Penny Stocks in Perspective
There seems to be a great deal "off handed" dismissal of the category of stocks known as "Penny Stocks".
I think one of the reasons for this, is lack of a clear agreement of just what constitutes a "Penny Stock".
For some, the type of stocks shown on this list http://caps.fool.com/player/tmfstockspam.aspx , is what comes to mind when the term "Penny Stock" is used. AVOID these at all cost in real life. They can be good for CAPS points, but they are "super long shots" to ever make you any money.
For others, including myself, it is generally stocks that trade for less than $10.00.
For still others it is just a "catch all" term for low priced stocks of companies that they consider to either be on the verge of failure, or with almost no chance of ever being a real success.
We all have our own understanding, and are all entitled to that understanding.
Using my criteria (i.e. stocks that generally trade for less than $10.00), the following is a short list of some stocks that once fit into this category, and which over time have proven to be fantastic success stories.
There are many others, but this list will serve to make my point.
Proper investing requires understanding the company behind the stock, after doing DD on the fundamentals, understanding what the company does, and why it is likely to become successful in time, and doing all of the things one would do before investing in any company.
Sometimes you will be wrong, just as you can be wrong when investing in "NON Penny Stocks", and you can suffer a loss.
One of the keys to investing, and especially investing in "Penny Stocks" is to "buy at the right price", be willing to add to your position on "dips", don't panic, and keep a close eye on them.
This is not intended to be an exhaustive treatsie on investing in "Penny Stocks", or not investing in "Penny Stocks", but simply an attempt to get individuals to not dismiss stocks of certain companies out of hand, simply because they are "Penny Stocks".
Sometimes it is a case of getting ahead of the "Curve", and getting into an investment at the right time, then waiting for the "Magic" to happen.
This is JMO and worth exactly what I am charging for it.