Penny stock investing?

Olav23 · 12-13-2005, 06:05 PM

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?

wildcat · 12-13-2005, 06:38 PM

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

Nords · 12-13-2005, 07:16 PM

Quote:

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

ats5g · 12-14-2005, 07:46 PM

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 [WMATA.com] to verify their trash can agreement.

- Alec

12-14-2005, 08:02 PM

Hire a monkey and buy a dart board.

Those are about your chances in this arena as a small investor.*

Spanky · 12-15-2005, 09:33 AM

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.

12-13-2005, 06:05 PM	#1
Olav23 Recycles dryer sheets Join Date: Jul 2005 Posts: 423	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?

12-13-2005, 06:38 PM	#2
wildcat Thinks s/he gets paid by the post Join Date: Feb 2005 Posts: 1,896	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 __________________ "These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"

12-14-2005, 07:46 PM	#4
ats5g Full time employment: Posting here. Join Date: Oct 2003 Posts: 934	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 [WMATA.com] to verify their trash can agreement. - Alec

12-14-2005, 08:02 PM	#5
Marketneutral Guest Posts: n/a	Re: Penny stock investing? Hire a monkey and buy a dart board. Those are about your chances in this arena as a small investor.*

12-15-2005, 09:33 AM	#6
Spanky Thinks s/he gets paid by the post Join Date: Dec 2004 Location: Minneapolis Posts: 2,778	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. __________________ May we live in peace and harmony and be free from all human sufferings.

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