I don’t know if anybody noticed before I deleted it, but I got a spam comment on my blog! It was advertising a bunch of sure-to-go-up stocks.
Blah blah blah “hot stock tip”. Plus, if you act now, we’ll throw in with that sure-to-go-sky-high penny stock a free set of Ginsu knives!!
OK, gang. I’m going to say this right now: if you ever, and I mean ever, fall for one of those pink-sheet pieces of dog poop, I formally announce that from this point onward have no sympathy for you. I’ll reserve some sympathy if it happened at some point in the past, but once you’ve read this, you officially Know Better.
There are people who make money on penny stocks, sure. Mostly, they’re the people who put out the gushingly approving press releases on them. “Buy OTC.R.US today! This stock has gotten as high as $15 and will get there again! Lightening always strikes twice! At $0.31, this amazing stock has unlimited upside potential!!”
And then you (and a few hundred other pink sheet receivers) rush out and buy like crazy, and the price goes up to – oooh! ahh! – $0.50! Wow! A 60% gain in, like, two weeks! Holy speculation! It’s going to keep going up! It’s going to…hey…waitasecond, what’s this $0.25 bullshit? $0.20? $0.15?!…how low is this sucker going to go, anyway?!”
The stock market is a place where very bad things can happen to very nice people. Especially if those very nice people are in the habit of trading stocks because they saw a post on a blog somewhere that said it was guaranteed to go up 1,672% in less than a month because the gopher didn’t see a shadow.
Don’t fall for it. Just don’t fall for it. You want to trade in stocks? Learn the game first. Understand how the brokers actually do it. A fairly easy to understand primer is found here at The Motley Fool - but hey, don’t go signing up for any of the $150 a year newsletters right away, OK? I’m serious. I love them, and yes, I am subscribed to one myself and yes, I am making money on some of the stocks recommended therein BUT!!!!!!!!!!!! – you can spend a fortune on newsletters and industry rags and so forth and so on and still lose money in the market if you just blindly rush in and invest because TomG (or Phillip Durell, another big favorite of mine, runs the Inside Value newsletter) (or Bill Mann, who is another of my all-time favorites, posts all over the Fool), recommends something.
You. Must. Understand. The. Game. First.
Without that understanding, you’re relying on your gurus to be smart, gentle, and full of beaming goodwill toward you. Uh-huh. Yeah. Because the stock market is infamous for being a touchy-feeling, let’s all just have a nice group hug kind of place.
Hey, I’ve got a bridge up for sale for a mere $150,000 – you could make that back in a single day, taking $5 per car! Any takers…?
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