Posts Tagged ‘Earnings’
Penny Stock Winners – What To Do Next
Written by troy on Thursday, April 16, 2009 | No Comments
Categories: Uncategorized Tags: Earnings, Emotions, penny stocks, Stock Investing
When trading penny stocks, once you’ve had a big success, your first thought me be about cashing out in order to enjoy the fruits of your investment. Keep in mind however that taking all the money off the table in the middle of a good deal (such as buying a house or car) may not the best course of action. Of course these are the things you are hoping to buy with your earnings and if you let all of your money ride you risk loosing it all if the stock dives. So what’s an investor to do?
Savvy investors have developed a rather solid strategy of selling a portion (typically half once the stock has increased in value by 100%). This leaves you with the benefit of potential future increases while protecting the value of your initial investment.
If you’ve found another investment that you’re interested in you could take a one third approach. This means leaving one third where it is, cashing out a third, and investing a third in the other stock you are interested in. While each situation is different the method is solid and used by many successful investors, particularly those who invest in the volatile market of penny stocks.
While one big win often leaves you hungry for the taste of another, it may be a good idea to take some time off after a successful trade and before putting your gains back into the market. It is always better to be ruled by reason than emotion, particularly when dealing with money. Investing should be done with reason and rather boring instead of made as the result of emotions and a need for adrenaline.
Vegas has a term for players who are much more risky with their winnings than they tend to be with their own money. It’s called “playing with house money”. The reasoning on the part of the players is that this money wasn’t their money to begin with and it’s no big loss. These players are also often less upset once they’ve lost it all.
This mentality often takes over with stock market investing. Rather than seeing that money as theirs, investors see it as house money they can play with and are willing to take investments that they would have otherwise passed on in hopes of another big win. Rather than relying on the pain staking hours of research and agonizing over the decision to purchase for your last win, you invest foolishly and loose it all. Taking a little time in between investments is often a good strategy for keeping your head in the game and money in your pocket.
Cashing out after a big rush on a stock is also a good idea. Especially if you are confident in the potential of that stock, this allows you to sell your stock then buy back after the initial rush when prices have gone down. Most of the time you can buy it for far less than you sold it.
There’s only one thing that is worse than selling too early when investing in stocks and that is selling too late. Do not try to pick the absolute top and sell at that price. It is much better to sell on the way up, than on the way down and it is nearly impossible to predict at exactly which point stocks will peak. Have a cut off point, once you’ve reached that point and made an acceptable profit, then it’s time to sell. Don’t look back at what you didn’t make either, be content with you much you’ve made and move on to the next stock. If you begin obsessing over every penny you could have made, perhaps this is not the best investment option for you. If you can walk away clean you can enjoy the exhilaration of the greatest game on earth.
By: Christopher Smith
About the Author:
Savvy investors have developed a rather solid strategy of selling a portion (typically half once the stock has increased in value by 100%). This leaves you with the benefit of potential future increases while protecting the value of your initial investment.
If you’ve found another investment that you’re interested in you could take a one third approach. This means leaving one third where it is, cashing out a third, and investing a third in the other stock you are interested in. While each situation is different the method is solid and used by many successful investors, particularly those who invest in the volatile market of penny stocks.
While one big win often leaves you hungry for the taste of another, it may be a good idea to take some time off after a successful trade and before putting your gains back into the market. It is always better to be ruled by reason than emotion, particularly when dealing with money. Investing should be done with reason and rather boring instead of made as the result of emotions and a need for adrenaline.
Vegas has a term for players who are much more risky with their winnings than they tend to be with their own money. It’s called “playing with house money”. The reasoning on the part of the players is that this money wasn’t their money to begin with and it’s no big loss. These players are also often less upset once they’ve lost it all.
This mentality often takes over with stock market investing. Rather than seeing that money as theirs, investors see it as house money they can play with and are willing to take investments that they would have otherwise passed on in hopes of another big win. Rather than relying on the pain staking hours of research and agonizing over the decision to purchase for your last win, you invest foolishly and loose it all. Taking a little time in between investments is often a good strategy for keeping your head in the game and money in your pocket.
Cashing out after a big rush on a stock is also a good idea. Especially if you are confident in the potential of that stock, this allows you to sell your stock then buy back after the initial rush when prices have gone down. Most of the time you can buy it for far less than you sold it.
There’s only one thing that is worse than selling too early when investing in stocks and that is selling too late. Do not try to pick the absolute top and sell at that price. It is much better to sell on the way up, than on the way down and it is nearly impossible to predict at exactly which point stocks will peak. Have a cut off point, once you’ve reached that point and made an acceptable profit, then it’s time to sell. Don’t look back at what you didn’t make either, be content with you much you’ve made and move on to the next stock. If you begin obsessing over every penny you could have made, perhaps this is not the best investment option for you. If you can walk away clean you can enjoy the exhilaration of the greatest game on earth.
By: Christopher Smith
About the Author:
Interested in “buying penny stocks? Find out the best way to invest in penny stocks to avoid losing your money. VIsit http://www.1source4stocks.com
Investigating Penny Stocks Financials
Written by troy on Saturday, April 11, 2009 | No Comments
Categories: Uncategorized Tags: Developing New Products, Earnings, Investment, Investors, Moneymaking
Despite its derogatory connotation, penny stocks have big potential for moneymaking if you do it right. This is not the kind of stock that you would easily decide to purchase, just because somebody told you to do so. Penny stocks are very tempting because the share prices are lower than in the major stock exchanges. However, the risks are higher and the market is more volatile.
Although information on the companies selling penny stocks is harder to come by than those on the big boards, if you do your research right and make sure the company is legitimate and investment-worthy, you can make money trading penny stocks.
Check the company’s revenue. A company’s revenue shows how much it is earning. Many companies that decide to go public for the first time start off by trading their shares on the OTCBBs as penny stocks. If the company is a startup that decided to go public right away, the low revenue would be a matter of course. Another reason for low revenues would be that it is developing new products that have a huge impact on its revenue. Be wary of companies that have been around for a while and yet have little or now revenue something is likely to be wrong with the company. A company’s growth should be matched by increasing revenue.
Check the company’s earnings. This refers to the company’s profits. All companies want to make money and as revenues exceed expenses, there would be earnings. Companies that show profits, have a good cash position, or are heavily funded by external sources are good candidates for penny stocks investment.
Check the company’s debt. Many companies in the development and early growth stages usually start with big debts. This is usually due to interest payments that the company has to make. The debt is minimized when the company starts earning, offers shares of stock, or gives significant control to its investors. A company with a huge amount of debt may not be a good investment, unless it has an outstanding product that will allow it to earn well.
Check the company’s assets. A company’s assets would include the cash, physical property, and inventory that can be turned to money and for which a monetary value is assigned. The more assets a company has in comparison with its operational expenses, the better the picture is. Miscellaneous assets that can be sold to raise capital are also good. You will need to check to make sure that these are really assets and not liabilities.
Check the company’s liabilities. A company that has low liabilities in comparison with its assets is a good candidate for penny stocks investment. Ideally, the ratio should be 1:2 of assets over liabilities. This would allow the company to have enough breathing room through its growing pains and in case of emergencies.
Information about the company’s financials is important to enable you to make a fairly good judgment about whether its penny stocks are worth investing in. A company’s surface picture may be rosy until you start digging in to discover the hidden side. Unless you are able to get enough information, hold back and either do more research, or find another penny stocks company that is a worthwhile investment. Don’t invest your lifetime savings until you are sure you know enough about what you are buying.
By: Nir Dotan
About the Author:
Although information on the companies selling penny stocks is harder to come by than those on the big boards, if you do your research right and make sure the company is legitimate and investment-worthy, you can make money trading penny stocks.
Check the company’s revenue. A company’s revenue shows how much it is earning. Many companies that decide to go public for the first time start off by trading their shares on the OTCBBs as penny stocks. If the company is a startup that decided to go public right away, the low revenue would be a matter of course. Another reason for low revenues would be that it is developing new products that have a huge impact on its revenue. Be wary of companies that have been around for a while and yet have little or now revenue something is likely to be wrong with the company. A company’s growth should be matched by increasing revenue.
Check the company’s earnings. This refers to the company’s profits. All companies want to make money and as revenues exceed expenses, there would be earnings. Companies that show profits, have a good cash position, or are heavily funded by external sources are good candidates for penny stocks investment.
Check the company’s debt. Many companies in the development and early growth stages usually start with big debts. This is usually due to interest payments that the company has to make. The debt is minimized when the company starts earning, offers shares of stock, or gives significant control to its investors. A company with a huge amount of debt may not be a good investment, unless it has an outstanding product that will allow it to earn well.
Check the company’s assets. A company’s assets would include the cash, physical property, and inventory that can be turned to money and for which a monetary value is assigned. The more assets a company has in comparison with its operational expenses, the better the picture is. Miscellaneous assets that can be sold to raise capital are also good. You will need to check to make sure that these are really assets and not liabilities.
Check the company’s liabilities. A company that has low liabilities in comparison with its assets is a good candidate for penny stocks investment. Ideally, the ratio should be 1:2 of assets over liabilities. This would allow the company to have enough breathing room through its growing pains and in case of emergencies.
Information about the company’s financials is important to enable you to make a fairly good judgment about whether its penny stocks are worth investing in. A company’s surface picture may be rosy until you start digging in to discover the hidden side. Unless you are able to get enough information, hold back and either do more research, or find another penny stocks company that is a worthwhile investment. Don’t invest your lifetime savings until you are sure you know enough about what you are buying.
By: Nir Dotan
About the Author:
Nir Dotan is a writer and promoter of
Penny Stocks
services, and
Penny Stocks Preferred source for the latest news and information on the best and brightest Small Cap Stocks.