In my last post, I touched on the importance of having access to professional penny stock research (check the link at the bottom for the best service) in making money with penny stocks - serious money that is. I would like to expound on this subject because I would like to emphasize some points that I didn't in the last post and because I really think this is the #1 key factor to whether or not most investors are truly successful with penny stocks. If you really want to make good money on a consistent basis buying and selling penny stocks, you really need access to the right information.
I've lost count how many times I've heard essentially the same story. It goes something like this. I "heard about" this hot penny stock that was really supposed to be the next great (fill in the blank) because of (more mumbo jumbo). I had never traded penny stocks before but I just had to try because the (mumbo jumbo) sounded so good. I invested more than I really should have (meaning more than they could afford to lose) and after I bought the stock it seriously tanked. Then I couldn't unload it because everyone else was trying to sell their shares too and I lost essentially all my money. Man, I'll never buy a penny stock again.
Do you see where the logic is flawed in these stories? These guys didn't lose their money because they bought a penny stock! They lost their money because they bought a penny stock for the wrong reasons! "Hearing about" great hot penny stocks is NOT the way to choose profitable penny stocks. Whenever I hear these sorts of stories I always ask, "HOW did you hear about that stock?" Inevitably, the answer comes back that it was some hyped story in a newsletter or other internet source like a forum - or from a friend who "heard about it" from a similar source. It bears repeating: this is NOT the way to pick profitable penny stocks. Please read on...
Penny stocks are like a big barrel of apples. Some apples look all shiny and red and delicious but when you bite into them all you get is sour and milly! Then other apples look all ugly and blotchy and even a little scaly on the skin but when you bite into them they turn out to be pure sweet bliss.
It takes a REAL expert to point out which penny stocks are going to be the sweetest and most profitable. You can not tell from superficial reasoning. It takes in depth research that is more akin to investigative reporting than it is to traditional stock analysis. Penny stock researchers that are truly gifted are able to see past those shiny red apples and pick out the real gems in the barrel - the ugly apples that no one else wants but will make you a very handsome profit. They know that if they go hunting in the bargain bins, like those OTCQB stocks I discussed in my last post, that most, perhaps all, will be worthless BUT they also know exactly what to look for to find those rare incredible deals that no one else is paying any attention to because they don't look like much from the outside. They also know that just because a stock is a highly touted OTCBB stock or a fallen NASDAQ penny stock darling that is being hyped for a comeback, this doesn't make it a great pick - that's all superficial stuff and they know how to dig much deeper.
Real penny stock research experts can look straight through the hype - in fact, hype to them is a red flag. If a penny stock looks too shiny red, that's a signal that it may not be worth what it's being "sold as." These guys are fully aware that companies hire sophisticated PR firms to hype their stocks and they know how to look past all that hype. They know what characteristics they really SHOULD be looking for that will make a penny stock make a substantial movement in the near future - and what factors give a penny stock true value and not just ready to artificially inflate (don't fall into the trap of shorting penny stocks please!).
The most important thing that I have learned in all my experience trading stocks (and I've been at this a long time) is that no matter how good I get at my stock research, there is ALWAYS going to be someone way better than me. In other words, I learned that if I put my ego aside and listen to what the real experts say, I make far more money. I'd rather have a fat pocketbook than a fat ego!
Plus, I've learned that I really don't need to spend the 40-80 hours a week it takes to really keep abreast of all the intricate details of the rapidly changing penny stock world to make incredible money with them - and I don't even want to - I've got a lot on my plate and time is precious!
For the last several years I have concentrated on becoming an expert at picking the very best penny stock research services. I evaluate and test them thoroughly before I put any real money into the picks they are send me. I have learned that the best ones are often from the nerdiest least "professional" sounding services. I have also learned that more expensive does NOT mean better - not even close. In fact, the very best penny stock research service I have found period is one of the least expensive! Yes, that link is the service I'm talking about and the service I recommend to my personal friends and the service I find I make the most from. This is because their picks are so consistent - the picks that most research services send you are up one week and down the next. What I look for is consistently good profit with an incredible out of this world pick every 1-3 months and that is exactly what I get with that service. Check them out for yourself and come back and let me know what you think.
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