Penny Stocks

[igor555]

i think it belongs, rarely geets discussed

[guestuser]

@farley013

I used to make $2 rips trading penny stocks for JT Marlin.

Ohhh this guy. That was gold.

[Sweep_the_Leg]

@bchad

I’ve often wondered if the arrival of an unsolicited email about a stock works as a contrarian indicator.

Without a doubt, but it’s hard/impossible to short most penny stocks so what are you going to do…

[igor555]

^move to belize

[bchad]

@Sweep_the_Leg

@bchad

I’ve often wondered if the arrival of an unsolicited email about a stock works as a contrarian indicator.

Without a doubt, but it’s hard/impossible to short most penny stocks so what are you going to do…

Thanks! I’ve been waiting 6 years for that gem!

[bchad]

@S2000magician

I didn’t really want to move this to the Investments forum – trading penny stocks is the antithesis of _ investing _ – but the only alternative was the Water Cooler.

Against my better judgment, I put it here.

Just because the CFA curriculum is oriented more toward value investing doesn’t mean that we can’t talk about trading here.

Just as there are smart and dumb ways to do investing, there are smart and dumb ways to do trading.

Trading discussions add value to this forum to the extent that they are (or lead to) discussions about trading strategy, what are better and worse ways to approach trading, and perhaps how trading and investing are different.

So don’t be too hard on yourself, s2k.

[Huskie87]

I only tried this once about 10 years ago and lost all my money. The worst part is that these companies often do not finalize the bankruptcy process, meaning you can’t even use your capital gains losses. Right now I can see that stock worth $0 in my brokerage account, can’t sell it, can’t count it as a loss on my tax statement. Maybe the owners will bring this zombie company back to life and I’ll be rich, but i doubt it.

[numi]

I personally don’t invest in anything under $300mm market cap. I worry about liquidity traps and lack of volume. For the most part my sweet spot is in the $1-10 billion market cap but will go lower when I find something extremely compelling. Typically this might be a high quality biotech or tech company, but you really need multi-bagger potential and some sort of downside protection (e.g. insider buying, cash, other monetizable assets, shareholder friendly corporate governance) so you don’t get your face ripped off if you’re wrong.

Penny stocks? I don’t even touch them.

[igor555]

i swear im the only person who doesnt invest in biotech =/

[kevinf12]

Huskie - if you are in the US cant you treat that as a worthless stock and take the loss?