Decimal Points

[SARGE]

Researching penny stocks to invest in, I can't figure out decimal points. Is almost embarrassing to ask, but how much is 0.0032 or 0.0001?

[glc]

If it's $0.0032, that's 32/100ths of a cent - 0.32 cents, roughly 3 shares for a penny.

$0.0001 = 0.01 cents - 1/100th of a cent, 100 shares for a penny.

[SARGE]

So for $1.00, I can get 10,000 shares of this for example?

http://finance.yahoo.com/q?s=UNDT.OB

Just imagine what Apple or Google began at and you had bought 10,000 shares or more.

[David M]

Sarge, think in terms of dollars, not pennies.

5.0032 is the same as five dollars plus .32 of a cent.

The conversion between dollars and pennies is just a matter of moving the decimal point over two places.


BTW, you are playing with fire if you are thinking of trading penny stocks, micro caps or nano caps.

OTC or what are called "Pink Sheet" securities do not have to meet the same scrutiny with their financial statements as do listed securities. They are not even required to list with the SEC meaning their Balance Sheet, Cash Flow and Income Statements can be kept private and/or unaudited. Being able to review these three statements that have been audited is critical before investing.

The pink sheets are where the crooks go to "pump and dump"....usually leaving people with a whole lot less money than they started out with.

It's fine to invest with "mad money" where if you lose it all it will not affect you financially. But for the vast majority of the time that you bet long, you are going to lose.

Many legitimate companies start out in the pink sheets but then most companies do not consider listing themselves before they are large enough to where they can list themselves with the SEC. Listing in the pink sheets pretty much means you are desperate for investment capital either because nobody sees your business as having a good business model, meaning the venture capitalists and individual private have already blown you off.

Here is how a pump and dump scheme works. A few wealthy people get together and look for a good candidate to buy from. They start buying shares very slowly so they do not run the price up. They are companies with very low trade volumes and numbers of shares. After these people get done buying, they start rumors on the internet that this company has some amazing patent or some sort of new technology that is going to make the company go gangbusters. After other people start buying in and the price starts shooting skyward, the people who started the rumors start selling into the buying craziness. Sometimes the price can be 20, 30, 40 or more times their original buying price. And guess who gets screwed? The people who bought on rumor and internet gossip.

If you catch the run REALLY early, you might stand to make some money. But the chances of finding the run really early is next to nothing. The rumors start first.

For serious stock investing where it does matter if you lose money, stay with healthy, large cap and mid cap leaders in their sectors. Healthy means they make money and they have growth. Start your search by looking for companies with PEG ratios under 1.

Google Finance has a search engine for stocks where you can list hundreds of different parameters to search by. Google Finance: Stock market quotes, news, currency conversions & more

You can also set up a portfolio in Google Finance so you can track your portfolio in near real time. Google Finance: Stock market quotes, news, currency conversions & more

The Map of the Market shows the largest publicly traded companies and their sectors.
Map of the Market - SmartMoney.com

[SARGE]

Thanks. I research alot and can't understand why a company like UNDT isn't doing better even with Army contracts plus an app coming out for smartphones where I guess you can walk around your house and check for bugs. I do get a laugh when I see this one though. Maybe a good investment for baby boomers.

MJNA.PK: Summary for MEDICAL MARIJUANA, I- Yahoo! Finance

[David M]

UNDT has a negative 446% profit margin and sells for one one-hundredth of a penny. Do a 20 year chart on it. It is a "has been". The company's next step will probably be to file for bankruptcy. I wouldn't touch it with a 10 foot pole. It is truly a piece of crap Sarge. Not worth anyone's money.

Universal Detection Technology: OTC:UNDT quotes & news - Google Finance



Look for listed midcap or largecap companies that already make money with good growth. If you want something with some volatility (and a little excitement), then add "Beta" to your search parameters. Just understand that the greater the beta, the faster it can go up and down.

[SARGE]

I have a solid portfolio of 15 stocks, buy and sell at random. Etrade and Scottrade are fun. A few buds are "financial advisors" by livelihood and can't stand me investing on my own w/o their expert advice. My response is all the rules went out the window in 2008. Was just wanting to play around with, as you say "mad money". To think one could buy 10k shares of something for a buck...

[glc]

Originally Posted by SARGE So for $1.00, I can get 10,000 shares of this for example? UNDT.OB: Summary for UNIVERSAL DETECTION- Yahoo! Finance Just imagine what Apple or Google began at and you had bought 10,000 shares or more.

Looks like ZERO to me...........not even 1/100th of a cent.

[Force Flow]

Somewhere around the time of the dot-com boom, I remember there being penny stocks for start-up VoIP companies (essentially, the beginnings of what what google voice or skype ended up being). For months, these penny stocks that were dirt cheap. Then all of a sudden, they started rapidly increasing in price in several spurts, then suddenly crashed.

IMHO, no-name penny stocks can be as risky or even more so than big-name company stocks.

[SARGE]

Originally Posted by Force Flow Somewhere around the time of the dot-com boom, I remember there being penny stocks for start-up VoIP companies (essentially, the beginnings of what what google voice or skype ended up being). For months, these penny stocks that were dirt cheap. Then all of a sudden, they started rapidly increasing in price in several spurts, then suddenly crashed. IMHO, no-name penny stocks can be as risky or even more so than big-name company stocks.

Yeah, I got tons in AT&T - yawn. Fun to roll the dice though with play money. Vegas loves me and gal bud

[David M]

Exactly. It is fun to play with volatile stocks. But as you know "dont bet the rent money", as they say

[SARGE]

Originally Posted by David M Exactly. It is fun to play with volatile stocks. But as you know "dont bet the rent money", as they say

Yeah, gal bud boss as conservative as they come, not a coupon clipper but close. Trying to get her into the online (Etrade) but she's afraid of taxes. Won't even play with $500. However, get her in a casino (Horseshoe or Vegas) she will stay up for days at a Craps table. Imagine a lady rolling dice at 4 a.m. and you see her. Lady goes to bed every night at 9 but can stay up forever rolling dice. Have witnessed 2 breakfasts when still rolling the red dice, one with David Allen Coe at casinos. She prefers Craps over stocks. She always wins.

[Floppyman]

Stay away from penny stocks. If you want to benefit from market volatility, think about buying/selling options.