Hi, I have read a lot about penny stocks and pump and dump scams. But I have a question, is it a viable strategy to get in early on a pump and dump scam and "ride it" until you make a profit and sell. I don't see it being illegal as you are not the one promoting it, just investing in it.
Thank you.
Hi, I have read a lot about penny stocks and pump and dump scams. But I have a question, is it a viable strategy to get in early on a pump and dump scam and "ride it" until you make a profit and sell. I don't see it being illegal as you are not the one promoting it, just investing in it.
Thank you.
.compound interest (is) the most powerful force in the universe
If you are looking for that adrenalin rush aka gambling, why not trade the major news in Forex? You either make or lose lots of $$ in seconds. Every so often a Penny stock will turn to that multi bager that you read in the media and it is that dream that keeps sucking punters into this sector.
I think penny's keep the dream alive. If you do the research at least there is a chance of decent payday. I personally invest only very small amounts on penny's but like to feel I have at least something in the game. The quality of the directors is another major consideration for me.
I see it all the time, "quality of the directors"
Mere mortals like me, cannot hope to know anything about that.
We can read/research such matters.
Truth is some of they lie about themselves,
each other and the state of the books/company.
It's a lottery.
Disclosure: I hold a lot_o'_lottery tickets!
If you take the time to do the work, you will find directors clump together into little clubs. Those little clubs produce investment returns. Some clubs are high quality and tend to produce better returns. Some are rubbish. This has been seen to persist...that is, it has predictive value. There is a move on in the corporate governance arena to rank these people. The data has already been compiled.
Watch their feet. Quality is defined as those who create value for shareholders. Check who's company they keep. You can do it if you want. It's well within your reach.
Not sure if those can be shorted (the dump side...) in Oz but that's how Tim Sykes made his cash in US. I guess it's easier to find'em that way... Not something i do, futures are easier to go short with...
I agree completely that quality is defined by the value that the board creates for shareholders. We investors are generally mercenary by nature and driven only by greed. (no offense to the few that don't fit this description).
When I say quality of the directors I am not talking about how nice they are to stray puppies. I only want a track record of delivering success to the business's they have helped to guide. This can be researched to some degree.
I don't know of any Australian penny stocks that can legally be short-sold.
Hi Pixel
I am not aware that there was a restriction. Are you referring more to the fact that borrow is hard to source rather than that this may be due to some regulatory restriction?
Shorting penny stocks is systematically profitable (lottery effect is a key reason, but there are more - some associated with the difficulty of obtaining stock borrow and or lack of permission to short sell for mandate specific reasons where intermediation by a fund manger is a feature). However, that's before allowance for borrowing costs which are likely to be elevated.
Due to the fall in the AUD
Some opportunity about.
List of officially shortable stocks: http://www.asx.com.au/data/shortsell.txt
Seems I haven't been looking at this list for some time. It does contain more penny stocks than I thought.
Time to brush up and check the list of my penny stocks against the shorted totals :frown:
Not sure if those can be shorted (the dump side...) in Oz but that's how Tim Sykes made his cash in US. I guess it's easier to find'em that way... Not something i do, futures are easier to go short with...
I want to download Tim's videos from a torrent site, learn the system and give it a go with US penny stocks. From what I heard his alert system isn't very useful as its hard to find inventory to short and the longs have already taken off by the time you log in to buy them. Can anyone comment?
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