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Buying Penny Stocks Without All The Work

Dec 26, 2007
Buying penny stocks is potentially very profitable, but penny stock investing is also filled with risks. Thorough research and evaluation of stocks can greatly reduce the risk, but this process is tedious and requires a considerable investment of time and effort.

A new computerized system has finally been devised that uses cold, hard, mathematical analysis to greatly reduce the risks and increase the profitability of buying penny stocks, while eliminating most of the work involved. As you might have guessed, this technology comes at a rather steep price, but some creative minds have come up with a way to make it accessible to the small investor while making the process of buying penny stocks simple and easy for even the newest of penny stock traders.

Penny stocks have considerable advantages to small investors as compared to other stock investments. The low stock price allows those with small amounts of money to invest to buy shares of multiple stocks and diversify their portfolios much more than they could with higher value stocks. Because even small dollar and cent changes in price can translate to large percentage changes in the price of penny stocks, good profits can be had with relatively low amounts of money invested.

To show the power of penny stock price changes, let's do a comparison. If you wanted to invest $1000 and found a stock you decided to buy at $100 per share, if it increases by $1 per share, you'll have made $10. On the other hand, if you invested $1000 in a penny stock that initially sold at $1 per share and it increases by $1 per share, you'll make $1000!

Because of the percentage of value change that a small dollar value change makes in penny stocks, you can lose money very quickly too. In addition to the inherent risks from normal losses in value, penny stock investing has more than its fair share of scams and fraudulent practices. Companies that issue penny stocks don't have to file financial statements with the SEC (although some do so voluntarily), so it can be very difficult to find the necessary reliable information on a company to do a thorough analysis of the stock.

Penny stock is often sold using hard-sell and shady or outright fraudulent marketing ploys. As unsuspecting investors buy up over-hyped stocks and the stock price rises, the insiders wait until the price reaches its ceiling and then quickly sell off their shares. With the sell-off, the price per share plummets and the investor is left holding worthless stock that never had anything more going for it than a good sales pitch. Investments with potentially high returns over a short period of time do tend to be risky, but in penny stocks the relatively large amounts of fraud increase the risk way beyond what can be attributed to normal market forces.

Until recently, buying penny stocks required a tremendous amount of research and evaluation of stocks to avoid scams and have a decent chance of getting a good return on investment. A prudent penny stock investor might need to spend hours of work just to evaluate one stock. Done right, this work would likely pay off, but the necessary time investment put the high profitability of penny stock investing out of the reach of casual part-time investors.

A couple of computer geeks who also had an in-depth understanding of penny stock investing have recently developed "Marl", which is a computerized bot that can evaluate hundreds of penny stocks in less time than it would take a human to evaluate just one. Unlike human stock-pickers, Marl is 100% cold and calculating - there's no emotion to cloud his judgement. Although even Marl doesn't have a perfect track record, he's a lot better than any human, and Marl can dramatically decrease the risks involved with penny stocks.

Marl has been so effective that he has allowed for huge gains by advanced investors. Because of this, Marl is considered a bargain at the $28,000 licensing fee, but bargain or not, this is well beyond the means of small investors. There is an option to use Marl that is available to investors with even the smallest of budgets though. The guys that developed Marl put out an e-newsletter that gives Marl's top penny stock pick for each week. For new investors, this might be even better than buying the full Marl program, as it narrows down the investment options to just one stock every week, instead of figuring out what to buy out of hundreds of options. With this, even the most novice of penny stock traders can do well with penny stocks.

Marl's inventors have stated that they will be limiting the number of newletter subscribers that they allow, and the subscription option may not be available much longer. For the sake of small investors, hopefully they will reconsider and keep the subscriptions list open. For now though, small investors have a big opportunity for assistance in profitably buying penny stocks.
About the Author
George Best is a small investor from San Antonio, Texas. For more about Marl and penny stock investing, visit buying penny stocks.
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