For the past eight weeks [June, 2006 have been spending a lot of time reading articles describing current market conditions ... trying to find out if this really affects penny stock investors.
Are we in the bull market ... are we going into the bear market? Or was the recent rally just a Dead Cat Boom?
Dead Cat Bounce indicates a short-term recovery in a declining trend. There is a (relatively) old saying in investing: even a dead cat will fly away if it falls down from a great height.
No matter how you cut it ... I don't know if it even matters to stock investors like me.
For example ... Shares of Japan soared this week as the report showed growth in manufacturing and exports. Markets across Asia rose on Wednesday as investors encouraged investors to turn a profit on Wall Street.
Strong earnings reports from two good stocks are hoping that rising interest rates will not benefit penny stock investors. Recent sales have been "just unrest," one economist said.
There seems to be an ongoing concern on this side of the pond. US stocks traded flat on Thursday as markets rallied on Wall Street on higher oil prices and downbeat economic data. So, who should we trust, is the market rising or falling?
How is the market in general terms? When it comes to stocks, the S&P index is down just 0.3 percent, the Dow is down 3.4 percent and the Nasdaq is down 2.9 percent. Not flashy data.
But for penny stock investors, the recent roller coaster ride is being reversed by many experienced blue chip investors. We know that the penny stock is often volatile and unpredictable.
The penny stock is more excited when the market is cheerful, in general, the penny stock moves to its tune. Why? Some investors go into penny stocks because they are reluctant or unable to do the work required to accurately estimate what these stocks can do.
By their very nature, it is almost impossible to know at what price a penny stock should be traded, and traditional economic ratios and industry comparisons are rarely effective measures for understanding penny stock value. Huge gains and losses in a day are not an exceptional event for penny stock investors.
So really, bull, bear or cat ... for penny stock investors this is another day on the computer screen. Work is fun .. but it is not easy. Of the 14,000 public companies in the US, approximately 3,300 are considered penny stocks traded on the OTC bulletin board maintained by NASDAQ.
Their visibility is low, chances are you have never heard of their CEO, and I suspect they have some organizational followers. And while they are very speculative, those who are more optimistic tend to target business plans and have a firm foothold in niche markets. And right now, they are flying under the radar of Wall Street.
So what do you do in an unpredictable market like we do? Continue to apply the same principle you always used when searching for unused penny stock. And enjoy instability
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