Penny Stock Secrets Revealed!

[Isabella Fox]

In the late 1970's my wife and I made a game of buying penny stocks in
mining companies and oil & gas companies. This was the rage at the
time, and we made money at it! After all, if you only pay a few cents
a share and get out at $2 or $3, you can make 1000% or more ...
sometimes in a matter of weeks, or even days! Read on for the rest of
the story.
The truth is that the smartest thing we did was to sell at the right
time. The game didn't last long before the truth surfaced. Most of the
active penny stocks that flew like an eagle plunged to zip when the
party was over. Many of these companies existed on paper only. In
other words, they never really mined minerals or pumped oil ... they
just owned a right to, in all the wrong places.
Do you think that as the years go by that people get smarter? Think
again. In 2001-2002 you could buy stocks that had sold in late 1999
for $50, $100 or more a share for pennies. How would you have done if
you had? In most cases, you would be left with zip, maybe a tax write-
off for your efforts.
In early 2009 stocks of big-name companies were on the bargain block,
or so it seemed. This is not a first for the big banks. They were
cheap in late 1990, and they came back. GM, on the other hand, was
selling as cheap as it did in the depression of the 1930's. Its
stock's value was questionable at best.
I have had an interest in cheap stocks since 1972. Between 1972 and
1976, I followed every stock that sold on a national U.S. exchange for
less than $15. I had a systematic format for doing this.
Cheap (or penny) stocks are fun to play with. But the truth is that
you rarely hit a home run if you follow the crowd. If you bet $1000 on
a penny stock, the good news is that all you can lose is $1000. The
bad news is that you are quite likely to lose that $1000.
You can lose 5 or 6 times in a row and still win ... if you can then
hit a big winner. But you won't find that winner if you just jump on
the cheap stock of the day as most dreamers do.
How much can you lose with penny stocks? The answer is 100%. What are
you likely to lose with penny stocks? The answer is the same, 100%.
My advice is that if you love the game like I do, play with cheap
stocks as a game. Don't even consider them as serious investments for
your retirement nest egg.

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