Owl said:
(Isn't that like thinking that "a pound of bricks" weighs more than "a pound of feathers"?)
We all know that they weigh the same but I bet the brick hurts more when you drop it on your foot...hopefully that settles it.
Forum > Low priced stocks
Displaying entries 21 - 29 of 29 forum posts in total
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Posted November 08, 2009 (03:01PM)
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Posted November 08, 2009 (10:51PM)
I would suppose the trick is figuring out what is low priced, as will move up after you buy it, pretty simple but elusive at times.
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Posted November 09, 2009 (08:24AM)
Those who know my investment style know I have no business posting to this thread, but in my wanton youth I had some fancy for the mighty brought low thinking “Aha, there must be value here!” Let me say you can say that for a long, long, long time, before you are redeemed. Buying the low priced stock, in the belief that it’s misperceived value will soon be revealed, is a fool’s errand. I bought OXY in 1990 and held it for 14 years, eventually selling it for almost 4 times the initial value. But for the first 10 years in was seriously underwater. I used a DRIP starting in 1993, and the additional shares at deep discount and compounding helped greatly to boost the final return. I held on so long because I thought that the shares were mispriced and there was value to be realized, but in hindsight there was much better uses to put the investment through the 90’s. I know OXY was not a ‘penny’ even at its worst, but it seemed so to me when its value had shrunk. These present pennies such as FNM, AIG are far more precarious than OXY because they could easily announce bankruptcy over some weekend, where OXY just suffered from years of mismanagement. I realize that there are those, such as Coffee, who have some greater skill at picking pennies, but I think most would do better buying actual lottery tickets. |
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Posted November 09, 2009 (09:00AM)
I have taken an excerpt from the ONTY message board (posted by avatar "hewmanbing"); slightly rephrased it… and have come to this drawn my conclusion for small caps as follows…
What I prefer is to find stocks that I think has a good chance of long-term spectacular success based on their fundamentals; then try to reap as much as I can of the total future price gain while minimizing the cumulative time that I'm holding the stock and exposing myself to the very high risks of unanticipated negative news. My rule was violated when I held HEB far to long and failed to capitalize on my gains; and held beyond a time of announcement on a failed opportunity |
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Posted November 09, 2009 (09:38AM)
I think if you look at it that way, the brick would be the penny stocks, because they can fall a heck of a lot faster then a microsoft or a disney would. Hence the volatile nature. Otherwise, I really don't see the relevance. (i know in a vacuum they fall at the same speed, but that isn't the real world) |
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Posted November 09, 2009 (09:43AM)
interesting point, seems to be the absolute opposite of conventional wisdom that "buy and hold" is less risky. But the poster does have a bit of a point. I think you need to have the experience and the technical expertise to notice when these upticks will occur, and must be much more dilligent on watching those stocks on an hourly basis. very interesting |
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Posted November 09, 2009 (11:39AM)
Dear Otter, I hope that you will acknowledge that the
investment style you outline, i.e., identifying a small cap with the chance of
an immanent pop and buying and selling to capture a substantial portion of
same, requires a bit more skill than ‘conventional buy and hold’. Both styles
require an identification process which seems to require an equal amount of
diligence. However, one style
requires the timing to be of a rather precise nature, and the other is much
more open ended, in fact, is ‘benefited’ by poor timing if one uses a DRIP. Certainly some people are gifted
timers, yet we frequently read on these very pages of those who brought wrong,
or at the wrong time, or sold wrong.
You quote one who did. Who
wouldn’t gladly accept half of the “rises of 150%, 400% and 250%”, but when
they sell the lottery on TV, I’ve noticed that they never tell you what your
odds of winning are.
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Posted November 09, 2009 (12:09PM)
I believe the type of investing that I will be utilizing will be Swing Trades with Known Pharma that has a catalyst (potential) yet will not risk on the final outcome of a decision. The catalyst is... known successful phase 3 trials... Pipeline with at least 3 other phases with shown demonstration to exit Phase 1 and 2 with positives... Limited or no Terminated Trials.... Recent offering of additional stock... after positive news... |
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Posted November 09, 2009 (12:48PM)
The irony being that I'm not quite as conservative in my approach as you are, I do make the occasion lottery ticket bet for thrills, I completely agree, even though I usually come out green on my spec bets, I never make a boatload of money because I generally get out while the gettin's good, just like a $100 lottery ticket, maybe buy one more ticket, but pocket the rest and know you beat the odds. Newcomers seldom understand the frailties of smallcaps and especially penny stocks, I had the "privilege" of watching my former boss/friend make massive gains back in early 2000, he floated around the office for months, high on life that he'd been able to turn $15K into $35K. He did this reading up on speculative companies in fiber optics, dot coms and several other breakthrough technologies....I distinctly recall him on the phone with his broker who was telling him his lucky "instinct" was going to run out as she'd try to dissuade him from his picks.. I also noticed he had started to adopt an assumption tone with regard to future gains, he also got even more zealous in buying based on his instincts. Later that year he was down to $5K, I had started working another job but stayed in touch with him through the years. I called him about a month ago to see how well he'd been doing in this rally, he said he got out back in 2000 and will never again put money on the stock market. He went from one extreme to the other, or as Cramer puts it "Bulls make money, bears make money...hogs get slaughtered" |
Displaying entries 21 - 29 of 29 forum posts in total
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