posted
So I am a newb to investing in these penny stocks. From what I can observe, so much time is spent on DD, selling for losses, worrying about scams, and so forth. But once in awhile, those one or two stocks will break out and make thousands of percent gains.
So my question is..
If you found 20 penny stocks that have the least bit of potential, could you put an even amount in each and basically forget about it and expect a decent profit years later?
Say you put $200 in 20 stocks with PPS under .10 for each. That's $4,000 invested, maybe what someone might start with to speculate.
This is a rough estimate but..
Assuming that 40% completely take a dive ($1,600 loss), 50% don't go anywhere (You keep $2,000) and the remaining 10% goes huge over say...5 years, would it be a feasible strategy? The worst that can happen is that the near-worthless stock becomes in fact...worthless. Minimal losses. The upside is theoretically unlimited. If just 2 of these stocks make it to the $1 mark from .10 or below (the who knows how high from there), you make almost $2,000 on each of those two, adding up to your original investment, then adding to your other holdings.
I have thought about doing this with renewable energy stocks. The industry is still in the infant stage with very few economically sensible products. If though, you invested in 20 of these companies and forgot about it for 5-10 years and let the industry blossom, could you expect a fat check at the end without doing ANY research until then?
This might be a "beating a dead horse" topic but it would eliminate any time spent worrying about DD, taking losses, where the stock is going next, and so on.
I would love to hear criticism on this as it is hard to disprove your own theory. Thanks!
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posted
I would never leave a <.10 stock to sit in an account without watching it weekly at least. Sure penny stocks can run for huge gains, but the probability of them holding those gains are minimal.
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posted
These companies might not exist in a few years.
Some stocks go up 1000% in one day. LFZA did just days ago. You can find stocks that go up 50-100 percent every day, which would equal 1000% in days not years. It's better to observe the market, and when a stock starts to run..then get in. Just don't hold a stock, and hope it will run. It could be diluted or go bankrupt, like many do.
Learn the Penny Stock world before you trade.
Don't invest in Penny Stocks, Trade them.
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