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Good Penny Stocks for 2011
Disclaimer
Stock speculation is very risky. It may not be suitable for you.
Do not trade with more than you can afford to lose.
Seek professional investment advice.
This is not investment advice.
No warranties, you are on your own.
Good Penny Stocks for 2011 When you have found a bunch of good cheap stocks, you want to separate out the ones that will go up So you need to know what excites investors
Different Types of Investors Buy and hold Day trader Specialize in specific industries
Judge the Beauty Contest Judges Stock picking is like judging which girl will win a beauty contest You need to know what the other judges like
The Ugly Duckling
To get big returns, find the ugly duckling that can turn into a swan – fast
Ugly Ducklings Shells are ugly, ducklings They may have been abandoned by their officers A deal can turn them into a swan fast
Learning at Dog and Pony Shows
IPO Underwriters give due diligence meetings for brokers to sell their stocks
As head of trading for a Wall Street underwriting firm, I might go to two a week
The company makes their pitch, then the investment bankers ask questions
Watching the judges judge stocks
Wall Street likes fads fashions
Remember - The Internet boom – Oil and gas boom – Gold stocks – Technology – Conglomerates – Uranium stocks – Railroads
Recent fads
Swine flu
HIV
After 9-11
Oil cleanup stocks
My favorite gold stock Scott's Liquid Gold went up when gold first sold over $800 They make furniture polish
Fast Growth The prospect of fast growth produces excitement Big untapped markets Proprietary products
No Competition Monopoly Proprietary technology Sustainable competitive advantage The next big thing
Great Biotech Drug Idea
Take it once and you have to take it every day for the rest of your life or you die
Beware Penny Stock Promoters Penny stocks promoters often go into hot businesses Beware frequent changes of business
Promotion Promotion drives stocks Especially penny stocks
Blue Sky Learn More The “Blue Sky”is often value more than reality Imagination can get carried away Reality is hard
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On Amazon.com: – How to Find a Home Run Stock – How to Pick Hot Reverse Merger Penny Stocks
John Lux Trader, investment banker, former OTC Market maker & attorney Lux.Investor@ gmail.com
Copyright ŠJohn Lux 2011