There is no better topic for an April Fool's Day article than "penny stocks."
April 1, 2006 Summary: Allan taught me much about penny stock investing over the many years I knew him before his early death in 2003. I've felt his advice was so helpful that I wanted to immortalize his words in an article. This post in our "GeoGlobal Resources (GGR)" discussion forum is where Allan last published his "Penny Stock Mentality" advice. Allan had the pleasure of reviewing and approving this article during the final days of his life. I am reposting it here on our new site to keep my friend's words close.
Kirk Lindstrom
Kirk, in hind sight, every price that excited me where I held out for more was a wasted selling opportunity. If you are excited, it's toppy!
Penny stock Mentality
So what type of investor trawls penny stocks?
He's willing to buy a 9¢ stock that's 9¢ because nobody else wants it.
He's willing to wake up in the morning and find his 9¢ stock now 4¢, or his 50¢ stock now 28¢ and still enjoy his breakfast profusely, because he knows he's picked a winner.
He's willing to average down from 50¢ to 9¢ and will buy heavily at 9¢ so the great majority of his stock is purchased at the cheaper level. Hey, he believes in the stock. Of course, the stock slips from 9¢ to 6¢ but that is of little consequence--he knows he's gotten in near the bottom and nobody hits the exact bottom anyway.
He loves his penny stock, but when he has a double, he sells half no matter what. And he's invariably happy in the end by his tactic.
He finds while doing his DD (due diligence) that one of his tech stocks he just bought a load of is spending more money on plane fares seeking capital from Europe, than it is developing its product, so he dumps it all immediately even though it just dropped 25%. And he figures he's ahead of the ballgame. The stock has a 5 for one reverse split and he celebrates the fact that he sold his remaining little stake at a 75% loss instead of the 95% loss that would happen just a week later.
He gets bored with his penny stocks and ignores them for a few weeks and looks at his statement one day and finds a 70¢ stock of his that had lost half its value over a period of 3 years now is over $4 a share and his hand is shaking as he calls his broker to sell. The same stock is $12 a share a few months later. Then $1 a share a couple of years later.
He buys a 2¢ stock because he knows that the shell alone of any penny stock is worth 2¢ a share for companies trying to avoid the hassle of starting a corporation from scratch. His 2¢ stock goes into a 100 to 1 reverse split.
Surprisingly, his portfolio rises slowly over time and penny stocks are still better that no stocks at all.
Hey people--I am not a sexist here. I use the pronoun "he" only, because I'm speaking for myself here and anyway, I just know that the girls are too smart to invest like me.
A stock which sells for less than one dollar per share (or in some cases, less than five dollars per share). Most penny stocks have only a few million dollars in net tangible assets and have a short operating history. Penny stocks are almost always small cap stocks, but the reverse isn't necessarily true
Penny Stocks are cheap for a good reason. Most financial advisors advise against buying penny stocks because most people lose money, the commissions are huge and they are subject to price manipulation due to the small float. Thus, I tell people to consider buying penny stocks as gambling. NEVER buy more than you can afford to lose and consider the purchase as a trip to Las Vegas where you have a budget on what you can afford to lose at the gaming tables, including air fair and lodging.
Discussion Forums
These discussion forums are great for sharing ideas with others:
Through 3/31/06 the Total Return for "Kirk's Newsletter Explore Portfolio" since 12/31/98 is Up 218% while the S&P500 only up 17%!!! & NASDAQ only up 7%!!!
My newsletter offers quite a bit of useful information including two recommended core portfolios composed of index funds or ETFs, tables, discussion of interest rates, The Fed Model, etc. that many say are worth the price of the subscription before accounting for the fantastic returns in my explore portfolio. .
DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice.
The copyright of the article Penny Stocks in Investment is owned by Kirk Lindstrom. Permission to republish Penny Stocks in print or online must be granted by the author in writing.
Comments
Mar 31, 2006 8:00 AM
france :
<A href=http://home.netcom.com/~kirklindstrom/Newsletter/WhatLetter2Buy.html><img width=550 height=3 src=http://home.netcom.com/~kirklindstrom/Images/rainbow800x10.gif ></A> . GPHYF -- Geophysical Prospecting, Inc. Com (No Par)
GEOPHYSICAL PROSPECTING INC. CORPORATE UPDATE
Toronto, Ontario. March 30, 2006 - Geophysical Prospecting Inc. ("the Company") is pleased to announce that the Company has completed the acquisition, announced January 3,2006, of the four claim mining license in Corbierre Township, Wawa, Ontario. The claims cover approximately 1,000 acres or four square kilometers. The license was purchased from Mr. John Archibald the Company's President for stock and a production royalty.
The license is a sub-license from Cedar Falls Inc., the Canadian entity, holding the mineral and surface rights assets to the former Algoma Railway lands. These claims cover the entire infrastructure of the former past producing Josephine Iron Mine developed by Cominco and operated by the Algoma Ore Division of Sault Ste. Marie. These claims are structurally located 4 kilometers northeast of Dianor's major diamond discovery in Chabanel Twp. in the Wawa area and occupy similar geological structure and volcanic sequences observed covering the Dianor ground. This is the first acquisition by GPI in its quest for significant land packages in Canada under its working mandate of utilizing geophysical prospecting methods for acquiring new ground.
The Company is in negotiation to acquire additional property leases in the Wawa vicinity and formulating an exploration work program for the Corbierre leases. Additional information on these and other Company initiatives will be released in the near future.
In addition the Company has appointed Mr. Cliff A. Jones as Director and Vice President of Corporate Development. Mr. Jones has been an advisor to both small and large business operators, who require assistance in recapitalization and business restructuring, for over 15 years. He has been involved in the public markets and has a proven track record of raising equity capital, sourcing and executing mergers and acquisitions as well as public and investor relations.
This news release contains certain "forward-looking statements," such as statements that describe the plans, objectives, and goals of the management of Geophysical Prospecting Inc. Forward-looking statements are necessarily subject to a variety of risks, uncertainties, and other factors that cou
Apr 15, 2006 5:26 AM
Steve Thompson :
By NAUREEN S. MALIK
THE THOUGHT OF Pink Sheets stocks may raise a few red flags for many investors.
But these riskier securities traded over the counter have been attracting more attention by retail investors searching for offbeat opportunities.
Joseph Mecane, managing director of UBS Investment Bank's equities division, is a Pink Sheets maven.
UBS is one of the top three market makers in over-the-counter securities sold on the OTC Bulletin Board and Pink Sheets. Individual investors can access Pink Sheets through brokerage firms or online accounts such as E*Trade.
"The whole rise of self-directed individual investors" has created added interest in smaller-cap stocks such as those that trade in the Pink Sheets marketplace, says Mecane. To meet this demand, Mecane and his team have helped make Pink Sheets transactions more transparent and liquid from a wholesaler's perspective.
Last month, investors traded a total of 172.7 billion shares of Pink Sheets stocks, three times the volume traded in March 2005, according to Pink Sheets.
A number of reputed foreign-listed companies such as Nestle, Heineken and Arcelor have opted to trade on the Pink Sheets rather than take on the regulatory burdens and costs of listing with a U.S. exchange.
Companies plagued by financial scandals also tend to trade in heavy volumes over the counter even after delisting from a major exchange. HealthSouth shares dropped to mere pennies in 2003 but are now trading in the $5 range amid a turnaround. The company announced two weeks ago that it plans to reapply to list on a major U.S. exchange in coming months.
Pink Sheets LLC, which itself is a privately held company, will soon be launching a new tiered service where companies can receive a premium designation in exchange for filing timely financial information. This will help investors weed out venture-capital type opportunities from the more questionable penny stocks.
Mecane recently took some time to give us a primer on navigating the market to limit risk and reap reward.
Barron's Online: What has Pink Sheets market activity been like lately? Mecane: It's a very cyclical market, and there are a lot of very low-priced stocks that trade in this market. Most of the stocks that trade are actually priced less than a dollar, so you'll actually get a lot of share volume in the marketplace sometimes, and dollar volume is a little bit of a more accurate way to look at what the actual activity is.
I think w
Jan 29, 2007 11:59 PM
Maggie Smith :
Recently,I find two value stock,despite these two stock is in very low price.I think lots of cleareyed people will take more care on them. The one is WOIZ.OB,Woize International Ltd. provides digital communication services, including VoIP, based on proprietary software as well as support for the de facto SIP standard. The WoizeTM services, including incoming and outgoing calls and many more communication features, are available for free and can be downloaded at www.woize.com. The company's main competition is Skype and Vonage.
The other is CECU.PK This enterprise engage clean energy Clean Energy is a development-stage US public company based in Vancouver, BC, Canada, that is moving forward aggressively to acquire long-term contracted and indexed revenues with customers such as government, non-government and utility agencies that will provide stable revenues and incur minimal costs with respect to sales and collections. The company also seeks to achieve revenues from the commercialization of its proprietary technologies and development of renewable energy projects. for more information to browse this web: www.clean-energy.com
I think these are brim over with ability.
Feb 12, 2007 6:14 PM
Maggie Smith :
Welwind Energy International Corporation (OTC BB:WWEI.OB - News) (the ``Company'), a pioneer in alternative energy in the Asian market, announced at a Jan. 30th press conference that the first wind turbine produced by Guangzhou Engga Wind Energy Co. Ltd. (ENGGA) for WWEI rolled off of the production line for Phase I of the Zhanjiang wind farm project. The press conference was attended by Zhanjiang and Yangjiang government officials, WWEI management and directors and ENGGA. ADVERTISEMENT
The company is currently constructing the base for the turbine and will be installing the 750 KW ENGGA turbine after the Chinese spring festival next month. Windcor Power Systems, a Canadian wind developer, will oversee the installation of the first turbine.
Shannon de Delley, a delegate at the press conference and Director of WWEI, gave a speech to over 200 attendees on behalf of the company, which further established WWEI's role as a leading developer in China focused on advancing green environmentally friendly wind power.
The company also announces a cooperative agreement between Welwind and ENGGA to work together on the technology and future supply of all Welwind turbines. The agreement gives Welwind priority for all turbines to be manufactured by ENGGA. London Asia Investment Partners is the financing arm for ENGGA. London Asia is a leading Asian focused merchant banking group listed on the AIM market of the London Stock Exchange. London Asia is focused on providing capital and investment banking services to Asian SMEs, using Western investment criteria and standards of corporate governance. http://www.londonasia.com
The company also has agreed to establish a research center with the Nanjiang Institute of Technology.
About WWEI
The Company views wind power as becoming one of the most efficient power sources globally. WWEI was founded in 2005 to build, own and operate wind farms on an international scale. Their current project is to bridge the North America-China link by building wind farms in China beginning along the South China Sea.
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. These statements are subject to uncertainties and risks including, b
Feb 12, 2007 6:18 PM
Maggie Smith :
The Board of Clean Energy Combustion Systems Inc. ("Clean Energy") ("CECU") is pleased to announce terms of the final agreement with Lucky Power International Limited (a BVI company registered in Hong Kong) for an exclusive license of technology patented in the People's Republic of China for the recovery, purification and compression of raw landfill gas into high quality Compressed Natural Gas (CNG). The raw gas is collected from the decomposition of municipal waste in the landfills associated with large Chinese cities. The quality of the output fuel is outstanding for powering all sizes of diesel engines. The Company anticipates achieving net cash flow next year growing substantially over the next five years. The technology is operating at a pilot facility in Shenzhen, China. The CNG produced in Shenzhen is sold via a long-term contract to the local municipality which uses it to fuel its municipal vehicles. Commitments are being made for the development of a minimum of two new landfill sites over the next two years and a total of 10 new installations during the next five years. Each facility will enjoy a production lifespan approaching 30 years. Clean Energy is responsible for providing the equity financing for each new project. Lucky Power will retain a 30% interest in the Chinese operations and provide management expertise on a contractual basis in China. With the same agreement Clean Energy has also acquired first rights of refusal for the commercial development of this technology in all other global markets outside the People's Republic of China. The Company anticipates capacity 11,250,000 cubic metres (M(3)) of CNG per annum in the first year of operations, growing to 2,925,000 M(3) of CNG per annum by year five. In addition to the marketable CNG, a substantial source of additional revenues for Clean Energy and Lucky Power is anticipated through international trading of Carbon Emission Reduction (CER) credits This technology should provide significant benefits for all stakeholders: significant savings in the cost of fuel for the local municipality; reliable cash flow for the joint venture local operators; healthy and secure ROI for owners and investors; major enhancement to local air quality; creation of a significant non-fossil clean burning alternative fuel; long-term benefit to the global environment. The Board of Clean Energy is pleased to announce that this agreement with Lucky Power and its recently announced agreement with North Is
May 15, 2007 2:06 AM
Maggie Smith :
Company Name: WELWIND ENERGY INTL ( OTC BB:WWEI.OB ) Symbol: WWEI.OB Current Market: Very Bullish Recommendation: Strong Buy Welwind Energy International Corp. Announces New Board Member
SAN DIEGO, May 2, 2007- Welwind Energy International Corp. (WWEI.OB) (the "Company"'), a pioneer in alternative energy in the Asian market, is pleased to announce Mrs. Pan Huifang to the board of directors effective immediately. Mrs. Pan has been recognized within her industry as one of China's greatest Women Entrepreneurs. Her relationships on a social, business and political level will assist Welwind in furthering its developments within the Chinese market.
Currently Mrs. Pan is the Executive Vice General Manager of Dongxing Plastic Corporation (DPC). DPC is a large-scale, privately operated, blow molding and injection molding factory spanning over 50,000 square meters. The company's business is in the area of injection molding, blow molding, printing, and has four production lines serving customers within the petroleum, chemical, food, medical, building and tobacco industries. There are currently 380 employees, including a specialized technical team, structure designers and 25 mechanical engineers composed of 18 mold engineers.
The company currently has clients in over 20 Provinces in mainland China, Europe, America, Southeast Asia, Japan, Hong Kong, Macao and Taiwan.
Welwind Energy International was founded to build, own and operate wind farms on an international scale. The company's goal is to become a leading provider of clean energy products for the residential, business and governmental consumer.
