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Buying Penny Stocks The Lazy Investor's Way

Dec 26, 2007
Buying penny stocks, while it can be a lucrative form of investing, carries with it a considerable amount of risk. The risks of penny stock investing can be dramatically reduced by doing your homework on the stocks you are considering buying, but that homework is tedious and time-consuming.

A penny stock picking robot has been developed that provides in-depth statistical analysis of stocks to predict investment returns and in the process greatly reduces the risks and enhances the potential profitability of buying penny stocks while drastically reducing the work involved in choosing stocks. This technology of course comes at a rather high price, but there is a way for even the smallest of penny stock investors to profit from it.

There are some big advantages to penny stock investing. The small price of each stock allows even very small investors to have diversified portfolios. Due to the fact that even a small dollar amount change in the price of the stock can have a major percentage change, it is possible to get much larger returns with penny stocks than with higher value stocks, and such returns can be made with small intial investments.

For example, if you had $1000.00 to invest, and put it into some stock on the S&P 500 list at a purchase price of $100.00 per share, and it went up by $1.00 per share, your $1000 investment would yield $10.00. But, if you purchased $1000.00 worth of a penny stock at a purchase price of $1.00 and it went up by $1.00 per share to $2.00, your $1000 just became $2000 - a yield of $1000!

Now, by the same token, penny stocks can lose a bunch of money very quickly too, which is one reason why it is important to be very careful when buying penny stocks. Another reason that penny stock investing is risky is because of shady or outright fraudulent practices of some individuals involved in marketing and selling penny stocks. Because companies that issue penny stocks are not required to file financial reports with the SEC, it can be difficult to obtain reliable information to really assess 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.

Up until recently, it would take a huge amount of time and work to thoroughly evaluate penny stocks in order to keep away from the scams and to get a decent return on investment. Several hours of research might be needed to evaluate just a single stock. While this work would usually pay off in the long run, it was often simply too time-consuming for 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.

The power of this system is amazing, and it has created vast fortunes for those fortunate enough to be able to afford the up-front $28,000 licensing fee that is charged for Marl. Obviously, this price tag puts Marl out of reach of the small investor, but there is an opportunity for small investors to also benefit from Marl. The inventors of Marl produce an extremely affordable e-newsletter with Marl's top penny stock buy for each week. For new investors interested in buyng penny stocks, this might even be better than having their own license to Marl, as it cuts down the investment choices to just one stock per week, rather than having to choose from hundreds of options. This makes penny stock investing a very simple process for even novice investors.

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 part-time investor from San Antonio, Texas. To learn more about Marl and how he works, please visit buying penny stocks.
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