How to choose penny stocks?

[guest]

Now that I am under great financial pressure to produce loads of money in quite short period of time, I am looking into how to choose what penny stocks to buy. What are day trading magazines? Can someone here please point me to the right direction? Please help. This is the only way I can think of to generate that much money within short period of time, next to gambling, of course.

[bhl88]

Google... I tried it and it worked. And check multiple sites, they may have different data.

[guest]

Originally Posted by bhl88

Google... I tried it and it worked. And check multiple sites, they may have different data.

Well, I google it, too. But I have no idea which is good or bad, When it comes to penny stocks, it is very risky and has much higher chance of scam. I have no idea which website is good or even to trust them.

[Nosauz]

Get a job? there's no "easy" way to earn money, or take out a loan and get a job to continue to pay, penny stocks and stocks in general are huge investments in time, as I knew a friend who played them much like poker he would have his ups and downs, and if you need guaranteed money go work or get a second job because there is no risk associated with working.

[LynnieS]

(Note: Below is my personal opinion only.)

Whoa. If you have to earn a lot of money, I'm not sure that day trading penny stocks is the right route... BTW, you should know - and keep to! - your risk tolerance and how much you are willing to risk (i.e., limit thresholds) first before getting into this.

Accept the fact that at times (perhaps most if not all of them), you will lose every penny that you spent on the order. If you cannot do that, IMHO, you should not get into this; it's very much like being a smart gambler and being able to manage your money well.

For these sites... IMHO, I probably wouldn't trust any of them, but if you get any tips from one, would definitely recommend that you do your own due diligence first before jumping into the purchase. Just because the stock price is cheap and you can buy a large lot with the same amount do not mean a great deal if the stock drops to nothing or you are forced to sell at a loss. There is no guarantee that the stock, after the initial pop after it is recommended (assuming that it actually gets one), will stay up.

[synaesthetic]

Originally Posted by Nosauz

Get a job?

hahahahahahahahahahahaha

hahahahahahahahahahahahahahahahaha

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

HAHAHAHAHAHA

It's not that easy anymore.

[Nosauz]

Originally Posted by synaesthetic

hahahahahahahahahahahaha

hahahahahahahahahahahahahahahahaha

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

HAHAHAHAHAHA

It's not that easy anymore.

lol and playing the stock market to make money is a much better idea... talk about unrealistic, at least the get a job whether it's seasonal or retail or low end ends up being money that is actually not dependent on the whims of the market. Seriously if your thinking penny stocks the you should also be considering robbing an armored car to scrounge up the money.

[synaesthetic]

I'm not going to comment on the intelligence (or lack thereof) required to actually attempt making money on penny stocks.

[Nosauz]

Originally Posted by synaesthetic

I'm not going to comment on the intelligence (or lack thereof) required to actually attempt making money on penny stocks.

I mean if you have like 3-4 free hours a day say a highly motivated high school student who has fluff classes during the day where u can read into the actual business models and trends of forecasted stocks and have a set guideline of maximum losses that you are willing to take and are doing it for the fun/enjoyment and not the monetary reward then it can be somewhat rewarding, but all in all looking for a job versus penny stocks is by far the better investment of capital and time.

[Vexx]

I can't believe this question is being asked *here* of all places.

Yeah... I believe the latest ratio in the US is 6 job seekers to each open job (and that's not filtering for actual required qualifications, "over qualified", "less than stellar credit", "medical conditions", and other discriminators).

Penny stocks are something to play with money you don't care about (like gambling) -- sometimes you hit big percentage-wise.... but they're still penny stocks.

[mg1942]

There's still EZ way of making $$$ with some 'effort'. My technique still beats playing pennies 'n nickels game at the casino stock market.

Buy the most desirable handbags (made by Michael Kors, Dooney & Bourke, and Coach) on-sale @ your nearest department store and then sell it on ebay. It really helps if you have 'connections' (like me) with the department store employees so you can get really deep throat discounts.

My profit margins for last year are RIDICULOUS (at least in my standards)

I made $4,000 after deductions in just 1 month, in the year that most people would rather want to forget (2009)

I hope I can make enough $$$ so I can start a jewelry business in Los Angeles and hire really good accountants

Originally Posted by Vexx

Yeah... I believe the latest ratio in the US is 6 job seekers to each open job (and that's not filtering for actual required qualifications, "over qualified", "less than stellar credit", "medical conditions", and other discriminators).

Word on the street is that there's lots of fresh-off-the-boat plane Indians and Philippinos with CPAs looking for work in downtown L.A. and greater L.A.
I'd take those 2 groups once i'm open for business

[SaintessHeart]

There isn't a way to choose penny stocks because it is no different from gambling : there isn't a concrete future in the company in the first place, and it is as good as putting your money on big or small on the table. There is something called fundamental analysis involved when picking stocks to invest in, even the highest liquidity forex market requires analysis of graphs and charts.

If you are in a financial pressure, the first thing you should do is to control your expenditure, not throw money into something and hope to get rich quick.

I am speaking from experience : I attended a trading course a few months ago and currently playing the forex trading game as training (and constantly losing money atm due to the unstable market, thank you Greece). So don't be dumb and blow your money like the rest of the speculators in the stock market.

[MeoTwister5]

Meh speculative economics. One of the reasons economies and livelihoods are driven into the ground. Putting your entire future on the line for something that is nothing more than a statistic and therefore doesn't even really exist (or at least not yet) is really a bad way to invest IMO.

[SaintessHeart]

This is due to something called the crowd mentality, making most penny stocks investors deuces and huge losers.

Here is a brief outline of how some penny stocks come about :

Stocks are often referenced to batches company shares available for sale. Any company set up would need capital to finance their operations, and they promise a percentage payout of profits to financiers as a way to goad investors into pumping money into their company.

Smaller companies who wish to expand fast will have an IPO (initial public offering) to draw investors and generate a large capital. As their company has no real networth or value, they price their shares significantly lower, below $5 in US. These stocks are not endorsed by financial analysis and research companies like S&P, therefore they can be traded over the counter.

However, since their accounts are not carefully regulated, there is a high chance that most of that data are not legitimate, therefore buying penny stocks is as good as gambling. Also, there are not many people who might know of the stock, so there isn't much liquidity : you can't sell or buy your stock as you wish as and when you like as there might not be a market at the moment you want to sell, or even the first place!

Moreover, the lack of concrete financial statements make the stocks easily manipulated by insider traders : they slowly buy up the company stock to drive its value up, then post the company's "growth" on various forms of media to attract beguiled investors. This will cause a "buyout" where investors rush in to buy company shares, and when it hits the peak, the insider traders dump their stocks to generate a huge profit. As for the beguiled investors, they lose money due to the very basic principle of supply and demand in economics : the sudden increase in supply will lead to a significant decrease in demand, thus driving down the financial worth.

I would rather you trade in forex. You need little capital to start trading due to high leverage, and it is incredibly liquid : unless your country still runs on bartering to run its economy (like those with blood diamonds). The biggest risks are still wrong calculations and no risk control : the "stop loss" function is there for a reason.

Investing in the stock market is no easy way out to big money, you still need hard work as your initial profits will be low, but due to arithmetic compounding, $10,000 can become $1,000,000 in 2 years even at a 3% increase per month (do that math yourself)!

[LynnieS]

Without knowing why you need a lot of money fast, I do not know if "get a job" (first or second) is a valid option. Definitely in the U.S. - although it does seem to vary depending on your location, your expertise and your skills - finding a job may not, as Vexx and synaesthetic said, be easy.

Being an entrepreneur like mg1942, unlike trading penny stocks, is likely a better solution, but (1) it needs having a good idea - one that isn't already filled to capacity - first, (2) a lot of hard work and (3) patience/good luck. The wife of a good friend of mine is doing what mg1942 does, but buying used goods in Japan and then reselling it to people in Thailand and Vietnam. It's not easy for her since she is kept really busy getting the products first and then being available to take calls from prospective buyers till early in the morning every day. I don't know if it's worth it, but she seems to be having fun while making some decent (I think...) cash. OTOH, her husband hasn't given up his day job, so take it for what it's worth.

There can be any number of reasons why a stock is cheap and traded over the counter, but with the sites geared toward traders (in penny stocks or anything else), keeping your head - and not fall for touts - is very important. Not as important as managing your money well, of course and IMHO, but ranks right up there. Without knowing your background in finance, it's hard to give any concrete ideas on buying/selling, and anyone who tries without knowing this and a lot more would, IMHO, be risking problems, legal or otherwise.

As far as I know, there is no "black box" system out there that will consistently give its users profits; looking at the ads for those (and you'll find many systems out there), one thing to pay attention to is with the data used in backtesting itself. Questions like "What does the quality of the data look like?", "What happens if you apply data from this range of dates instead?" and "Why did you choose this range of dates for your prices?" are all important.

[guest]

Guys, I already have a job but am not allowed to have a part-time job because of my visa status in US. There is no way that my salary can pay off this in short period of time. No, I didn't gamble away my money or did something illeagal. Sometimes unexpected bad things happen in life and you just have to deal with it. And no, I don't have anything worthwhile to sell. If anyone has a better idea, other than buying penny stocks, to generate four thousand dollars, with only five hundred dollars to begin with, in two months, let me know.

[SaintessHeart]

Originally Posted by guest

Guys, I already have a job but am not allowed to have a part-time job because of my visa status in US. There is no way that my salary can pay off this in short period of time. No, I didn't gamble away my money or did something illeagal. Sometimes unexpected bad things happen in life and you just have to deal with it. And no, I don't have anything worthwhile to sell. If anyone has a better idea, other than buying penny stocks, to generate four thousand dollars, with only five hundred dollars to begin with, in two months, let me know.

It is either you try your luck playing penny stocks or do something unethical like robbing a bank. There is nothing legal in my head right now, other than mg1942's entrepreneurship. Penny stocks is no different from gambling in a casino.

Have you negotiated with your creditors? PLEASE don't tell me they are loan sharks.

If you are willing to stay up 24/7 to trade in the foreign exchange, you can probably do it staring at the screen whole day, doing a long when it rises and quickly hit sell once the original ask price drops below the bid price, and doing a short when the vice versa happens. Do around 30 trades per day if you can and you should have 4k in 2 months, earning the extremely miniscule pips.

[guest]

Originally Posted by SaintessHeart

It is either you try your luck playing penny stocks or do something unethical like robbing a bank. There is nothing legal in my head right now, other than mg1942's entrepreneurship. Penny stocks is no different from gambling in a casino.

Have you negotiated with your creditors? PLEASE don't tell me they are loan sharks.

If you are willing to stay up 24/7 to trade in the foreign exchange, you can probably do it staring at the screen whole day, doing a long when it rises and quickly hit sell once the original ask price drops below the bid price, and doing a short when the vice versa happens. Do around 30 trades per day if you can and you should have 4k in 2 months, earning the extremely miniscule pips.

No, they are not loan sharks. I have nothing to do with that. I don't have to negotiate with my creditors now because I haven't owed money, yet, but I will in two months. Can you give me more info about that foreign stock trading (staring at a computer like all night). I may look into it because I have a full time job during the day and I can't do that.
I have an account with etrade.com now. Hey, I should just buy etrade now. It is about a dollar per share.

[SaintessHeart]

Originally Posted by guest

No, they are not loan sharks. I have nothing to do with that. I don't have to negotiate with my creditors now because I haven't owed money, yet, but I will in two months. Can you give me more info about that foreign stock trading (staring at a computer like all night). I may look into it because I have a full time job during the day and I can't do that.
I have an account with etrade.com now. Hey, I should just buy etrade now. It is about a dollar per share.

Not right now.

If you want to buy financial instruments, you have to be prepared to hold them for long to earn money, other than currency.

There isn't any way you can earn 4k from the stock market in such a short time you know. Even from penny stocks, you can only grow up to 150%-200% if you are lucky enough to dump at the time the insiders are dumping. $4,000 is 800% in simple interest, and in compound, mathematically you have to grow your fortune [(40th√8)-1] per day, which is approximately 5% each day. Most full-time traders target 3-4% maximum growth per month! You need to have at least 90% success rate for all the trades at the end of the day, even in forex. Quite hard to achieve as most risk-adverse traders get around 70-80% at 3% growth per month.

Try negotiating with them to pay by instalments? Or asking your boss for a loan? It would be easier to work out from scratch what exactly happened so we can help you on the creditor side.

[ChainLegacy]

You can try your luck at the foreign exchange market... but pretty much every option that can potentially make you money quickly also carries high risk.