Should You Invest In Penny Stock

A Word About Penny Stocks: You may or may not have heard the term “penny stocks” before. It almost sounds like an attractive term, seeming to indicate stocks from companies that have just gone public or are just starting out. Everyone’s got to start somewhere, right? The penny stocks of today could be the Microsoft and Google of tomorrow, right?

Not necessarily.

The Securities and Exchange Commission (SEC) considers any stock that is trading for less than one dollar per share to be a penny stock. According to Investopedia dot com, different investors and investment companies may have differing definitions of what a penny stock is. The one thing that most agree on is that they are risky.

According to the experts at Investopedia, penny stocks are riskier than regular stocks because there is usually less information about them available, they do not need to meet any minimum standards to remain on the smaller exchanges where they are traded, there is not much history about the companies available, and they suffer from a lack of liquidity, making them harder to sell. Because of the absence of minimum standards requirements, these stocks are often targeted by fraudulent and dishonest brokers. Take a look at the film Boiler Room fro an indication of what some penny stock brokers may be up to.

They’re Not All Nay-Sayers

There are some investors that swear by penny stocks. Peter Leeds, owner of Penny Stock dot com, Peter Leeds dot com, and publisher of The Penny Stock Insider newsletter has made a career of recommending penny stocks to his customers, advising on which ones should prove worthy and which ones to avoid.

Leeds does make an interesting point regarding the different definitions of what a penny stock is and points out on his website that under those definitions companies can move in and out of the realm of penny stocks repeatedly over time.

One thing to definitely look out for is spam email offering great deals on penny stocks or any investments. Many of these offers try to tell you that stocks which are currently trading at high prices were once penny stocks. Microsoft and Wal Mart are common examples, but there is no truth to the claim. Both Microsoft and Wal Mart first went public with prices in the twenties and were never considered to be penny stocks under any definition of the term.

Consult your broker for more information about penny stocks and whether they’re right for you.

Written by Admin on May 9th, 2009 with no comments.
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How Did This Scottish Immigrant Became The Richest Man In The World Ever!

History shows that Andrew Carnegie was, at one time, the richest man in the world, but he wasn’t born that way.

His story is a true American rags to riches tale of a Scottish immigrant without a penny to his name rising to become a millionaire industrialist and this country’s “King of Steel.”

How did he do it? How did a poor immigrant, who got his first job working in a textile mill for about $1.20 per week, rise to become the richest man in America and then the world?

He invested.

While working for the Pennsylvania Railroad under a superintendent named Thomas Scott, Carnegie learned about the American stock market.

He was making about $35.00 per month at that time and invested his extra money in stocks. As he was paid dividends on those stocks, he invested further.

Soon he had the funds and the opportunity to go into business for himself and found success in the steel industry.

One might argue that Carnegie’s success story doesn’t mean much today. After all, Carnegie died almost a hundred years ago. When he was a young man, the nation was young as well.

There were opportunities then that don’t exist today.No one can mimic the success of Andrew Carnegie in today’s world.

Phooey.

While it’s true that the world is very different today than it was back in Carnegie’s day, and his story is rare (if it was so easy for everyone to become a multi millionaire, they’d be everywhere), there is much in Carnegie’s story that we can learn from and emulate today.

The nature of investing and investing well is really not much different today than it was when Carnegie started buying stocks. By following his example, we can also turn pennies into dollars, dollars into hundreds of dollars, and so on.By seeing the stock market as a long term investment opportunity and not a “get rich quick scheme,” people in today’s world can also take command of their destinies just like Carnegie did all those years ago.

Will everyone become powerful captains of industry and be among the richest people in the world? Probably not. But there is no reason why each and every one of us can’t take control of our own financial lives and start building today for a more secure tomorrow.

That is the spirit of what Carnegie did and it is alive and well today.

Written by Admin on May 9th, 2009 with no comments.
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An Austrian Immigrant Succeeds With His Chocolate Business Like None

Stephen Klein 31 arrived in New York from the Nazi-occupied Austria in 1938. Upon his arrival he literally spent two days in New York researching the chocolate buying habits of New Yorkers.

He observed that Americans bought the sweet chocolates more. Instead of selling sweet chocolates he decided to launch bittersweet, Viennese-type chocolates.

The Launch Model was simple too. He made a batch by himself and started selling door-to-door himself in the garment district of New York. The garment district was filled with immigrants and Klein’s continental candy turned out to be an instant hit.

In one year he brought his wife and brothers from Vienna and partnered with a local attorney to create a candy business. In 1940 Barton’s Inc started with one store. Within one year there after Barton’s had four stores. By 1951 Bartons was a near $7 million dollar business with fifty three stores.

Yes Barton is a thriving business today and is still producly doing business after 111 years. ie, One Hundred Eleven Years.

You can read the entire story of Barton’s history by visiting their site BartonsCandy.com Their site doesn’t talk about the humble beginnings of Stephen Klein and his heroic entrepreneurial pursuits.

Stephan’s story touched me and there are many lessons that can be learnt from it. Here are a few of my take homes.

If you really know what you want to do all you have to do thereafter is validate. A lot of entrepreneurs spend their valuable time chasing money instead of validating their ideas. Stephen Klein is an example, how you do not need to spend valuable time in extensive market research and pay hefty to analysts to prove the viability of a market.

Why sell the same thing that others a selling? why not sell some variety. Stephen observed what others were doing and just did the opposite. He sold tasty continental bittersweet candy to the sweet loving public. Talk about risk..:)-

Not sure if your product is going to click? Just create small quantities and sell it yourself. You don’t need a salesforce. Stephen made the candy and sold it by walking door-to-door.

Not sure how to target your markets, learn from Stepehen. He only sold his candy within an area where there were a lot of immigrants. Immigrant candy, Immigrant Consumers.

New to the area or the idea? Find a good partner. Stephen was probably lucky to find an attorney who understood candy business as well as the entity structuring & taxation well.

Written by Admin on May 9th, 2009 with no comments.
Read more articles on Immigrant Success Stories.