Penny Stocks daily chat Formerly known as the what are your watching tomorrow thread, this is now the penny stock intrday chat thread. Please be aware that this forum is populated by experienced traders who have been in the market a lot longer than you. If your post contains the words "10 bagger", "unlimited potential", "buy with both hands", "strong buy" or any other type hyped up language, everybody will laugh at you. Rules of posting to this thread: - No linking to external sites - That means NO, you can not link to your magical blog or super amazing #1 stock picking newsletter site. - Penny stocks are not investments, they are trades. If you buy and hold anything here you are stupid - Do not bother trying to pump your penny stock here, go to the Yahoo boards or ihub. - 94% of the time penny stocks rally because they are being promoted, you know this, we know this, so do not pretend that you have an amazing penny stock pick because some magical press release/acquisition/cancer cure will be coming out soon. Check back soon for more rules.
I feel so alone here. Penny stocks are a sure thing for me because I diversify and only buy tickers after I check the financials. I'm pretty ignorant about the financials, even with a bookkeeping certificate, but I avoid (-negs). I gained confidence in penny stocks by creating 5 "fake" portfolios at Yahoo Finance and filled them with different penny stocks to the tune of a Max $500 per company, up to my life savings of $13,500. Then I paper traded for a day, by looking back 3 year's prior in History and put the mid-range selling price 'then' in as the price I "would have likely" paid "Had-I" bought it 3 years ago. And PRESTO! 4 out of 5 portfolios made me double or triple my investment within 3 years. It's a nice, passive, supplemental income for me, just to buy low and hold. It's TOO EASY & TOO SAFE not to do. Because, here are the statistics on average: 60% lost some or all of my $500, but mostly still had some of my $500 left and the LOSER companies were still trying to make me a rich girl someday in the future. Of the 60% losers, 3 ticker symbols disappeared = went out of business and choked down my entire $500 like a pelican with a fish. BUT 3 of my stock companies shot up over $24,000 - long enough for me to cash out (Golden Eggs!). AND WHENEVER I START TO DOUBT MYSELF THAT THIS IS THE WAY IT USUALLY PLAYS OUT - I JUST SPEND THE DAY CREATING ANOTHER FAKE PORTFOLIO OF PENNY STOCKS I SHOULDA WOULDA COULDA BOUGHT 3 YEARS AGO - AND SEE HOW THEY WOULD HAVE DONE BY NOW. Test it for yourself and get happily ever after in your life with my "keep it simple for stupid" strategy. Free Luv from a New Thought Practitioner.
Welcome to the boards! We just launched last week, so this is all fresh and new! Interesting strategy, you are essentially casting a wide net and counting on the gains from the big movers to make up for the losers. "BUT 3 of my stock companies shot up over $24,000 " That definitely saved your portfolio! The question is if these results of catching high flyers like this can be replicated.
Strangely enough though the percentages of wins vs losses is spot on with what I have been taught and through personal experience (60/40) when following my own trading rules (much different then the one above in this thread). But it seems you did have some sort of a plan since the post said avoided negs which I take to mean there had to be at least positive earnings or more assets then liabilities. Most plans if executed without emotion will have 60 percent losing trades but the 40 percent winners will more often then not outperform the 60 percent losers.
You bet, I explained it above. Make 5 "fake" portfolios out of any 27 penny stocks you find (different companies for each portfolio). Pretend you had bought $500 worth of each company's stocks 3 years ago. Now, you can see for yourself how well it usually works. Nowadays, instead of grabbing 27 random=anything goes penny stocks, I try to select finer cuts of beef = companies already showing signs of improvement based on their financials.
Actually I kind of like the sound of the strategy. You are managing risk through position size, following rules to enter into them it's a plan that removes emotion. You should think about once a winner has doubled, sell enough to get your original investment back (that lets you add a new position) and then add a loose trailing stop and let it continue to run. Are you using the less then $5 dollars to determine a penny stock?
JerryM, Thanks for your interest & great advise. Will add doubling out! & Yes, under $5, preferably under $4. I need to learn how to set up a trailing stop tho.
I suspect bailing out of a position at something around -25% to -40% of the position might boost these returns more as opposed to holding it as it flops towards zero. How many of these stocks dropped 40% and came back to break even or better?
Not sure who your broker is but if they allow stop losses you simply set a stop order at a percentage instead of a dollar amount. I also agree with Gil that perhaps on your initial order you could set a stop about 25 to 50 percent below your entry. I would move it to a 15% trailing stop once the stock has gotten to a decent profit level. The trailing stop works by setting a price at whatever percentage you choose when you set it and then moves the exit price up on each day the price goes up to maintain a 15 percent stop. They do not go down however if the stock drops in price and once it drops 15 percent from the last time it was raised it executes.
Non-Margin at Scottrade & TDAmeritrade. Both Gil & Jerry have given, unbeknownst by me, advice on keeping more gains & escaping losers. TY. I found this site in search of fresh penny stocks to sink my tax return into (provided they pass a sniff test = at least positive earnings or more assets then liabilities). Can either of you provide some ticker suggestions?
That is an interesting question based upon your strategy. The usual reason a penny stock comes up on the radar is because its being promoted somewhere. This usually means the dump part of the pump and dump is coming soon, so any kind of long term hold will be a terrible idea. I have a feeling that building a watch list of penny stocks that may have run on news, then fallen back to original price levels is a good start. Then you need to make sure they are not diluting the stock. Actual earnings is a good idea, a real business service or product, and also (this will sound corny, but its true!) check their actual office address on google maps! Make sure its an actual office and not a PO Box in some plaza! So actual office space, earnings, no dilution and news that drives the stock higher? How does that sound for starters?
04/18/16 - Thanks Gil, I was only using 2 of the 4 senses you listed. What is diluting? These Penny Stocks have positive earnings, more assets than liabilities and have turned back up towards their all time highs: ADMT APT CETX EMKR GURE HTM KONE PYDS UWN. Where all can I promote them?
Often these small companies have to sell shares to raise money. They do this by diluting themselves. Take ADMT for example: ADMT Security Details Share Structure Market Value1 $14,071,785 a/o Apr 15, 2016 Authorized Shares 150,000,000 a/o Mar 31, 2015 Outstanding Shares 67,008,502 a/o Aug 14, 2015 They have 150M shares authorized, meaning that is how many shares they can sell to the open market if they wanted. If a company wanted to raise more money, they could increase that number to something stupid like 800,000,000 and proceed to sell it on the open market, driving down the price of the shares. Many small caps tend to do this and its the reason many drop to subpenny levels. If you want to start discussion threads on those companies, you can do it in the penny stock section: http://stockaholics.net/forums/penny-stocks.4/
VWBev, Some comments that come to my mind. 1. On the plus side is that you take the steps you described above and list them out and that is an investment plan for your style of investing and that is a good thing. Investment plans are fluid and can and should be modified to try and improve results. I was quite intrigued with your "system" and have taken it and modified it with some criteria. I went to google finance to use their screener and applied the following: Penny stocks screen Price <4 (under 4 dollar penny stocks) Volume>200000 (want avg 30 day volume at this to be able to liquidate at will with reasonable bid/ask spread EPS >0.00 (putting 0 in the screener eliminates those with negative earnings. I just want to see companies that are at least making a penny per share. Current Ratio =>1 (this ratio is looking at current assets compared to current liabilities. 1 or higher says the company can payoff all current debt with current assets.) 5 year revenue growth >2% (want to see that they are increasing sales at least somewhat to promote growth. Hard to rise in price without it) Took the results and created a $10,000 penny stock portfolio with $600 max position and included transaction costs. Put this portfolio into a shared Google Spreadsheet for you or anyone else to monitor if you want. It pulls in current numbers and updates constantly. I'll keep an eye on it and see how it goes. Added: That is a view only link to the sheet but you can save it to your own google drive and edit/modify at will.
One other thing I wanted to add to this thread for others reading it is that this 3 year experiment you did was done during a pretty good Bull market and may have significant bearing (pun intended) on the results. It may well prove that it follows the indexes when a bear market hits.
Wow! JerryM = great work! I appreciate the attention. I have often gone to use the Yahoo Screener without understanding many the choices for criteria/prerequisites but would still play around with it until I found a flood of stocks. Still had to spend hours going over each because I apparently don't know how to weed out the "baddies" using the screener correctly. So your list of criteria is a Heaven Sent. You found some promising leads I can't wait to sniff out and likely add a few to my expanding portfolio. I feel the bull's nostrils breathing down the back of my neck = it's time to dive in again now!
Try this link: http://www.suredividend.com/ratios-metrics/ Don't try to digest everything in there. Read over the first 27. You will see a lot of these items that can be set in a screen to provide some really good fundamental analysis right away. They help determine health of the company and do not predict price movement. Main caution as you learn this stuff is to not overanalyze.
Ooh! JerryM - saved link to my favorites. That's better than a stack of $50 long, complicated stock books! I went back to my lap top to find the former screen shots of last year's paper studies to prove to Gil nobody needs to FEAR holding penny stocks. This one (shot 08/18/15) shows what investing only $6,500 into 25 different companies, while only putting $250 into each - yields by holding them for 3 years with no stops. Creating "what-if?" portfolios gives me the faith to hold onto my choices without later doubting my decisions and thereby trading out too frequently.
Im too jaded I was a penny stock promoter in the late 90's, way too many bad stories of almost everything being terrible in the long term. But I cant argue with your data! You absolutely nailed some winners, no denying that! What is your secret? Do you have an ebook I can download?
How to "set in a screen to provide some really good fundamental analysis right away"? I just spent 20 hours overanalyzing my top 48. Ready for a "right away" system.
