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Subject0:
Penny Stocks � Greed is not Always Good
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Date: 20 Apr 2007
Time: 06:25:18 +1100
Remote Name: 91.124.203.182
Penny Stocks � Greed is not Always Good
by: John Whitefoot
i
I received an email last Friday from pennypic.com, the free penny stock
newsletter I subscribe to. I was quite excited too because they kindly told me
to �enjoy and relax on you're (sic) long weekend, because we have a major
MONSTER announcement coming Mid Week��
Then on Monday, I received another email reminding me to �be prepared� because
they were announcing their next pick on Tuesday. I waited around Tuesday evening
to find out what the next dead-in-the-water penny stock company they were being
paid to hock was.
They stood me up. And continue to. Some penny stock newsletters don�t seem to
care about their subscribers. Perhaps those at pennypic.com graduated from the
Gordon Gekko - �Greed is good� � School of Business?
Still, if there�s one thing online investing newsletters like pennypic.com (and
others) do, it�s illustrate the need for both ethical and honest research� and
the need for penny stock investors to be aware of what they�re actually
investing in.
It�s tough for companies like pennypic.com to claim they offer decent research
when the fine print tells you that they are �often� compensated for issuing
penny stock profiles; more often than not, in stock of said company. That�s not
the sort of information you should hide in the fine print.
Not only that, they can sell those stocks whenever they see fit. That could very
well mean the morning after they send out their promotional copy touting a dead
penny stock. For the record, I have yet to see a penny stock they�ve hyped where
they haven�t been compensated.
I think the more upfront a penny stock newsletter (or anyone for that matter) is
with their intentions, the more trustworthy they are. My cable company called
this week wanting me to sign on for another two year contract. If I agreed, they
would give me a $60 credit. But what if I decide I want to cancel my account
before the two years are up, I asked. The customer service rep said I�d �only be
fined $200.�
Tell people what they�re getting up front and the deal they�re selling might not
sound like a deal after all. But then again, maybe that�s what pennypic.com and
the cable company are going for?
For my money, I want to be shown penny stock companies that are fundamentally
sound with potential. I don�t need to learn about a penny stock with a daily
trading volume of 225 that no one has heard of. If investors haven�t heard of
them, there�s a reason. I want a penny stock with legs, not someone propping up
a dead cat bounce.
For example, my friends at pennypic.com (who were paid 250,000 shares in said
company) selected MCTH two weeks ago. Before their press release the shares were
trading near $0.26; after their hyped profile it soared to $1.96. Since then it
has dwindled back to a precarious ridge near $0.50 with significantly decreasing
interest.
If I had followed the advice of pennypic.com and invested in this company, 2
weeks later I might want to ask the brains behind the newsletter why they
thought this was a penny stock worth unveiling to their subscribers.
I�d also like a little disclosure. Since you aren�t unbiased, I would love to
know how much you (potentially) made off your subscribers. Or at the very least,
I�d like to know when the pennypic.com team sold their 250,000 shares. Are they
still holding shares in the company because they believe it has a future�or did
they dump them the day after their promotional piece went out?
Again, for my money, I want a penny stock newsletter that is 100% unbiased�and
one that profiles companies that, 2 weeks after the profile, are still viable. I
also don�t need my penny stock companies to be undiscovered gems. I�m happy with
a juggernaut that�s fallen on hard times.
http://www.PeterLeeds.com profiled Ford Motor Company on March 5 when it was
trading at $1.87; on May 7, it hit an intra-day high of $6.54. That�s a 2 month
gain of approximately 250%. As far as I know Ford Motor Company is still
generating interest.
On January 6, PeterLeeds.com profiled Misonix, Inc. (MSON - Nasdaq) when it was
trading at $0.95. Since then the company's share price has climbed 209%. 6
months later, MSON continues to have great momentum.
Granted, none of the penny stocks selected by PeterLeeds.com soared 650% like
the pennypic.com pick did. Nor have they plummeted by the same margin. On the
other hand, you could interpret it by saying, PeterLeeds.com didn�t make 650%
off its subscribers� hard earned dollars.
As one online commercial I was watching noted, "If you don't understand the
numbers, the risk goes up." And perhaps more importantly, "It's the people
behind the risk you have to be cognizant of."
While greed may have been good in the high flying 1980s�I think penny stock
investors have since learned that you can still make money without trouncing on
others. Or maybe not. We�ll find out when Gordon Gekko, in the sequel to Wall
Street, hits cinemas.
About The Author
John Whitefoot is a seasoned penny stock investor with a keen interest in
international business and current affairs. As Sr. Editor of http://www.peterleeds.com,
John Whitefoot is devoted to uncovering the news, trends, and ideas that affect
penny stocks on a daily basis.
Visit the author's web site at:
http://www.peterleeds.com
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