Why?

There may be some of you that read this blog that are into penny stocks (OTC, pink sheets, the like). I am not. There is a lot of money to be made in many different things. One of them is penny stocks.

Have I made money in penny stocks. Yes, and a lot of it. So, why am I anti-trading these stocks, at least for the most part. I deem these as higher risk stocks for the following reasons:
  • Less liquidity
  • Fewer traders
  • Patterns less defined
  • False sense of confidence
  • Less cohesiveness among traders

Now, this isn't true of EVERY single penny stock. Probably my best play of a penny stock is TRPH. When we got in, it was in the $0.30-0.70 range. We bought many thousands of shares and by the time we sold, it was around $7-8. Cha ching.

HOWEVER, how my husband came about this stock was through chatrooms, heresay. There was no technical analysis, just sort of winging it. My husband chose quite a few different penny stocks that made some decent money. Of course, most of that was all heresay, chatroom stuff.

Due to over confidence that was really a false sense of confidence (aka ego), we can all see the downfall here. And, there was no such thing as a stop (aka stop loss) at this point. Of course, we learned nothing from seeing Intel stock go from above $140 to the $14-16 range, eh?

The market is always right. The market NEVER does something to a person because it is what it is. Few of us have true impact on the market. Sure, maybe if you're Jim Cramer, Warren Buffet or George Soros, maybe. But, most of us cannot say that.

If I had money that I just didn't care about whether it went to zero or not, maybe, just maybe I might invest again in another penny stock. HOWEVER, I'd just as well give the money away to someone that might need the money right then and there. I'd find that to be a better use of money.

I remember my husband (soon to be ex) was corresponding with the CEO of Genomed. They had all these promising things. That's fine, but now their stock is in the sub-pennies. Like 0.005 cent. That is pretty darned cheap. Okay.

If you want to trade penny stocks, have at it. As for me, there are plenty of ways to make money without having to go this high risk.

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