Buying Penny Stocks The Lazy Investor’s Way

By George Best | December 28, 2009

Buying penny stocks, although it can be highly profitable, can also be very risky. The amount of risk involved can be significantly lowered by thoroughly researching the stocks you are interested in, but the research can be very difficult 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.

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!

Unfortunately, just as penny stock investing can provide very high profits very quickly, buying penny stocks can result in big losses quickly too. Besides the normal risks that occur just from normal market forces, penny stock investing is especially risky due to the relatively high rate of fraudulent practices by sellers of the stock. Corporations that issue penny stock are not required to submit financial statements to the SEC, so it can be hard to find good information that you can rely on when trying to evaluate 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.

Recently, a penny stock buying robot, called “Marl” was created by computer programmers who also understood the intricacies of stock investing. Marl uses mathematical and statistical analysis of trends to predict stocks that will likely increase in value by large percentages. Marl has the obvious advantage that he can do in-depth analyses of many stocks in much less time than a human would take to study just one. Another big advantage of Marl is that he’s cold and calculating and maked his pics strictly on mathematical analysis – there’s no pesky emotion to get in the way of making sound investment decisions. Of course there’s no way to pick a winner every time, but Marl has a much better track record than any human and this greatly reduces the risk of penny stock investing.

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.

George Best is a small investor from San Antonio, Texas. To learn more about Marl and how he works, please visit buying penny stocks.

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