No doubt that penny stocks have a bad reputation. Speculating on penny stocks can be exciting, but in reality it is just another form of gambling at the craps table. While it could be argued that all investing is a form of speculation, in the penny stock world this is undoubtedly true.
All these penny companies is littered with scams, pump and dumps, and outright frauds. Swindlers prey on inexperienced investor’s greed and desire for quick profits by making outrageous claims about tiny companies and suggesting that a small investment will turn into an enormous windfall.
Of course, this is almost never happens. In fact, the opposite is normally true and investors end up losing their under wears. These penny stocks are risky – not just because of its dominance of pump and dumps and frauds, but also the shaky financial footing of most of the companies.
Many penny stocks are actually legitimate businesses, but they are almost always under-capitalized an not very successful in their industry. If they were industry leaders, they wouldn’t be penny stocks!
The other type of penny stock that investors may be familiar with is the formerly successful company that has come on hard times. This is not uncommon. Often, the market expects that these companies are heading for bankruptcy (and sometimes they are) and prices the stock accordingly. Most of the time these aren’t great investments either, but once in a while they can produce staggering gains.
While penny stocks have a bad reputation, all of the risk does not come without the potential for massive reward – even if it is rare. Here, we highlight few of the penny stocks that at one time traded below RM0.100 but have subsequently exploded higher making investors a boatload of cold hard cash.
Investors should take note on ALL the following penny stocks as they NO LONGER serve as a buy call anymore. Any surge in price is merely a technical rebound only. Christmas happens once in a year and it is more advisable for the investors to search for other penny stocks with the same potential gain. Trade with care and always learn how to CUT LOSS! CUT LOSS! and CUT LOSS! Happy Speculating!