Penny stocks

[TemptationTammie]

I've had a couple people mention that they buy them.
Does anyone here have experience with or advice about them?
Are they worth the time and effort?
Are there apps or sites that you would recommend or avoid?

[Leah Layada]

They are a scam 99.9% of the time and the most fucked up thing is that they prey on the poorest, most financially inept people they can find. Those companies that bundle up penny stocks and sell them to you at a "discount" used to send mailers to all the people in my trailer park growing up. The stocks are of even less value than those "collectable" limited edition plates they sell in the back of Sun magazine- at least you can eat off the plates when you discover they have no other benefit. I can already imagine them having apps to work their scam now...I'm from a very rural place in Louisiana and I'm literally the only person in my family that even knows how to use a computer in a basic way. The fact the scammers have an "app" or a "website" at all will give the scam even more legitimacy...and if they use romantic language with a bit of technical sounding jargon thrown in it's a done deal.

Basically when a stock is discovered to have been overly valued (sometimes via a scam too. lol) and to be essentially worthless the FTSC will pull their ability to trade eventually but everyone will have notice that's gonna happen beforehand so the stock drops down to nothing. The scammers bank on the fact that there are lots of poor americans who have vaguely heard of stocks and understand the concept of stock prices having the potential to go up.

I didn't google but I think that's right. Anyway, I know it's def a scam.

If you're looking to invest money you could just get long time CDs or maybe one those thingies that are a collection of utility stocks that pay dividends plus earn interest. Keep in mind I have no fucking idea what I'm talking about though; my investments consist of Louis Vuitton bags and breast implants.

[endurance]

Unless you really know what you are doing - buying near the top of a stock market bubble is for suckers. Anything. Let alone penny stocks which are illiquid (not much trading in them means the price can be very unpredictable, usually to your detriment.)

[actionjackson647]

the vast majority of penny stocks are scams. they trade on the pink sheets where they arent required to file any financial information unlike regular stocks. They are also very susceptable to pump an dump schemes.

your better off buying stock in reputable companies than trying for teh quick winner.

theres an ols saying
bulls and bears get fat pigs get slaughtered

[SpiceItUp]

Originally Posted by endurance

... penny stocks which are illiquid (not much trading in them means the price can be very unpredictable, usually to your detriment.)

Originally Posted by actionjackson647

the vast majority of penny stocks are scams. they trade on the pink sheets where they arent required to file any financial information unlike regular stocks. They are also very susceptable to pump an dump schemes.

your better off buying stock in reputable companies than trying for teh quick winner.

theres an ols saying
bulls and bears get fat pigs get slaughtered

^THIS

[Loxly]

Investing any amount, in any stock, is a gamble. So never bet more than you are willing to lose. And as ActionJackson reminds us.... don't get greedy.

I hold a few low costs stocks for the above reason but also because I believe in what they're trying to do or think they're cultivating a future profit. These are long term investments that might not pay off for 5-10 years. Or.... they might go in the toilet.

I've seen people throw hundreds at the lottery but they would never consider buying a stock. So we all gamble in different ways. Good luck to you.

[TemptationTammie]

Thank you. So far it seems the consensus is - don't do it. LOL.
I was on the fence as to whether I would play around with it or not. I already have some stock in legit companies and I've been letting them roll over and reinvest for a couple of years. Every so often I'll add more money when I have a few hundred to spare since I don't touch it.
But I'd had some acquaintances talk about the penny stocks.

[stikiwikit]

Penny stocks. The advice is what I have learned in my experience in investing. Most penny stocks are thinly traded, no liquidity, and probable losers.
I would look toward the indexes. Read up on Scott Burns advice. He has a weekly column in the AAS and also has a web "sight" as Toyz would put it.

[newbieguy]

Tammie,

There's a happy medium to stock trading. As most have said, the 'by the definition' penny stock is, in more cases than not, a loosing venture. Most people who attempt to trade them buy some stock that they got a 'tip' on in e-mail or that they saw mentioned on some website. Those tips and websites are trying to sucker people into buying. Basically, when you buy a stock that is not traded heavily (i.e. penny stocks), that will immediately drive the 'value' of the stock up. That's when the scammer will unload their shares at a profit, which then drives the 'value' of the stock back down. Unfortunately, because the stock is not heavily (or barely even thinly) traded, by the time you try to sell it, more times than not there are no buyers and often the value is at or below what you paid for it.

Now, back to my comment about happy medium. There's a middle ground that, IF YOU ARE WILLING TO INVEST TIME AND RESEARCH, can be very lucrative. There are stocks that still fall in the definition of penny stock (any stock valued at <=$2) that are of legitimate companies; several of which may be start-ups, new ventures, pharmaceuticals working on a new medicine, energy companies working on a more efficient fuel, etc. You can find stocks of this type in the $0.50 - $2 range which are of companies with a bit of history, who post their financials, and who often trade at >=2 million shares a day. These stocks are not sure fire by any means (as no stock is), but if you are willing to do the research, you might find one or several that can bring you money. I know several people who trade these types of stocks as a side, or even primary, income. Most people think they can buy a penny stock in the morning for $1k and sell it in the afternoon for $2k and make a profit. Most of the people I know may have started with $10k-$20k and they grind it out. Maybe 10, 20 trades a week and they may net $2k for the week. But in the grand scheme of things, that $8k a month and plenty for the average person to live off of. Those individuals have applied data analytics (which several of the nice stock software packages will offer), which will analyze historical stock trends for patterns, and they may buy a stock and then sell it at maybe a 10% increase, and this may happen over the course of a week. But you do this 3, 4, 8, 12 times in the week, that 10% adds up.

All in all, if you are committed to making money off of 'penny stocks', you have to be committed to the research and, as others have said, be willing to loose what you put into it. There's several that I invest in right now and I have a watch list of 20 others that I'm analyzing for patterns. It's definitely a hobby for me. I've made money. I've lost money. But generally up. But I'm too chicken to go all in with it.

Good luck on your venture if you decide to try it! :-)