Penny Stocks Holding Their Heads Higher

Warning: What you're about to read may not be for every investor.

Some of you are old enough to remember the beginnings of Nasdaq. The year was 1971, and there were thousands of so-called over-the-counter (OTC) stocks being traded, well, over the counter.

Most trades were executed by phoning a securities dealer and ordering shares much as you'd phone in a pizza order today. And if you were downtown in a major city, you could walk into a dealer and buy securities literally over the counter.

Then along comes the Nasdaq -- National Association of Securities Dealers Automated Quotation -- system. Nasdaq computerized and dramatically streamlined quotation, trade and dealer operations.

But it also legitimized a large segment of the dark and murky OTC world. Nasdaq became a brand and a widely accepted way to trade securities. And you know the rest of that story: Today, Nasdaq is the biggest and one of the most legitimate public securities markets in the world.

And that story may be at the beginning stages of repeating itself with the Pink Sheets LLC market in OTC stocks.

Actually, Pink Sheets has been around for 90 years as a quote bureau (its former name is the National Quotation Bureau, or NQB): Quotes and information on OTC securities were provided on printed pink sheets for dealers and traders.

Want more? Check out TheStreet.com TV video. Jennifer Openshaw makes the case for Pink Sheets investing.

That process has been largely automated, and Pink Sheets now feeds a lot of data into standard stock portals and trading platforms, along with research, news releases and financial information.

So what kinds of companies does Pink Sheets specialize in?