Penny Stocks??

[huttohorns78]

Has anyone ever bought and sold penny stocks. I see all these web services that make recommendations on which to buy and outstanding success stories. I was considering using $1,000 to start trading penny stocks. I'd want to "play for free" first to see how it is, but I had a friend who did it and made a decent ROI.

[pabloknight]

Imo, you have to be able to watch them daily.
You will get a spike on one on ONE day only, and that is when you need to sell.
Otherwise, they bottom back out and you got nada.

We used to do this about 8 years ago, it's fun for a while, but like I said, you have to be able to watch them daily, almost hourly, to make a go of it.

Originally Posted by huttohorns78

Has anyone ever bought and sold penny stocks. I see all these web services that make recommendations on which to buy and outstanding success stories. I was considering using $1,000 to start trading penny stocks. I'd want to "play for free" first to see how it is, but I had a friend who did it and made a decent ROI.

[PJ]

I played them a litle when I was young, right out of school when I did not have much responsibility. Made a little a first, then lost it. The companies basically disappeared.

Are you willing to lose the $1000? It's a high risk game and since the companies are usually small capital start ups - more times than not, you are investing in an idea that you think/hope will take off. The key I think to penny stock investing is to be very diversified.

The web services will advertize the home run success stories but take it with a cynical view. Penny stocks are not regulated like stocks in the NYSE. They can be over promoted and manipulated. Another caution is if the penny stock is not traded much, one may have a tough time selling the stock.

Bottom line to me is that penny stock investing is not gambling but it's very speculative. Owning many of them helps with the odds of finding the few success stories. Here are 2 links I found; 1 aricle that cautions the buyer and 1 from Motley Fool that discusses the more positve aspects

http://www.investopedia.com/articles/03/050803.asp

http://www.fool.com/investing/small-...om-heaven.aspx

P.S. I hope I'm not telling you a bunch of stuff you already know. If so, sorry for telling you the obvious.

[UTBubba]

Bad idea. Save your money for google, apple or whatever's next. JMHO.

[CaliHornia]

Penny stocks are for people with money to lose and time to waste.

If you'll recall what happened with Citigroup stock about a year or so ago (I think) you can see why. It had dropped to almost nothing, with everyone expecting them to annouce they were going belly up. But they had good news instead. There was something a huge percentage increase in the price.

So if you invested $1000 you could get a huge gain quickly. Or you could lose it all.

If the $1000 meant nothing to you then it was a no brainer.

[60]

Take the $1000 to Vegas and pick football teams or play whatever game you like and you'll have about the same odds, and probably more fun...JMHO

[huttohorns78]

I have heard that the successes always have a small selling window.

[JohnL]

The biggest problem with penny stocks is....the price is generally set by the last up ticked purchase. When you see that it may be too late as that is the last buyer available. If there are others with you waiting for that up tick, they will all be trying to sell at that point.....no buyers.

[huttohorns78]

can you not preset sell orders. like if it gets to a certain price you automatically sell? High or low?

[JohnL]

Yes you can preset the sell. But there must be a buyer willing to pay the price. And you can be sure you are not the only one watching those sites you are talking about.