UEX .25 now over $5. of coarse sold over half at 3-3.25...lol.
when oil was below 10 who wanted a jr. oil company. I mean jr. oil companies would become internet mulitmedia, in 1998, and now they are resources plays.
4. keep it simple.
one time after a string of great plays I invested in Agate Bay Resources. just came across the paper work, 24 handwritten pages of calculations, on a large copper mine.
not even sure what half of them mean. invested at .75 cents went to .79-81 and then fell. should have sold at .55 but was a moron.
kept it until .25 then sold. went to zero. knew an old miner who used to post on the internet.
he shorted penny stocks, Agate was on the list at .70-.75. he simply stated "small company trying to develop what a large company could not." He was correct as ussuall.
5. Know your business
does not hurt to specialize a little. maybe oil, mining, drug, biotech.
in the example above the short seller who are correct on agate bay, decided to short internet stocks in 1999.
most or all of the companies he shorted were pure garbage never made a penny and were destined to go broke, still he went from making 85% (avg. 3-4 years) in mining stocks to losing -180 on the shorts.
6. do not average your losses.
do not fall in love with a play and when a small speculation shows a loss. just heard about someone who have invested over 45,000 over a losing mining stock. He now has 12,000 and still believes it is a great play.
does not make a profit, issuing more stock, and does not have a profitable mine. other than that the company is great. never dollar cost on a money losing position. he is going to sink more money in this hole, will have over 50,000 in a money losing stock that he still loves.
thanks
selkirk
1. Greed I found after being lucky (BRE-X, Diamond Fields era in Canada) it was easy to get carried away.
would look for cdn. mining stocks, not to double, but 100X, a double was boring. at this time should have been looking for the exit.
2. Know the investment.
UGA12 many of these penny stocks are just hype or promotions. for example let us say gold goes on a run, 20-25%, and people want to find the next hot gold play.
there are dozen of mining plays that have never found gold, over decades. they just dust them off and begin the promotion. nothing wrong with this just make sure when you are buying into a promtion or an actual company.
3. Flavour of the day
basically it is somtimes easier to make money off penny stocks in a hot sector. just look at Uranium the last 2 years. you have some large returns, of coarse I missed them all :shrug: but UEX .25 now over $5. of coarse sold over half at 3-3.25...lol.
when oil was below 10 who wanted a jr. oil company. I mean jr. oil companies would become internet mulitmedia, in 1998, and now they are resources plays.
4. keep it simple.
one time after a string of great plays I invested in Agate Bay Resources. just came across the paper work, 24 handwritten pages of calculations, on a large copper mine.
not even sure what half of them mean. invested at .75 cents went to .79-81 and then fell. should have sold at .55 but was a moron.
kept it until .25 then sold. went to zero. knew an old miner who used to post on the internet.
he shorted penny stocks, Agate was on the list at .70-.75. he simply stated "small company trying to develop what a large company could not." He was correct as ussuall.
5. Know your business
does not hurt to specialize a little. maybe oil, mining, drug, biotech.
in the example above the short seller who are correct on agate bay, decided to short internet stocks in 1999.
most or all of the companies he shorted were pure garbage never made a penny and were destined to go broke, still he went from making 85% (avg. 3-4 years) in mining stocks to losing -180 on the shorts.
6. do not average your losses.
do not fall in love with a play and when a small speculation shows a loss. just heard about someone who have invested over 45,000 over a losing mining stock. He now has 12,000 and still believes it is a great play.
does not make a profit, issuing more stock, and does not have a profitable mine. other than that the company is great. never dollar cost on a money losing position. he is going to sink more money in this hole, will have over 50,000 in a money losing stock that he still loves.
thanks
selkirk
Thanks selkirk, great information as usual! What site would you recommend for trading pennies keeping in mind I am not going to deposit 1k or anything just do a little research and buy 50-100 dollars worth from time to time. Also do you use any services and if so which ones are the best and price per month. Again thanks for all the help!!!!
a question--is there anyway get around bid/ask prices on penny stocks.
Have one in particular that has flucuated between mid 30 cent and 40 cent range last couple of years. The bid/ask diff on this stock is generally around 10% value of stock which cuts deep into any profit taking--if not for that factor one could do well on buying in mid 30's and selling around 40.
Have one in particular that has flucuated between mid 30 cent and 40 cent range last couple of years. The bid/ask diff on this stock is generally around 10% value of stock which cuts deep into any profit taking--if not for that factor one could do well on buying in mid 30's and selling around 40.
- Feb 12, 2000
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UGA -- make sure you go with a broker that is "penny-friendly". Many brokers (live or online) have very high transaction fees for pennies.
DTB -- Interactive Brokers (my online broker) has been hyping some new revolutionary advances on penny stock pricing. I don't tinker there too often, so I don't know if this will clear up everything that you are referring to. But I do think it is in line with your question.
DTB -- Interactive Brokers (my online broker) has been hyping some new revolutionary advances on penny stock pricing. I don't tinker there too often, so I don't know if this will clear up everything that you are referring to. But I do think it is in line with your question.
UGA12 would agree with dawgball about fees, basically you want to find a discount that has low fees and suits you.
some require min amounts, though this number is ussually not high. would also build up a standard account, one that takes average risks, with stocks (companies) that have earnings and dividends.
would build up this account and continue before starting on a penny stock portfolio. also over time would build up the amount to invest per stock.
you will find that with 150 dollar amounts brokerage fees (even low ones) can quickly eat into returns. maybe even do paper trades or invest like you are with small amount just to see how you fare.
be prepared to lose, there is nothing like picking a stock that moves, picked one that did nothing for 4 months, was mentioned at a conference by a analyst and then printed in a paper, ....hello 90% return in one day.
however more often found you have stocks that just slowly drift lower until you get rid of them.
also have interactive brokers account (mainly for options) and so far like the service. however will probably find something wrong eventually....lol.
good luck UGA12, and in 2007 will probably post some higher risks stocks; would be happy to get one wiinner out of four.
DTB some stocks just have high spread between bid and ask, there is a stock that trades avg. volume and the spread is always....95%....
have one the bid and ask is 15 cents difference.
thanks
selkirk
some require min amounts, though this number is ussually not high. would also build up a standard account, one that takes average risks, with stocks (companies) that have earnings and dividends.
would build up this account and continue before starting on a penny stock portfolio. also over time would build up the amount to invest per stock.
you will find that with 150 dollar amounts brokerage fees (even low ones) can quickly eat into returns. maybe even do paper trades or invest like you are with small amount just to see how you fare.
be prepared to lose, there is nothing like picking a stock that moves, picked one that did nothing for 4 months, was mentioned at a conference by a analyst and then printed in a paper, ....hello 90% return in one day.
however more often found you have stocks that just slowly drift lower until you get rid of them.
also have interactive brokers account (mainly for options) and so far like the service. however will probably find something wrong eventually....lol.
good luck UGA12, and in 2007 will probably post some higher risks stocks; would be happy to get one wiinner out of four.
DTB some stocks just have high spread between bid and ask, there is a stock that trades avg. volume and the spread is always....95%....
have one the bid and ask is 15 cents difference.
thanks
selkirk
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