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Penny stock investing?
Old 12-13-2005, 06:05 PM   #1
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Penny stock investing?

Hi all, I was wondering if anyone ever buys penny stocks. I know a lot of these are like lottery tickets, you either cash in or lose it all in a lot of cases. But I saw an article today in Aviation week that a company called BlastGard won an award for innovation for some product that is basically bomb proof bubble wrap. Figuring that everyone is cashing in on defense/security stuff nowadays, I was thinking of buying some, but then saw its traded only on the bulletin boards and is a 90c (BLGA) stock.

So, do you guys ever buy into penny stocks with play money? Or is it usually a sucker's bet?


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Re: Penny stock investing?
Old 12-13-2005, 06:38 PM   #2
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Re: Penny stock investing?

Very tough to win in this area - I recommend BRSIX if you want to play in the micro area - not a penny stock fund though

You will face a few problems if you do:
1) trying to pick a winner - one product or one client sort of thing, never know if it will really take off
2) liquidity - thinly traded stocks so you may not be able to get in and out when you want to
3) bid-ask - spread between the 2 is huge

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Re: Penny stock investing?
Old 12-13-2005, 07:16 PM   #3
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Re: Penny stock investing?

Originally Posted by Olav23
So, do you guys ever buy into penny stocks with play money? Or is it usually a sucker's bet?
Nope. I'd abandon the blackjack dealers for the penny slots before I'd buy a penny stock.

If you're going to invest, though, you should know who you're dealing with. Business Week hasn't run these articles for a few years, but I doubt that anything has changed:
Chop Stocks on the Rise

Not Exactly Gangbusters on Wall Street

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Re: Penny stock investing?
Old 12-14-2005, 07:46 PM   #4
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Re: Penny stock investing?

Here's the SEC's warning on [b]Micro-cap stocks

Bomb proof bubble wrap? C'mon, their "technology" is still "patent pending". I might call the Washington Metro Authority [] to verify their trash can agreement.

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Re: Penny stock investing?
Old 12-14-2005, 08:02 PM   #5
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Re: Penny stock investing?

Hire a monkey and buy a dart board.

Those are about your chances in this arena as a small investor.*
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Re: Penny stock investing?
Old 12-15-2005, 09:33 AM   #6
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Re: Penny stock investing?

It's highly volitile since market cap is very small. My experience - puchased 10 penny stocks 15 years ago - 9 went to zero and one went out 30x in one year. My net return was over 25%. Not bad but will stay away from them since my risk tolerance has significantly lowered over the years.

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