MINNEAPOLIS ( Stockpickr) -- I used to be the editor of a now-defunct publication called Penny Stock Winners. I took the job reluctantly.
When I hear the term "penny stock," I think boiler rooms, nonexistent assets, fraud, risk and pump-and-dump schemes. More important, I think about my reputation and why on earth I would want to be involved in a market that entails such things.
So before accepting the job, I did a little research. I've been in the stock-recommending business for many years, so I had plenty of material to work from. Was the penny stock world in any way, shape or form part of my modus operandi in picking stocks?
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What I found was a bit astounding. It turns out that many if not most of my biggest winning stock picks started out being penny stock recommendations. So there you go; it turns out I was, unwittingly, already a penny stock guru.
The main difference, of course, is that the
I was picking were real companies with very real growth prospects. They were not pink sheet beauties or thinly traded bulletin board fodder. My penny stocks traded on major exchanges while meeting the
Securities and Exchange Commission
definition of a penny stock: that shares traded for less than $5.
With comfort of confidence in making penny stock picks, I published my
first article on the subject
in late 2008, making my first five public penny stock recommendations. The idea was to try to bring some credibility to a segment of the market that until then was still rather shady.
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How did those five picks do? Well, if you like stocks that double, triple or quadruple in value then you would have hit the absolute jackpot with these stocks. There was not a loser in the bunch.
The biggest gainer was a poker pioneer, World Poker Tour. That 58-cent special traded way below its book value and was in the process of selling itself to a larger online gaming company. They then took that cash and parlayed that into an oil and gas merger that brought huge returns to those that stuck by the investment.