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Penny Stock
Tips
Disclaimer
� Stock speculation is very risky
� Do not trade with more than you can afford to
lose.
� Seek professional investment advice.
� This is not investment advice.
� No warranties, you are on your own.
Penny Stock Tips
� Penny Stocks are ultra-hazardous
� There are many scams in penny stocks
� Small stocks are easier to manipulate
– They are easy prey for short sellers
� See my video “Anatomy of a REAL Pump and
Dump” on YouTube.com
� Penny stocks need promotion to move them
Penny Stock Companies
� Penny stock managements usually put the
investor first – right after their own wallets
� They may pay themselves big salaries and perks
� They may raise money by using massive dilution
– Dilution is selling stock below its value
– This reduces the value of your stock
� They may dump their own stock on the market
Penny Stock Companies
� Penny stock companies may also crush your
stock value by making ruinous reverse splits
� Penny stock managements may simply abandon
the company
What to Look For
� Look first for value
� Find stocks selling below book value
– This may be impossible if information is missing
� Look for low market capitalizations
� Look for insider buying
� Look for preparations for development
– reorganizations
What to Look For
� If you have found value, then look for possible
excitement
� Get out your crystal ball – what will happen?
– Anticipate and predict
– Call the company
� Is the company doing research, coming out with a
new product, looking for a deal?
How Stocks Move
� Stocks move in a pattern of accumulation –
markup – distribution
� You want to buy when the stock is being
accumulated for an up move
� Buy with the smart money
� Avoid chasing price – look for good cheap buys
� Penny stocks often have huge swings =
momentum
Look at the Chart
� Look for stocks with low market values
� Look for stocks moving sideways in patterns that
suggest they are being accumulated
� Watch for upside breakouts
Do Not Chase Price
� Do not chase price
� Penny stocks can turn on a dime
� Do not get carried away by news
� Avoid stocks being hyped
� Avoid spam stocks
When to Sell
� Sell too soon
� Sell at the first sign an uptrend is broken
� Do not ask why
� You will find out six weeks later when the price is
down significantly – too late to sell
� Do not average down in a penny stock!
� Live to trade another day
Biggest Tip
� Keep learning more
� Professional traders stay on top of their game
– They study everything out there
– They know the right information is worth tons
� Learn from your mistakes and your profits
Subscribe
� Subscribe to these videos and my
blog:
� www. inesting-performance.com
Learn more from books – Amazon.com
� How to Find a Home Run Stock
� How to Pick Hot Reverse Merger Penny
Stocks
� How the Shorts Raid Your Stock,
Destroy Your Company and What to Do
About It
Get More Tips
� Subscribe to my blog for stock pics
– www. investing-performance.com
Read my blogs and my books are on Amazon.com
– How to Find a Home Run Stock
– How to Pick Hot Reverse Merger Penny Stocks
– How the Shorts Raid Your Stock, Destroy Your Company and What to Do About it
Subscribe to my videos
Copyright ©John Lux 2011
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