Seeking Alpha

Penny stock trade booms

  • "I like things below three cents, because of the upside potential, and it limits the downside," says penny stock trader Steve Templeton, who recently used his winnings on unlisted medical marijuana stocks to finance a move to Tennessee from California.
  • Average monthly trading volume at OTC Markets Group (OTCM) - which handles trading in unlisted stocks - is up 40% in dollar terms this year to $23.5B, and traffic on penny-stock trader forum InvestorsHub doubled between Christmas and last month. Clem Chambers, head of the company that runs the forum, says most of the increase is from longtime existing members whose interest has been renewed.
  • "A lot of these people, who were looking from afar, are coming back ... It feels like somebody pulled a switch."
Comments (34)
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    I’ll make anyone trading penny stocks a better deal; for every $1 you send me, I’ll send you back $0.50.
    23 May, 10:31 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3666) | Send Message
     
    in 2011, ACAD traded for .89 cents, DPDW traded at .43 cent and AMNF traded at .75 cents.

     

    You just know how to find them.
    23 May, 05:23 PM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    Sure, you can find penny stocks that eventually took off, but for every one that did, how many didn't?

     

    I won't take the risk to find them.
    23 May, 08:10 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (3666) | Send Message
     
    I tend to look for stocks that have earnings reports, have to be able to find balance sheets on yahoo for example, anything you can't find the numbers on, you don't even consider.
    23 May, 08:17 PM Reply Like
  • 26175913
    , contributor
    Comments (15) | Send Message
     
    I do realize that penny stocks are quite risky but there is a mining play out the Medinah Minerals (OTCPK:MDMN) that I have made thousands on over and over and it is actually a legitimate exploration company that I believe is going to break loose soon. They have one of the richest mining properties in Chile and about two weeks ago it ran up from a little under .04 to a little over .10 as someone acquired 100,000,000 shares. No one plops down $10,000,000 unless they know something! As well, at the recent AGM, it was revealed that they added a member to the BOD that is a retired Executive Director of a well known mining company in Chile. That said...sometimes, a penny stock can be quite profitable.
    24 May, 01:09 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    Matt, I definitely agree; no financials, no consideration.

     

    Everyone has a different approach on investing; you could put 1,000 people in a room and find 1,000 different investment strategies. Part of my approach involves eliminating as much risk as possible and there is far less risk in a NYSE or NASDAQ stock than there is dumpster diving for penny stocks. I won’t invest in penny stocks to prove this, but I’m confident my slow and steady approach will outperform a get rich quick scheme over time.

     

    26175913, $10 million isn’t a large amount for someone running a pump and dump, I’d call that ‘bait’. But you are at least checking out management and that should be added to being able to see financials.

     

    Good luck to anyone buying penny stocks, but when all else fails, see my opening offer. I’ll give you a binding legal contract if you need one.
    24 May, 03:13 AM Reply Like
  • 26175913
    , contributor
    Comments (15) | Send Message
     
    Sorry...in the post above, I mistakenly put that the new BOD member was from a Chilean mining company but I should have said a Peruvian mining company that operates in both Peru and Chile.
    25 May, 06:12 AM Reply Like
  • t time
    , contributor
    Comments (196) | Send Message
     
    Actually first you must promise to send 50 dollars for every dollar sent, then once someone sends the dollar you go ahead and actually send the 50 dollars for every one dollar sent so that they see it in their hands, have a chance to look at it and get excited - but then quickly go to the person when they are not expecting you and steal it back - along with the original dollar. That would be more realistic experience...
    23 May, 10:46 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (5214) | Send Message
     
    Dad told me never trade anything that isn't listed on the NYSE. I make an exception to buy some stocks that are listed on Nasdaq.

     

    But just staying away from OTC will save you a lot of money.

     

    You're better off to go to a casino and feed the slot machines.
    23 May, 11:03 AM Reply Like
  • Passerby37
    , contributor
    Comments (34) | Send Message
     
    Everyday I watch the bums line up to pick thru the NYSE and Nasdaq bins. Why the OTC refuse is ignored, I do not understand.

     

    Price is what you pay. Value is what you get.
    23 May, 11:40 AM Reply Like
  • jsteinm1
    , contributor
    Comments (147) | Send Message
     
    "I like things below three cents, because of the upside potential, and it limits the downside," says lucky penny stock trader who doesn't understand that shares can trade for less than a penny
    23 May, 11:47 AM Reply Like
  • Miguel Marecos
    , contributor
    Comments (71) | Send Message
     
    If it goes to zero you still lose all of your money... if you buy at 3 cents or 30 dollars is meaningless...
    23 May, 11:52 AM Reply Like
  • 11146471
    , contributor
    Comments (454) | Send Message
     
    Wolf of the wall street...
    23 May, 11:59 AM Reply Like
  • deercreekvols
    , contributor
    Comments (5137) | Send Message
     
    I will take the odds at the roulette wheel over penny stocks...
    23 May, 02:41 PM Reply Like
  • Michael Kudrna
    , contributor
    Comments (226) | Send Message
     
    "I like things below three cents, because of the upside potential, and it limits the downside," says penny stock trader Steve Templeton, who recently used his winnings on unlisted medical marijuana stocks to finance a move to Tennessee from California."

     

    Quite possibly the dumbest statement possible and very dangerous if novice investors listen to this clown. I rarely get upset, but this is very dangerous to young traders.

     

    Limit downside? It's called dilution until your holdings are non-existent and/or a shell of a company dies because it never had a chance to begin with. Hopefully he stated all of those risks and SA simply took a small excerpt making SA to blame, but this is an incredibly ignorant statement even with those risks stated upfront.
    23 May, 02:44 PM Reply Like
  • 6012571
    , contributor
    Comments (64) | Send Message
     
    I wouldn't say it's the dumbest, society keeps setting the bar lower and lower every year. I would say I bet the author was "high" when he made that statement. I moved to California from the midwest, and I have to tell you, with the high cost of living, it really does weed out the dumb people. After making poor decision after another that person is now being forced out of California, and will go making these poor choices in Tennessee, which is an odd state because most of those types go to Florida.
    25 May, 07:22 AM Reply Like
  • Emmanuel Nogueira
    , contributor
    Comments (238) | Send Message
     
    "I like things below three cents, because of the upside potential, and it limits the downside".

     

    If you buy a penny stock at $0.03 and it drops to $0.0001, that's a 99.666% loss. Maybe 100% if you can't get a bid. They actually have a name for them: "triple zero" stocks.

     

    So much for limiting the downside...
    23 May, 02:59 PM Reply Like
  • eagle1003
    , contributor
    Comments (1485) | Send Message
     
    I play penny stocks but only after they have already lost at least 90% of their value. Some go to zero but the winners tend to be big and the profits easily cover the losers. The trick is to only buy shares in those that have been bought less than six months ago by the CEO and better yet, the CFO. Forget 10% holder purchases and director buys unless the CEO is buying also.
    23 May, 03:26 PM Reply Like
  • Stephen Aniston
    , contributor
    Comments (2269) | Send Message
     
    Thanks for the tip!
    23 May, 07:25 PM Reply Like
  • wheaton1
    , contributor
    Comments (2) | Send Message
     
    sometime it is dificult to find stocks as listed in your article.
    if not to personal, how do you find these stocks?
    23 May, 07:37 PM Reply Like
  • eagle1003
    , contributor
    Comments (1485) | Send Message
     
    Penny stocks generally go up quickly for six months and then down slowly for three or four years.
    23 May, 03:28 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1797) | Send Message
     
    I like pennies.
    23 May, 03:55 PM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    Did you know the melt value of a penny is roughly twice that of its face value? The last I checked (maybe 2 years ago) the melt value was about 2 cents.

     

    They also make cheap shims.
    23 May, 04:44 PM Reply Like
  • Train2
    , contributor
    Comment (1) | Send Message
     
    Only pre 1982 pennies
    25 May, 06:10 AM Reply Like
  • Joe Lunchbox
    , contributor
    Comments (349) | Send Message
     
    I read the other day that it takes ~2.5 cents to make a penny. Some value, huh?
    26 May, 07:20 PM Reply Like
  • 2XWSOPChamp
    , contributor
    Comments (123) | Send Message
     
    Worst reasons ever for buying a penny stock. Of course, you can lose your entire investment whether the stock trades for $.0003 or $3,000/share.

     

    The reason why penny stocks can be attractive is because of the huge percentage gains/losses in ultra-short time periods. Some of the blue ribbon big caps where once penny stocks. BUT, buyer beware, because pink sheets hardly report/disclose anything, thus making the potential for pump n dumps very high.
    M
    23 May, 04:47 PM Reply Like
  • Nicholas Pardini
    , contributor
    Comments (422) | Send Message
     
    This is a sign of the bubble peaking. Penny stock volume increased rapidly during the top of previous stock bubbles as well.
    23 May, 05:30 PM Reply Like
  • Patent News
    , contributor
    Comments (1312) | Send Message
     
    'the sign of a bubble peaking' so says the short losing again daily lol.

     

    penny stock volume is a tiny tiny percentage of all trades and meaningless as a 'sign'

     

    the economy is doing better so shorts will slowly fade away for a while.
    23 May, 05:58 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (3666) | Send Message
     
    I took my S&P Short off the table.
    23 May, 06:00 PM Reply Like
  • The Delivery Guy
    , contributor
    Comments (131) | Send Message
     
    Actually, and I say this having never shorted a share in my life.... longs laughing at shorts is another sign of a top... (also shorts laughing at longs is a sign of a bottom).

     

    - Goes a little more long every week, but just adjusts the amount set aside as dry powder based on the values in the market.
    23 May, 07:32 PM Reply Like
  • Mark.ca
    , contributor
    Comments (87) | Send Message
     
    "I like things below three cents, because of the upside potential, and it limits the downside,"
    Statement of the year? LOL
    I have read a lot of crazy things but this is....whatever!
    23 May, 07:37 PM Reply Like
  • 2XWSOPChamp
    , contributor
    Comments (123) | Send Message
     
    Agree Mark.ca!
    24 May, 12:17 AM Reply Like
  • grailhunter
    , contributor
    Comments (12) | Send Message
     
    I am pretty confident that the average retail investor with no connections can make money consistently only in pennystocks. The main danger that should be seriously assessed is the risk of halts, which are blatantly random in their nature and primarily used to scare and rob players in order to make this game even more difficult. 7 medical marijuana stocks have been halted so far this year. However with pennystocks you can always make it back, I am not so sure about big board stocks, unless you are a lifetime investor (already a rich person)
    24 May, 12:59 PM Reply Like
  • Joe Lunchbox
    , contributor
    Comments (349) | Send Message
     
    Sometimes these penny stocks are fun to play with, but I wouldn't serious invest in any.
    26 May, 07:21 PM Reply Like
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