Comments on: Why I Like Penny Stocks

By: Phantasmix

Phantasmix — Sat, 28 Apr 2007 03:48:06 +0000

Mike,
shares under $1-5 are usually considered penny stock, depending on who says it.

I believe that’s a reasonable concern in regards to penny stocks, but that’s why you still have to research the company. A lot of them go on to become really big players.

Take Walmart, for example, which was a penny stock (by up to $5 definition) for several years when they just started. Penny stocking doesn’t have to automatically mean day trading, so let the pump-and-dumpers do their thing, but if you believe the company has potential you still may do just fine long term.

And here’s some Wikipedia info on penny stock definition:

The official Securities & Exchange Commission definition of a penny stock is a low-priced, speculative security of a very small company, regardless of market capitalization or whether it trades on a securitized exchange (like NYSE or NASDAQ) or an “over the counter” listing service, such as the OTCBB or Pink Sheets. The terms penny stocks, microcap stocks, small caps, and nano caps are also all sometimes used interchangeably, however per the SEC definition, penny stock status is determined by share price, not market capitalization or listing service.

Penny stocks generally have market caps under $500M and are considered extremely speculative, particularly those that trade on low volumes over the counter.

By: Mike

Mike — Sat, 28 Apr 2007 03:35:46 +0000

I’m here from CCs site as well. Looks like an interesting site.

I think that penny stocks have the reputation of being vehicles for fraud ie pump and dump schemes so a lot of people (myself included) are very wary of them.

I don’t think most companies start as penny stocks…some of them just end up that way.

You mentioned you bought penny stock shares for $3.60…what is the definition of penny stocks, I had assumed literally it was shares that traded for less than a dollar?

By: Phantasmix

Phantasmix — Fri, 27 Apr 2007 03:13:18 +0000

That’s interesting. I always thought of myself as a chicken, but you’re definitely onto something here 🙂

Will try hard to prove myself right (and them wrong, of course), thanks!

By: ThickenMyWallet

ThickenMyWallet — Thu, 26 Apr 2007 21:04:11 +0000

Found your site through Cdn. Capitalist. Great material.

Risk is all a matter of perspective. As a huge generalization, self-employed people have a greater degree of risk tolerance than others (being self-employed myself I see it everyday talking to others).

Penny stocks tend to give the illusion of risk- if you don’t know what you are doing.

If you stick to your knitting and do it well then no one can really argue can they? Best of luck with penny stock investing.