Out of nowhere Im interested in Penny stocks after being told about this forum..help?

Shockwave said: "Hey guys.. Up until about an hr ago I had no intention of ever investing in anything but its got me thinking after reading this forum for the last hour that why not take a chance here and there with some extra money. That XsunX company really got me interested in trying this actually. A few questions though and maybe you guys can help me out since i have 0 experience with this stuff. #1. Any links to FAQ about what im asking? #2. If I see something I'm interested in how do i buy some stocks? #3. Is there a difference between these penny stocks and the ones i always see on the "big market" #4. Where do you guys search your info on these small new companies with future technologies being developed?. Any help really appreciated!!! thanks! Matt Nashua NH"

zebbers said: "theres a whole faq in this very forum. Penny stocks are a gamble. It can pay off big. It prolly pays off best when you make your own judgements and picks and invest in solid new companies. You can make money too riding other people's pump and dump scams though and follow the various websites pumping websites."

Bezzle01 said: "This should help, I'm still very new and it helped me understand more. [URL=http://www.investopedia.com/university/stocks/]http://www.investopedia.com/university/stocks/[/URL]"

Shockwave said: "[QUOTE=Bezzle01]This should help, I'm still very new and it helped me understand more. [URL=http://www.investopedia.com/university/stocks/]http://www.investopedia.com/university/stocks/[/URL][/QUOTE] thanks! I'd rather do all my trading online, sign up online, do everything online pretty much...anyone have recomendations of who to use?. Ill basically do all my own research and basically need someone to purchase it for me. schwab?"

InvestorInMN said: "also look at [url]www.howstuffworks.com[/url] they have a good section about stocks, i also suggest mutual funds and bonds, to invest in its good to have a vareity, go through [url]www.scottrade.com[/url] demo of there site i learned alot just poking around now i own stock in 6 companies!!"

HappyHarry said: "I think you should follow your initial reaction and skip the pennies."

zebbers said: "pennies aren't for the faint of heart. Unless you are willing to literally lose it all, Id start with established companies who file SEC reports :) Maybe set aside a little play money to try pennies."

mar31977 said: "I use Etrade, they have great reporting and its easy. XSNX is a good stock that has made all of its investors some money, it has gone down a bit since hitting its high a couple weeks ago. The rumour is its going to shoot up very fast, because they are ramping up their product, and going to start selling in about 2-3 , months. 2-3 months is allot of time, I advise wait and see, buy around 1.00 if it goes down (I dont see it) hold and when its low buy more. Thats what I did, it went negative 20% one I bought it, I bought more.........and now I at 126% or more. If the up trends start, I suggest buying, the current price is good. I have gotten 4 emails on this stock by others investor groups, which means many other people are going to see the potential of this stock. Good luck, Dave"

pjwilson said: "[QUOTE=HappyHarry]I think you should follow your initial reaction and skip the pennies.[/QUOTE] ive read a few of your posts and youre always very negative towards penny stocks. Why is that? Yea they are struggling companies but there is a lot of money that can be made in these low cap companies. You barely have to know what youre doing and you can still make money. Me for example, Ive only been trading for a little over 2 months and I've tripled my initial investment already. I understand why trading penny stocks is dangerous, but there are ways to minimize your risks. If youre trading 10's of thousands of dollars a day I see why you cant play the pennies, not for big money at least, but for some of us smaller investors penny stocks are a gold mine."

thezster said: "[QUOTE=pjwilson]ive read a few of your posts and youre always very negative towards penny stocks. Why is that? Yea they are struggling companies but there is a lot of money that can be made in these low cap companies. You barely have to know what youre doing and you can still make money. Me for example, Ive only been trading for a little over 2 months and I've tripled my initial investment already. I understand why trading penny stocks is dangerous, but there are ways to minimize your risks. If youre trading 10's of thousands of dollars a day I see why you cant play the pennies, not for big money at least, but for some of us smaller investors penny stocks are a gold mine.[/QUOTE] I believe Happy Harry is simply looking out for the "little guy". Pennies are dangerous - I've heard 100 "I lost it all" stories for every single "I made out like a bandit" story. If you barely know what you're doing - and made $$ - good for you - but you're in the vast minority (been there, done that) - and are simply "lucky, rather than good". I see people on this forum, daily, who are buying based on nothing more than posts on internet forums. Some hit it right - but most buy after the hype and sell on the downswing. As is human nature, they don't talk about those losses - but rather then few winners they manage to hit. If you're doing well - that's great - and I hope your streak continues. But, having played pennies during the first couple of years of my trading career - I warn everyone not to minimize the risks involved. I'll be the first to admit I was lucky - not good! Now I play, for the most part, only blue chips - and am lucky to say "I'm good" rather than lucky! (Though, I'd rather be lucky than good any day of the week)."

thezster said: "[QUOTE=mar31977]I use Etrade, they have great reporting and its easy. XSNX is a good stock that has made all of its investors some money, it has gone down a bit since hitting its high a couple weeks ago. I have gotten 4 emails on this stock by others investor groups, which means many other people are going to see the potential of this stock. Good luck, Dave[/QUOTE] I agree with the E-trade reviews. I have used them for the past 4 years or so and am very happy with my service. I disagree with the "made all it's investors money" statement. For every winner in a stock play, there is a loser. If "it's gone down a bit since hitting it's high" - those who bought high and sold lower - absolutely lost $$. It's simple mathmatics. Buying/selling based on e-mails by other investor groups (internet chat groups hardly resembles an investment group) about rumours means it's a current "hot stock" on the circuit - not necessarily that it has potential. Don't get me wrong - it may be a good company with great potential - but it's hardly the second coming of Christ. Buy based on fact - sell based on rumour!"

HappyHarry said: "[QUOTE=pjwilson]ive read a few of your posts and youre always very negative towards penny stocks. Why is that? Yea they are struggling companies but there is a lot of money that can be made in these low cap companies. You barely have to know what youre doing and you can still make money. Me for example, Ive only been trading for a little over 2 months and I've tripled my initial investment already. I understand why trading penny stocks is dangerous, but there are ways to minimize your risks. If youre trading 10's of thousands of dollars a day I see why you cant play the pennies, not for big money at least, but for some of us smaller investors penny stocks are a gold mine.[/QUOTE] I'm very negative about the companies, for the most part. Penny stocks don't return more than other stocks. If you have $1,000 to invest, and you double it, you have $2,000, regardless of what price you purchased the stock at. The penny stocks are mostly cons. People are investing in these like they're lottery tickets. The only ones that make money when that happens is the brokerage companies."

pjwilson said: "[QUOTE=thezster]I believe Happy Harry is simply looking out for the "little guy". Pennies are dangerous - I've heard 100 "I lost it all" stories for every single "I made out like a bandit" story. If you barely know what you're doing - and made $$ - good for you - but you're in the vast minority (been there, done that) - and are simply "lucky, rather than good". I see people on this forum, daily, who are buying based on nothing more than posts on internet forums. Some hit it right - but most buy after the hype and sell on the downswing. As is human nature, they don't talk about those losses - but rather then few winners they manage to hit. If you're doing well - that's great - and I hope your streak continues. But, having played pennies during the first couple of years of my trading career - I warn everyone not to minimize the risks involved. I'll be the first to admit I was lucky - not good! Now I play, for the most part, only blue chips - and am lucky to say "I'm good" rather than lucky! (Though, I'd rather be lucky than good any day of the week).[/QUOTE] I understand what youre saying but cant you only be as "good" as the information you have or the research youve done? With the pennies can anyone really be good? IMO, what you need to have is good intuition. And what gets me is how people lose everything? I mean, in my short time of investing, ive taken a couple high percentage losses but I took it as a sign to get out and not wait for it to climb back. Do people sit back and watch their stock drop 20, 30, 40,...80% and try to wait it out? To me, and granted I'm still new to this, waiting out high percentage drops isnt very smart. And what did you mean by this. "I warn everyone not to minimize the risks involved." I could be wrong but i think i remember harry saying something like gambling in vegas would be better than investing in penny stocks. I honestly cant see that comparison."

HappyHarry said: "Gambling is exactly what you're doing. The companies generally don't have to do any financial reportings, and many of the companies are run by felons. Most of these companies have no business plan at all. Many have no sales for the last 10 years, etc etc etc. It's a minefield."

pjwilson said: "[QUOTE=HappyHarry]I'm very negative about the companies, for the most part. Penny stocks don't return more than other stocks. If you have $1,000 to invest, and you double it, you have $2,000, regardless of what price you purchased the stock at. The penny stocks are mostly cons. People are investing in these like they're lottery tickets. The only ones that make money when that happens is the brokerage companies.[/QUOTE] maybe its the wrong way of doing this but i've been all about the %'s. maybe if i had $100,000 to invest with i could make money on a small percentage gain. but when im only working with a few thousand dollars i'd have to wait years, or decades, or probably never, to see huge gains, if i was invested in a blue chip. i want to work up and out of these penny stocks but for now theyre all i can afford."

pjwilson said: "[QUOTE=HappyHarry]Gambling is exactly what you're doing. The companies generally don't have to do any financial reportings, and many of the companies are run by felons. Most of these companies have no business plan at all. Many have no sales for the last 10 years, etc etc etc. It's a minefield.[/QUOTE] lol, felons. honestly, i try to only play with the .OB and not the .PK. isnt that a tad bit safer?"

mar31977 said: "PJwilson, You can invest tens of thousands, in pennies. If you can get double you money, what does the initial investment matter, % are % Say, I invest into 5 pennies, some are in the red, most are in the green. I invested 1000.00 and have a 43% return. 43% is 43% no matter how much you invest. Think big, if your method is good, dont worry about the SIZE of your investment, think 1000 is as good a 1 ........dont let the big numbers scare you. I gained more money in pennies then gambling, and I am one hell of a black jack player.......... AND..........there is THE company AND IT's stock...........dont get them confused, the product may be crap but if the stock is pushing 3-10% a day OR MORE............screw the company and the product.........its the percentage that counts. If you buy Intel and make money THERE IS ALWAYS A LOOSER like Zster says, what, likes it more noble to take a large cap at a profit then it is to take a penny for a profit. Its one and the same.........they are not all dumb penny pickers, they know how the stock market works, stop boo-hooing them. Lance as taken a loss.........AND SOMEONE TOOK HIS MONEY.....I dont see ANYONE calling lance an idiot,,,,, :D well...besides me..... :p PJ, do what you are doing! Morningstar has a good forum too with allot of information and charts."

mordecai8614 said: "[QUOTE=HappyHarry]Gambling is exactly what you're doing. The companies generally don't have to do any financial reportings, and many of the companies are run by felons. [/QUOTE] LOL, me and this other guy are talking about starting a business and he's a felon. Time in prison creates creativity ;)"

thezster said: "[QUOTE=mar31977]PJwilson, If you buy Intel and make money THERE IS ALWAYS A LOOSER like Zster says, what, likes it more noble to take a large cap at a profit then it is to take a penny for a profit. Its one and the same.........they are not all dumb penny pickers, they know how the stock market works, stop boo-hooing them. .[/QUOTE] Never said anything about the nobility of what your trading. A profit is a profit, to be sure. My point is the relative safety/risk of penney's vs blue chips. For example, If I buy HD for 40.00 - and it drops to 39,38,37..... I'm pretty secure in the thought that, someday, it will get back to the $40 level.... if I'm willing and able to hold on to it. I can reach out and touch a HD store - buy it's products, see how full the parking lots are - and understand how the general economy/market conditions are affecting it. I can read SEC required reporting that I know, for the most part, has been audited and inspected for honesty and clarity (yes, I know there can be exceptions). That can be said of very few, if any, penny stocks. Another case in point - check out the new thread "The Stockster says" in this forum...... another load of crap from another "investment group". I started out in penny stocks - and made enough to graduate to blue chips. I recognize and understand the risks involved - and simply hope others recognize those risks also."

fireopal said: "thezster - i read in one of the threads somewhere that you mostly day/swing trade... can you suggest some sites/books where i can learn more about this? appreciate it!"

mar31977 said: "Zster, I see your point. And in no way was I saying these emails I am getting about XSNX are .....how do you say....from smart people..lol I used it to detail how much the word is getting around about this stock. ALLOT of people use them........I use them (for laughs) to see whats been on the "next 10000% gainer" And I like to track them to see how they are doing... As I am retired, Lance and these "IG's" are all I have to laugh at.......sadly :( ........... :D"

thezster said: "[QUOTE=fireopal]thezster - i read in one of the threads somewhere that you mostly day/swing trade... can you suggest some sites/books where i can learn more about this? appreciate it![/QUOTE] Would if I could - with pleasure - but I've never read a book or visited a web site that explains or teaches the "art" of day/swing trading. I'm pretty much "self taught" which explains why I come up with so many goofy answers.., right guys?? :o I'm sure someone else on here will be able to point you in the direction you want to go...."

HappyHarry said: "How many people do you personally know that live in mansions because of their huge returns from investing in Penny Stocks? If the answer is none, like it is for me, that ought to tell you something because so many people invest in them."

LanceJ said: "New investors need to stay away from penny stock investing. Penny stock investing is for more seasoned investors who want to gamble a little with a small percentage of their overall portfolio. Just how dangerous is penny stock investing? Go read this thread: [url]http://www.superiorinvestor.net/thread737.html[/url] Where I'm tracking the performance of penny stock man StockDepot. He's the only person whose has even gotten close to running a legit portfolio without me canning them for dishonesty. Notice the week to week performance for the last 6 months. Is that something you want to engage in? Being done 400% for months on end with a few popping here and there of which you snag your profits quick before they fall back down, then do it again? It may not be your bag of tea at all, even if you are a seasoned investor looking to gamble a little. As the moderators have said, and you need to listen to what they are typing. I'll say essentially what they have already said again, in plain terms, to really drill this into your head for the quicker you learn this, the less likely you are to be the victim of a pump and dump scheme. Most penny stock recommendations posted in this penny stock thread are stocks that have terrible liquidity. The reason most of these stocks are being posted here is because they are so NOT liquid, meaning if the average daily volume is 100 shares, and the stock is trading for $0.01, and the outstanding shares is like 10,000, these are numbers that favor the person who is hyping the stock. In otherwords you buy into a crap company that any little investment dollars coming in will move the stock big. Then you go around and hype it from forum to forum (or bash it if you want it to go down, see PLNI thread for more on this) hoping others will see it and invest. As soon as they do, it moves the stock up 10 - 20%, then you sell out and do it again. You've effectively taken the peoples money that you hyped the stock to. Is this illegal? Yes. That's why you see lots of bogus aliases set up with 1 or 2 posts to their name hyping a penny stock. Some even use relay rape or relay ISP's to mask their IP address if they make a business out of doing this. Just in case you're gullable like some of the posts I read where someone thinks: "Lance, I'm not as convinced as you are to read between the lines. I mean many of these penny stocks could turn out to be good investments", I want you to read something I got from infiltrating a penny stock group. They actually teach their members this strategy to STEAL your money: "If your penny stock happens to go down--hold long term--even a year or more....In the meantime "hype" it periodically via stock message boards, etc. " Don't be gullable, websites like stockster.com are for morons. Don't be a moron. It amazes me how dumb some people can be when it comes to investing, especially when it comes to investing in penny stocks. Consider this statistic from Bill Mann, the senior editor for investing at The Motley Fool: "Starting in July 2002, Bill Mann began tracking penny stocks whenever he received an email hyping one. Out of 27 "stocks," exactly one trades higher today. Six no longer exist, and the average loss exceeds 80%. Yet the hype-jobs continue so long as there are people willing to believe." and "Anyway, I handled my mock portfolio as follows: Whenever I received one of those email promotions -- those "research reports" -- from a fly-by-night outfit like Bullseye Stock Profiles, Stockupticks.com, or Urgent Investor Notice, I would "buy" approximately $1,000 of the stock for my dreck portfolio. In this manner, I could track what would happen if the world's most gullible investor swallowed every one of these come-ons. In all, I tracked 27 stocks, 25 of which were listed on the pinks or over-the-counter. One traded on Nasdaq and another on the American Exchange. Six companies no longer exist. Only one, IBX Group (OTC: IBXG) trades higher than it did when I began tracking, and with an 11% gain, even that one trailed any relevant benchmark. My conclusion: The people who bought into these scam "research reports" have been fleeced, taken in by greed, gullibility, and more than a small slice of stupidity." And let's not forget the LA Times article several years ago entitled "SEC Files New Charges Against Teen," where we read of a young guy named Cole Bartiromo, 17, who made $91,000 pumping up stocks on Internet message boards. Mr. Bartiromo had a list of 15 microcap stocks he would purchase in large blocks, go on to Internet message boards, hype up with supposed news stories from CNBC et al., and then sell hours later for gains of as much as 370%. And don't forget what our buds over at Motley Fool did...LOL... a page from my own play book: demonstrating absurdity with absurdity. Check out: [url]http://www.fool.com/School/Zeigletics/Zintro.htm[/url] The Motley Fool wanted to demonstrate how stupid and gullable most people are by creating the Zeigletics ploy -- a fictional company on a fictional exchange and "hyping" it to parody the antics of penny stock promoters. Here's an excerpt: "Now, a few brief notes on your new identity. You're about to become a Penny-Stock Hypester! You'll be harnessing the power of a new medium--online computer communications--in order to promote the purchase of thinly-traded penny stocks issued by companies with the usual dubious prospects. Your primary mission will be to convince others to buy these stocks, just after your own purchase. A successful hype job will net you rapid and large capital gains, which you'll do best to liquidate as quickly as possible before moving on to the next. Sound promising?""