Penny stocks are any shares that are traded anywhere between a fraction of a penny up to five dollars. Investing in them is riskier than average investments, but with that comes the opportunity for a high potential for reward.  There have been cases where these stocks have gone from a few cents to over $20, and other cases where they have lost all value.

Penny stocks have had a negative connotation to them because of the risk and the lack of information associated with their companies.  Today, it is known among investors that penny stocks represent the many small companies all across the United States that are in the process of growing and have yet to be discovered.

One reason for the appeal for penny stocks is that investors can own a stake of a company and only pay a fraction of the price.   That small investment can later be turned into a fortune.

The downside of these stocks is the risk, instability, and lack of information from the corporation.

While many companies initial go public starting at $10 or more, there are a number of well known companies that started off as penny stocks that are well around and well known today.

As penny stock companies grow over the years, they have the chance to radically climb in price.  This is when people who trade in the penny stocks territory can make huge gains from a small starting investment.

Begin researching penny stock companies and follow them for a few weeks and review their corporate history.  A rule of thumb when dealing with penny stocks is the sooner one gets started, the better.  To begin dealing with investing, one can read online newsletters or find information from an investor professional.  Many times these professionals can assist in helping one to go the right direction for their desired investing purposes.  However, there are a number of these professionals that are being paid to promote certain stocks.  They give a negative connotation t penny stocks and lost money to their investors.  Many times they use pump and dump schemes to take advantage of people looking to invest in these types of stocks.  To defend against one of these types of services make sure that the information they provide neutral and unbiased information.

More often than not, investors put money into penny stocks without fully understanding what they are investing in or how to trade.  In the end, this causes them to lose the money they put in.   Getting involved prior to learning the avoidable dangers will save people from the ‘dangerous’ penny stocks.  Check to make sure that the company you plan to get involved with has positive and strong financials

Good penny stocks companies look the same as any other successful company; the only difference is they are smaller.  They will have a strong and experienced management team, solid numbers, and will be providing a great service or product.  If there isn’t much information available about a company, call and speak to their investor relations representative for additional information.  Compare the company with their competitors along with other investment options that you can look into.

Taking the time to learn about penny stocks, finding good companies, and understanding how to avoid the pitfalls associated with trading penny stocks are some of the steps to help turn initial investments into huge profits.

So the DOW broke 10,600 yesterday and held despite a gloomy day for International markets.  Well, we could ask France evidently about the average cash positions of some HSBC private banking clients to substantiate that there is a considerable amount of Cash on the sidelines.  Again we reiterate our opinion that investing in the US stock market is one of the more attractive opportunities currently.  It could be argued in a myriad of directions, but our economy is gaining de facto strength by the weakness the EU is experiencing and uncertainty in China.  Google will see some beta increase today as China and Google are hashing out issues related to hacking issues traced back to some of China’s “government universities computer departments.”   In keeping with the humorous positioning we have seen many governments take in statements related to “diplomatic issues,” China has neither admitted nor denied wrongdoing and a China minister was quoted, “Hope Google will respect China law…internet will develop in China with or without Google.”  It’s also odd to watch the IMF and Amnesty International line up in Nigeria (after a massacre of 100-500 people this week in ethnic conflict), Congo and Sudan.  All countries that China has invested Billions in with the Sovereign Human Affairs clause “we don’t tell you what to do, you don’t tell us what to do.”  Western Africa is also coming under tighter scrutiny.  The Continent is a powder keg that is becoming a focal point in the international game of Raw Materials…China are like the Borg on Star Trek.  The Borg are an alien race that assimilates everything they come into contact with into a dense matter floating platform.  Again note that 100,000 people have been displaced in Somalia since January while China has pumped more than 10Billion into infrastructure in the Country planning a railroad track across the continent to access the iron ore and other natural resources they can take from the Country.  This is going to come to a head with the IMF and the UN.  They are smart and run everything through dual tax treaty tax havens.  Ironically, the Chinese entrepreneurs are taking after their Western counterpart with the brightest and “most creative” figuring how to even get around full tax exposure between African economies and China.   Cameroon cracks down on journalists.

The BOK intervened in and the Won traded up.  This is a platform for artificial parity with the dollar rally vs. the Euro.  Perhaps Korea is also attempting to pace with the Yuan hikes in China.  China traded down today as there is still concern growing about regional banks and tightening.

UBS is urging the Swiss government to pass what is a quasi dual tax treaty document.  As Obama plans to kick his effort to eliminate offshore tax benefits.  It will be interesting to see how the Swiss government responds.  The recent exposure of HSBC private banking information most likely has the country on edge.  Anyone who plays the game of RISK or has done business in Switzerland knows how seriously they take business.  It is still unclear what stance Switzerland will take thought it seems the US is challenging some very sensitive sovereign issues.  I think that Zurich will go silent for a period until the storm blows over.

Europe is trading up on new relative negative news and a strong day for the DOW.  Most of the EU could use ending the week on a positive note after much uncertainty prevailed throughout the week.  Especially after it is being reported that the European Economy will take 2-3 years to recover.  What does that really mean?  It would seem as if the other (or many) shoe(s) may drop in Europe as Greece, Spain and Portugal continue to remain in serious risk of defaulting no matter how they attempt to sugar coat it.

Sweden today recognized the WW1 Ottoman slaughter of an unknown number of Armenians as genocide. Turkey begged to differ.  Having studied the matter we have an opinion, but the stock market cares little for History.  In fact, its greatest strength and greatest weakness is the inability of the market to learn from historical cycles.  We base much of our trading decisions on current international and national trends in conjunction with various algorithms allowing us to process the information in relation to historical trends.  Of course, disciplined trading is a difficult skill to develop.  Accepting stop loss trading points is essential to long term success as a clear definition of risk tolerance must be associated with any trading model.  It has been said that mathematics can provide the answer to any question. ..it would seem the world could use some answers.

The Stoxx 600 US Index is up on the day.  Sign of futures being up in the US, but that can always change over the hours leading up to the bell.  It will be interesting to see if the Dow can hold 10,600 today to go test 10,750 of if profit taking and the Bears will test 10,500.

On a side note, the Oslo exchange is up 78% over the last 12 months.  The performance is amazing and I can’t even interject pickled herring slight as numbers speak for themselves.  We do think that some of the better performing markets may have reached a bit of resistance and the US and perhaps a few South American Indexes, will be the next to perform.  We must also note that Carlos Slim of Mexico just replaced Bill Gates as the wealthiest man in the word per Forbes at 53.7 Billion.  To accomplish this in a country that manages to have the approximately the 5th highest per capita murder rate notwithstanding current international crisis abroad is nothing short of amazing.  Though if we consider the monopolies of Cemex and Pemex (Cement and Oil/Gas), this enormous growth in wealth makes sense.  We will leave conjecture based on banking activities related to ill-gotten gain from drug trafficking out of our discourse on Mexico.

Penny Stocks and Penny Stock Picks

It is sad to say, but it seems to me that investors trust corporations more than the US government.  Given the choice would you rather invest in politicians by buying bonds that yield next to nothing in return for your investment or invest in Procter and Gamble, GE, Microsoft or even Google?  I know that the government will certainly spend the money on something that may or may not benefit the country.  Financially, we are so overleveraged it is a joke with China owning the majority of our trillion plus dollar debt?  We would certainly be bankrupt if we were a corporation.  Market competition demands that companies hire the best minds to earmark investment for something that will benefit the Company giving it a competitive advantage.  The Company has to make money or its debt load will eventually sink it below the minimum listing requirements of an exchange resulting in bankruptcy.  Not a good investing opportunity.  Investors are looking for hot stocks. Stock market analysis points many directions when looking at the current market in respect to other periods of enormous default on notes.  It’s certain banks will fail, companies will fail and the government will falter.  However, large corporations and agile corporations that have good access to capital in conjunction with a unique business model will flourish. Defensive sectors and the DOW in general as a defensive market for world investments leads me to like the US markets and the Swiss market cause they are above the law with caves full of gold.

So 12,000-15,000 on the DOW between 2011 and 2013 is greatly possible and remember that trading futures is extremely risky.  It should only be attempted by very experienced investors who have filled out the necessary FINRA compliance paper work with their broker dealer in addition to consulting a FINRA Registered Representative before making any investment decision.

For the best daily stock picks and penny stocks visit Speculatingstocks.com and join the stock newsletter.

Okay, back to hot stocks and my daily stock picks.  Well back to South America.  Right now almost every country is showing huge growth as the world needs the non durables that Mexico, Central America and South America are exporting.  The year over year growth in these countries is staggering.  In addition, the average age and buying power is shifting as there is increasing buying power from a younger average demographic and a burgeoning middle class or lower middle class.  Any country exporting to these countries or even investing in some of the foreign markets as securities creates enormous opportunity.  We are involved in exportation to the aforementioned countries and always are asked by our distributors if we can send electronics, recreational items and other durables.  They are so expensive in these countries and limited that there is a huge opportunity for those who are willing to respect the cultural demand of doing business primarily in Spanish, respecting the culture and providing good customer service.  The cell phone business is exploding with just a few carriers providing coverage for potentially millions of subscribers.  These are good companies to invest in as a sector, ADR or direct investment as recommended by your FINRA registered investment advisor.

All tourist businesses are flourishing in these countries as they are incredible destinations.  Having traveled to many of these countries, it is mind boggling how affordable a vacation is.  Casinos, jungles, volcanoes, pristine empty beaches, surf breaks, archeological discoveries of Mayan temples and Inca architectural brilliance, countries embracing foreigners…just a portion of what a couple thousand dollars US will buy you for two.  You can’t spend money even if you try.  5 lobsters, 5 beers and all the fresh fish you can eat will set you back 10 dollars.  3,000 sq foot luxury hotel rooms with your own pool overlooking the ocean will set you back 50 dollars a night.  The only sad note that must be added here is that the relative cost of traveling reflects upon the rampant poverty as the gap between the rich and poor is staggering.
Some of these countries have an average annual income of approximately $2,000.  The strengthening exporting power in these countries is helping this situation a bit in addition to the growing tourist industry, but this disparity is an enormous gap not to be soon narrowed.  Surprisingly, Columbia is now considered one of the safest countries to travel in with Nicaragua being the second fastest growing economy in Central America while sadly Mexico has one of the highest murder rates per capita in the world.  Kidnapping and ransom is another issue in some countries so caution is always recommended while investing or traveling though the most dangerous thing you can do is get behind the wheel in the US with someone texting next to you.  Just a bit of perspective on the warped sense of reality the US media feeds us.

So I’m just going to break it down on investing in the current market from the macro side.  I just spoke to a close friend who returned from Columbia.  Basically everything laid out from an economic analysis of their observations regarding the country further strengthens the stock market trends that we have been observing and reporting in our various stock newsletters.  The fact is that the strongest economies currently are those of exporters.

More specifically exporters of non durables where the country has limited exposure to the primary tidal wave of bank debacles associated with mortgage backed securities and the coming tidal wave of potentially devastating exposure of banks that own the debt from the commercial real estate market.  In the US, the regional banks have been falling like dominos and are either taken over by the FDIC or absorbed by investing groups that plan on creating the next round of debt related exotic securities.  This time the notes are from the billions of bad debt related to commercial property.

It is a simple pattern in the US that has been repeated a number of times.  This is perhaps the most devastating economic crisis the country has ever faced.  Basically the dollar is weak.  Companies in the US laid people off. This in combination with a huge number of loans on residential property handed out like hot cakes to non qualified investors.  Then the trading of this d and f or Omega in reality as my economist friend likes to liken it too, the last letter in a dead language quality wise.  Companies are no longer able to pay their rent.  Retail space has also been built out too quickly and even those buildings and strip malls once considered sure bets for high occupancy rates instead have record rates of available space.  This creates another phenomenon of commercial notes becoming non-performing and the banks are forced to rate it as bad debt.

Now the big four banks are decently positioned with their (our) TARP bailout money and other revenue streams to handle the bad debt on their books.  They have just stopped loaning and are pushing towards opening new accounts and fee based money management.  The huge problem is the billions of commercial real estate debt owned by the regional banks that did not receive any bailout money.  In Southern California, there are many regional banks that fit into this sad reality.  In fact, we’ve had a chance to look over many opportunities for investing in notes from various regional banks.  So investing tip number one, and this is difficult for us to admit as my life has been surrounded by stock picks for more than 15 years, BUY debt on commercial properties.  There are amazing opportunities out there to pick up the debt on commercial properties that are still performing.  Often the debt can be purchased for a 50%-70% discount to face value.  Further negotiations with the current owners of the property can increase that margin significantly as eventual failure and non-performance on the debt is likely and complete ownership will ensue.

SpeculatingStocks.com Releases 3 Scary Good Stock Picks for Halloween

SpeculatingStocks.com has chosen BIDZ, IVN and ATVI as its 3 Scary Good Stock Picks for Halloween and beyond!

October 28, 2008 — SpeculatingStocks.com has released 3 Stock Picks for Halloween and beyond! Begin watching the stock picks below. SpeculatingStocks.com believes they will start moving to the upside this Halloween week.

BIDZ is an online jeweler, somewhat of a niche mini-eBay in the used jewelry space online. SpeculatingStocks.com’s second stock pick, IVN is a small cap, gold penny stock currently in talks with the Mongolian government to receive approval to develop a copper and gold mine in the country. For IVN, approval from the Mongolian government could be a watershed event for them and their partner Rio Tinto. Their third scary good stock pick released is ATVI. Activision Blizzard (ATVI) is positioned for rapid growth through their World of Warcraft, Starcraft and Guitar Hero brands.

SpeculatingStocks.com founder Russ Urban commented, “We believe these stock picks have a great shot at creating significant returns for investors.”

SpeculatingStocks.com Stock Pick: Ivanhoe Mines Ltd. (IVN)

Stock Price: $1.94

Ivanhoe Mines, Ltd., together with its subsidiaries, operates as a mineral exploration and development company. The company holds interests in and conducting operations on mineral resource properties principally located in Central Asia and Australia as well as projects in Mongolia and Kazakhstan.

On September 30th, a company executive from IVN commented that he saw no reason for IVN’s drop. At that time, IVN was trading at $6.40. IVN has been severely oversold and now appears to have finally found a bottom just below the $2.00 level.

Rio Tinto, one of the largest mining companies in the World, is a strategic partner of Ivanhoe Mines. IVN and Rio Tinto are negotiating with Mongolia’s government to develop a copper and gold mine in the country.

They are looking to develop the Oyu Tolgoi copper-gold project in Mongolia’s South Gobi Region. If IVN receives approval by the Mongolian government, we could see IVN shares rebound and correct big to the upside.

We believe gold will rebound and benefit IVN as well.

SpeculatingStocks.com Stock Pick: BIDZ.com, Inc. (BIDZ)

Stock Price: $6.22

BIDZ.com, Inc. is an online jewelry retailer offering its products through a live auction format at Bidz.com as well as a fixed price online retail store at Buyz.com.

BIDZ has been profitable the past several quarters. We believe BIDZ will benefit by people selling their gold jewelry.

BIDZ is currently trading at a market cap of only around $147 million, which we believe is low considering their growing brand and future potential.

BIDZ could see a major short squeeze with over 25% of its 12.12 million float short.

SpeculatingStocks.com Stock Pick: Activision Blizzard, Inc. (ATVI)

Stock Price: $11.69

Activision Blizzard, Inc. operates as an online and console game publisher. Some of the company’s brands include World of Warcraft, Starcraft, Diablo, Guitar Hero and Call of Duty.

We believe ATVI is the #1 gaming stock in the stock market right now with the most future potential in its industry. World of Warcraft is about as big of a money maker as it gets in the gaming industry.

It is speculated that ATVI could be releasing Starcraft II around February or March of 2009. The original Starcraft is still regarded as one of the greatest games of all time and Starcraft II is expected to be a huge money maker as well.

Guitar Hero is very popular with console gamers. Guitar Hero and World of Warcraft create a ton of positive buzz marketing for Activision Blizzard. We believe it will be hard for any other gaming company to compete with ATVI.

ATVI is down at pre-Blizzard merger levels and appears significantly undervalued at a market capitalization of around $15.4 billion.

It is important to find great companies at the right time in their stock charts. We expect the stocks mentioned above to become hot stocks after the recent stock market downturn.