About Murray Cass Expertise I am eager to help investors find their way through the muddle of tech investing. I can answer questions concerning tech investing, financial reports, stocks, and options. Having worked in the computer industry for over 20 years I have a good general knowledge of computer technology. I have read over 100 investment books -- mostly the old ones. I spend my time doing investment research, attending annual shareholder meetings, and managing portfolios.
Experience Professional Engineer, MBA, over 20 years experience in computer industry, 9 years intensive investing experience.
Question I don't have much money to invest, so someone suggested Penny stocks. How do you 1- research and 2- buy Penny stocks?
thank you very much
john
Answer Hi John,
That someone is not giving you very good advice. How much you invest has little to do with the price of the stock you are buying. If you have $1000 to invest you can buy 1 share of a stock selling at $1000 or 100,000 shares of a stock selling for a penny. They will both cost you $1000 more or less (commissions may vary). Which is a better investment? That depends on the prospects and value of the company NOT ON THE STOCK PRICE!
Forget stock price! Look at the company. Invest in a company whose prospects you like. Consider valuation, management and a gazillion other things but not stock price.
There are stats that will show that stocks trading under $10 outperform stocks trading above $10. Go with that if you want - I never care. But this penny stock business is craziness. Penny stocks are normally issued by companies in the same way that lotteries issue lottery tickets. All you are buying is hope. (And I think you might be better off with lottery tickets.) Most are not viable businesses with reasonable incomes or prospects. Most are gambles. Go to Vegas. You might have more fun. With pennies it is the promoters and the shyster management who make the money. Penny stock investing is an unmitigated disaster of an investment idea.
Have I made my point?
You must decide whether you want to invest or gamble. If you invest you buy companies. If you gamble you buy penny stocks, lottery tickets or visit casinos. It's your call.
Regardless what you do, have fun and don't lose more money than you can afford to.
