I know this has nothing to do with penny stocks but I want some opinions before I plunge into this idea.
You know how you get those check from your credit card company that you can use for anything. Well I was thinking of using one of those to max out my card by writing it out for $45,000. Then use the money to buy shares in Microsoft before the November 15th deadline for the $3.00 per share special dividend they are giving out. Then shortly after that I will sell the shares to get my money back and pay off the credit card and then I have a nice $4,500 to $5,000 dollar payoff. Just wanted to see if you guys see any pitfalls.
I realize one is if the PPS drops significantly from when I purchase it to the date of record, I can get screwed but other than that what do you think?
[This message has been edited by Leardron (edited October 04, 2004).]
Posted by justplayin on :
If only it were that easy, we would all do that.
VERY BIG risk for a 10%-15% margin.
If you have big marbles, good luck to you!!
Posted by Leardron on :
quote:Originally posted by justplayin: If only it were that easy, we would all do that.
VERY BIG risk for a 10%-15% margin.
If you have big marbles, good luck to you!!
The way I look at it is I am making 5 grand off of money I don't have. In the end I figure I end up with 5 grand more money than I had if it didn't try this at all. I think it is alot more safe than going into a penny. You are guaranteed a 10 to 15% gain, plus you are investing in a very stable stock.
Posted by justplayin on :
Well, I guess you answered your own question.
Although, I must caution you the $4-5k is not guaranteed. The stock price has already been adjusted in the market for the dividend. It may very well fall $3 once the dividend has been paid.
Good Luck to you.
Posted by tic_toc on :
mmmm. man IMO you are crazy. Its up to you but anything could happen; what if the whole market crashed? Its a big risk to max out a credit card for 45Gs to get 10-15%. suppose it dosnt go as planned; then think of the interest you pay back.
Posted by BT on :
Leardron, I done that exact same thing for 1 specific penny stock, except it wasn't 45k, it was only 5k. The stock went up 25% within 1 week so I sold, paid off the loan amount before they even charged me finance charges for the month. Made a nice $1250 profit before taxes/commission fees of course.
Why Microsoft? Why 45k? Will you be happy with $5k profit in a week? Then take half, invest in a micro or penny stock and make sure you know where the dip is! Also make sure you pull out if your down 4%.
With 45k, I'll turn that into a $5,000 profit in 1 day!
Now the question is beyond that.. Hows your credit? Hows your income incase you can't pay off the minimum balance. Whats the interest rate?
Posted by tic_toc on :
Yeah I'm with BigTIp. If you're after the risk throw 5k at a penny for a week. You should easily get the 25 - 30%
Posted by Love the Market on :
I'm guessing that the card is a credit line tied into your home; a 2nd mortgage. If I'n correct, than you can lose a LOT more than $5000 - you can lose your home.
NEVER say "It can't happen" cuz it CAN - and DOES
Posted by BT on :
Love, I'm 90% sure that they wont. Credit Cards are unsecured debt. The companies cannot go after anything else you own.
Thats why they hate when people file bankruptcy because most likely they won't get paid the full amount.
Ever notice the minimum balance is always extremely low compared to the balance?
The only thing that will happen is your credit will be shot if you don't pay it or possibly sue you for the amount due. But they won't go after your mortgage, house or put a lien on your house.
quote:Originally posted by Love the Market: I'm guessing that the card is a credit line tied into your home; a 2nd mortgage. If I'n correct, than you can lose a LOT more than $5000 - you can lose your home.
NEVER say "It can't happen" cuz it CAN - and DOES
Posted by realityinc21 on :
DON'T GAMBLE WITH MONEY YOU DON'T HAVE!! JMHO
------------------ DIANA
Posted by Clyde Crashcup on :
you're "nutz" if you do it. Good luck either way.
Posted by glassman on :
besides the usual about borrowing to invest, don't you think about 10 trillion other people plan on selling ex-div too???? i might buy some more ex-div if it gets crazy enuff....LOL
[This message has been edited by glassman (edited October 04, 2004).]
Posted by Tigersharks on :
I have to agree with reality, never risk more than you can afford. There is always that chance you could lose your money. Stocks are all gambles, anybody taht says they are not gambles, run away as fast as you can.
Posted by Upside on :
Nuts? Absolutely. I for one though would hold you in pretty high esteem for having the brass to attempt it. If you pulled it off you'd be the stuff of legend around here. Seriously though, I wouldn't try it, especially with that kind of money. Too many things could go wrong.
[This message has been edited by Upside (edited October 04, 2004).]
Posted by tigertony on :
I would'nt do it.Perfect example owned tyco,good company buiding revenue,gonna split into three company's.BAM ceo is a crook,got out at 27.40 from 36.80 at one point all the way below 10.00.Never Know what can happen.IMHO.Good Luck
Posted by tqn on :
IMO, you are nut if you do it. ppl says you should trade with the spare $$ that you can afford to lose. i stick with it alla way.
Posted by BT on :
I did it once and would never do it again! I only did it because my funds were tied and I was 100% sure this stock was at the bottom for that day/week!
Don't take my posts as a "do it" post.
If you want to makes millions, use this strategy and you will succeed. 5yrs is not long!
If you started out with just $5,000 and managed to make only 10% per trade each month, just 10% on 1 trade a month, investing in penny stocks, you could end up with $1.5 Million in just 5 years. http://www.rollercoasterstocks.com/building-investment.html
Posted by DOUBLE L on :
First let me say I am not crazy and have papers to prove it. MY FAVORITE QUOTE "DON'T BE AN OLD MAN SITTING ON THE PORCH WITH NO STORIES TO TELL" another one I like is bet high sleep in the streets.
Posted by DOUBLE L on :
You should have seen their faces when I told them I was cashing out my 401k to buy a penny stock.
Posted by poorman on :
Better read the fine print on the deal with those checks. Often there is a 3% fee for taking a cash advance, That cuts down the money you can make but increases the loss you can take
Posted by will on :
Yes, you're nuts.
Posted by blue_in_MI on :
you're nutz
Posted by cheesehead on :
Sorry---my mistake
[This message has been edited by cheesehead (edited October 04, 2004).]
Posted by glassman on :
you know, this reminds me of something.....
i know of somebody else that does stuff like this........
oh yeah
the US Government...LOL
Posted by Dardadog on :
Yer call. But every damn time I've ever gambled money I couldn't afford to lose........I left with empty pockets. If you can afford the RISK/REWARD of this issue is the only pure question that you should be asking........and you shouldn't be asking us.
------------------ Whoever is first in the field and awaits the coming of the enemy, will be fresh for the fight; whoever is second in the field and has to hasten to battle will arrive exhausted. - Sun Tzu
Dog
Posted by DiQuiRiesco on :
quote:Originally posted by realityinc21: DON'T GAMBLE WITH MONEY YOU DON'T HAVE!! JMHO
Bingo
Posted by realityinc21 on :
quote:Originally posted by DiQuiRiesco: Bingo
RIZ,
I MISS YOU!!
------------------ DIANA
Posted by Leardron on :
Thanks for all the responses. Even though the overwelming response is to don't do it. I didn't see anybody give a really good reason why not. I have thought alot of this through. As far as investing only 5K in pennies and I could make the same money, forget that.
Since June I have done terrible on pennies. I was up over $10,000 on the year at that time having made most off of CMKX and QBID. Sold them and ever since I have seen my account drop to the point I am up nothing for the year. I have lost $10,000 in the market over the last 3 months because in general the pennies have stunk and my luck with them has been terrible. I am neither studied enough nor do I have the time to learn how to read charts and research through tons of info to find a penny that is going to spike. I usually go off what I see people talk about on this board and it hasn't panned out for me.
why $45,000. Because that is my credit limit on my credit card. Second, it isn't a 2nd mortgage or anything like that, just simply a credit card charge. Yes I have the money for the monthly minimum if anything goes completely wrong. 3rd there is only a charge of $75 for processing of the check. 4th if you look at microsofts pps over the last year it doesn't fluctuate much at all and also I disagree that there has already been an increase related to the dividend. I have been watching msft since they annouced this and it spiked to over $30 per share since they announced it but since then it has dropped back down because they announced it like 5 months in advance and most people aren't going to tie up their money for 5 months for as alot of you say an 10% increase. I think it will go up above $30 before the payout but I am planning on getting in at around $27 to $28 pps. The bottom line is that we are not talking about a fly by night company that has a large fluctuation, this is Microsoft. I am probably going to go for it and will let you guys know how it turned out.
[This message has been edited by Leardron (edited October 05, 2004).]
Posted by Kracker on :
You seem to have this well thought out. I personnally wouldn't have the balls to do this, but IF YOU DO, ... I say go for it!! I wish you damn good luck. Please keep us posted. K.
Posted by BT on :
Just by this phrase, I suggest you dont invest in anything at all!
I am neither studied enough nor do I have the time to learn how to read charts and research through tons of info to find a penny that is going to spike.
msft RSI is at 65.8 OVERBOUGHT. If you're going to do it then wait for it to dip back to the 27's.
$28 + 25% = $35.00. $45,000 + 25% = $11,250 profit before commssions, check processing, and taxes. Not bad.
I think this thread should be closed after I say this.
IF YOU WANTED TO DO THIS ALL ALONG, THEN WHY POST IN THE " Micro Penny Stocks, Penny Stocks Under $0.10 " FORUM?
Posted by DOUBLE L on :
Here is what you do. Get cash go to Vegas. Very high limit table. Bet $5,000 if you win leave. If u lose bet 10,000. If you win leave. If you lose bet 15,000 if you win leave you have a 3-1 chance of winning. You make your profit and leave. What are the chances of you losing 3 in a row.I will post another method later.
Posted by glassman on :
quote:Originally posted by glassman: besides the usual about borrowing to invest, don't you think about 10 trillion other people plan on selling ex-div too???? i might buy some more ex-div if it gets crazy enuff....LOL
[This message has been edited by glassman (edited October 04, 2004).]
i think THIS a VERY good reason not to, maybe you din't see it....LOL and GOOD LUCK
Posted by sdrobert on :
DONT DO IT YOU YOU HAVE TO PAY THE SHORT CAPITAL GAINS TAX FOR BEGINNERS AND WHY RISK ALL THAT MONEY. CREDIT CARDS ARENT FREE MONEY AND ITS NOT A GOOD WAY TO LOOK AT IT. I AM OPPOSED TO CREDIT CARDS IN GENERAL. DONT DO IT YOU NOT ONLY RISK LOSING THE MONEY BUT YOU ALSO RISK DESTROYING YOUR CREDIT IF THINGS FALL THROUGH.
Posted by DOUBLE L on :
No short term taxes on table gains?
[This message has been edited by DOUBLE L (edited October 05, 2004).]
[This message has been edited by DOUBLE L (edited October 05, 2004).]
Posted by tic_toc on :
You would do that?? You must have nerves of steel!!
quote:Originally posted by DOUBLE L: Here is what you do. Get cash go to Vegas. Very high limit table. Bet $5,000 if you win leave. If u lose bet 10,000. If you win leave. If you lose bet 15,000 if you win leave you have a 3-1 chance of winning. You make your profit and leave. What are the chances of you losing 3 in a row.I will post another method later.
Posted by DOUBLE L on :
A friend and I tried it once. He sold his harley. We had this great plan to try the method listed above. He lost 13 hands in a row. Needless to say it did not work for him that night. I do o.k playing blackjack using a modified method. Never going over the 4th hand.
Posted by DOUBLE L on :
I have the balls running low on cash for some strange reason. Good luck.
Posted by Leardron on :
I was pretty much set on doing this but wanted to see if someone brought up any possible pitfalls that I hadn't thought of. That was the main reason for posting it here. Everything everyone has brought up I have already thought of. The main reason I brought it up under this thread is this seems to be the only one anyone pays any attention to. I went to the stocks over $5.00 thread and there hasn't been a posting in 3 days. I wanted to get an opinion fast. Thanks for everyone's input. If you want to close this thread go ahead. I got what I needed. I will keep everyone posted after all is said and done. On a side note I was already planning on waiting till it dropped down to around $27 or so. Hopefully it will before November 15th.
Posted by TradingWizard on :
Microsoft stable??? - I know MS dominates the market, but the reliability of the product is poor (patch on top of the patch) - 45K is a high risk, the money you collect on divident will give you a gain, but at the same time you may loose in pps if for some reason things go wrong.
Posted by Leardron on :
quote:Originally posted by TradingWizard: Microsoft stable??? - I know MS dominates the market, but the reliability of the product is poor (patch on top of the patch) - 45K is a high risk, the money you collect on divident will give you a gain, but at the same time you may loose in pps if for some reason things go wrong.
When I say stable I mean it is a heck of alot more stable than a penny stock. for microsoft to take a 10% to 15% dump in a day or two would have to constitute huge negative news whereas a penny can drop 10 to 15 percent in a day just because it feels like it on no news at all.
Posted by chubby on :
Crazy thoughts are for crazy people, and infact those who are crazy are rich or poor. Make your own decision. 45 Grand pumps my adrenaline up. If you have decided, good luck and hope it works for you.
I started my portfolio with 3 grands on a margin account. In 7 months I am up by 23 grand. All with swing trade. Did try penny recently but lost 2 grands in it and so I dont think I will touch it for some time, unless somebody pulls me into it explaining how this penny world works.
My advice is to go brick by brick. Never to jump on one thing. chubby.
Posted by metal1 on :
the stock WILL drop on the ex-div date! it may open up a bit but from the ex-div price but you aren't going to make money from the div play unless the stock goes up right after you buy it and then you should sell it! microsoft is GIVING 45(is that the right amount?) billion dollars away. this money is no longer with the company which is why the stock will drop on the ex-div date. stocks don't always drop the exact amount of the div. sometimes more sometimes less but it will drop. if you want to hold MSFT for a few more months or years it may get that price back. only people that don't know how divs work try to make this play though. it only works when these crappy penny stocks issue stock divs and the price is already so low it can't go down any more, lol
Posted by ChrisNC on :
if your set in your mind at least get a option bigger gains (and you will not need 45000 and can get same monetary gain and the day before dividend short it backwards (may gap down then panic the people playing the dividend game causing it to go even futher down) with what ever you made on the trip forwards. I love risk but play smarter not harder
------------------ Einsteins 8th wonder of the world was the power of multiplication-Buffology lives on in penny land
