The Golden Egg With Penny Stock Newsletters
Trying to find a gold nugget in a pile of heap is a hard thing to do. Just like penny stocks, it takes a lot of hard work to find the real thing than holding on to a pile of straw.
There are two ways of sifting through the mud in penny stock trading: First, is you do the raking yourself to find real gold. Second, is you can have somebody do the work for you, by finding a reliable penny stock newsletter that can help pinpoint where the gold nuggets are.
There are many newsletters that float around in cyberspace. It is surprising to see that a number of them are free. What comes to mind is —how come these are all for free? It takes a lot of work to do research, and the researchers have to be paid to survive.
That is what takes the cake! They are paid alright — by unscrupulous individuals to either pump-up, dump, and do other devious schemes to get you to part with your money.
Everything is a rip-off! These newsletters are paid to outwit the market to move in a certain way, so they can cash in on the gullibility of new investors. We may say that this is a black hat strategy, where you fool the market into a direction and stand to gain by it!
The playing field as far as microcap securities are concerned is now getting more complex with the advent of computerization. You must always be on the guard about the existence of scams, stock dilution, and loss of investment value that are associated with penny stocks.
There are stocks that you can reject off the bat without thinking and would include: companies with less than $10million revenues a year; stocks that are not traded OTC; companies that are recommended via email or through free penny stock subscriptions and; companies that you simply do not like or understand.
Would this imply that only the unscrupulous players make it big in penny stock trading? Nope, not so if you know how to do the math. There are players who see the whole thing as one big slot machine. Good if they win, bad if they do not!
However, if you do not have the kind of money to play around with in wild abandon, then you must know how to play smart. The most important thing is for you to spot the red flags — or companies who have been running a scam, or operating for the sole purpose of raising money through stock dilution.
The second basic rule is to find companies who have been generating earnings through their own operations and do not rely on leverage to pump up their sagging performance.
Other things that you have to know is the need to understand the financial indicators – share prices versus book value per share, lower multiples of debt as against cash flow, and limiting small cap shares to five percent of your total portfolio.
Finding gold nuggets in penny stock trading entail a lot of hard work. Though there are many newsletters that are available in the market, it is still advisable for you to have a basic understanding on what the game plan is all about.
You have to speak the trader’s lingo, know about market share, and make heads and tails of what the technical side is all about, before you jump into trading. This will take much patience and perseverance on your part to find the best and the hottest penny stock from around the stock market’s haven.
Technical evaluation of the stocks is often times the best way of skimming gold from the haystack. If your stock went up 30 to 50 percent, then that is a good thing. Take your profits, and do not be greedy to expect 1000 percent returns. Many neophyte traders have been burned that way. This is the DIY method in microcap trading and it may be worthwhile to keep yourself grounded; and at the same time be aware of the opportunities that come your way.
The evaluation process takes into consideration trade volumes, stock prices, financial ratio analysis, commissions, trading fees, pouring into balance sheets, income statements, earning streams, liquidity, and cash flow analysis among others. By rule of thumb, the hottest penny stock seldom trades over $1.50. Seeing a stock hitting over that can only mean two things: it may just freeze over without movement or it may be on its way down.
Unless you do penny stock trading full time, and is technically-savvy to do all the pencil pushing and market analysis, it would be better to look for opportunities to make things easier. It is another gem to find a reputable penny stock newsletter to help you pick the best and hottest penny stocks around.
It has been bandied about that a newsletter’s reputation can be seen if it is paid or not. A paid penny stock newsletter would not be at the mercy of promoters to keep it in existence. Hence, the analysis would be independent and consistent with what is true and fair. The free newsletters are at the mercy of promoters to stay afloat; hence, may be used to deceive the public that it caters to.
Relying on free penny stock newsletters could end up with you buying pumped up stocks, and lose money in the process. There is no such thing as a free ride on a robust market like penny stock trading. A paid subscription to a reliable newsletter like Penny Stock Whispers with its daily stock alerts can help plow-in the money on the way to your bank!