Penny Stocks

ignantchief

ignantchief

Member
Entered a portfolio challenge competition at my school... essentially the team with the highest return after 3 months wins. Were thinking our strategy is to just go all out in a rediculous penny stock hoping for huge short term growth in the 3 month period. Anyone got any good tipoffs?
 
honestly you have to pick one underground stock. mind you not a penny stock, but one that is at like $10 and invest all your money in it. If you get lucky it will explode and you will win. We did the same thing at my school and one kid had all his money in one stock and won by a landslide. If you try to diversify etc your growth will be too slow to win.
 
Our team was in 1st place out of like 8000 teams in 8th grade because we watched Jim Cramer's Mad Money show and invested every dollar into whatever stock he said was going to explode at the time and it did. I recommend you do the same.
 
Back when i played that game in my school, i came in first by investing in penny stocks. I used the ticker pnsn, which is about 1-2 cents a share and goes up a cent about once every day or so and goes back down very quickly, so you have to watch it. This may not work very well depending on how accurate your game is because that company has a really low market cap, so you can only buy a certain amount of shares, which i think was like around 100,000 or something. At my school, the game we used had no market caps and you could just buy however much you wanted, so at one point i was buying over 10,000,000 worth of shares at a time. After a week or so of doing this, i didn't even need to play anymore to win. So if you have no market caps, use that stock and you will destroy the other kids and your teacher will think you are a god.
 
Unless you're really good at watching when to buy and sell, penny stocks are tricky but can be promising as they gain value incredibly fast. However, once it's hit peak, they crash HARD.

Listen to Cramer on Mad Money about which ~10$ stock is about to boom, invest, chill for a month, profit, sell stock if going to die or keep if still climbing, repeat.

 
There's no way to predict stock movements especially not in the short term.

However I do have a strategy for you. You have no downside risk. You don't lose anything if you lose all your money but you win something if you win. So you want the most risky portfolio possible. Choose one stock that's the cheapest and has the highest volatility you can find and put all your money in it. Yes a penny stock is a good choice. The cheaper and more volatile the better since the cheaper it is the better chance of a large % increase.

There's really no sense in diversifying your portfolio with more than one stock (more on this later).

If you can, spend all your money buying call options on this stock since they give you even more potential upswing than just buying the stock.

If you can, also borrow money (probably not allowed) and buy the call options if you can or the stock since this gives you more potential upswing.

The real strategy comes into play if your stock shoots up before the 3 months is up. Then it's a little bit of game theory. The question would be what return do you think you'll need to win? Obviously this depends on a lot of factors like how the market is performing, how many people are playing the game, and what type of portfolios your peers invested in.

If you're just playing against a small class you may want to take on a less risky portfolio (by buying other stocks that are just as risky not by buying less risky stocks!!!).

And even better strategy if it's allowed might be to short some high beta stocks. Most of your peers are going to do well if the markets go up but very few students will do well if the market goes down since most won't think of this strategy. If you even take a moderate risk short position then if the markets go down then I think you would have a very high chance of winning.

 
I am him.

lol that was 90% luck. I had a downturn one week and the game lost my attention. Saw the thread 6 months later to find that I was in first winning by over 1 mil.
 
Would highly recommend using some sort of DCF model. Go to damadoron.com and use some premade ones in order to find undervalued securities. 3 months isnt that long. It will honestly come down to who is lucky with their picks for the most part, we did something similar back in high school and had same outcomes .It literally came down to who got lucky.

That being said, study the news, economic indicator predictinos, etc and lever up in some options you can make some serious dollars, then again you can lose a lot
 
Find a stop that has a tendensy to jump up a few cents and drop a couple(look at amd, thats what i used)... invest all ur money and borrow as much as u can , and just buy and sell.
 
my class is doing the same thing also except we arent allowed to use penny stocks which is bull.
 
if you're gonna go pennystocks, I suggest you just daytrade them and flip em quick if they double. Problem is, the volume is so low that its hard to sell em off fast and you most likely end up losing most of your money because of the fact that the stock itself isn't very good.

I can't really suggest any companies to go for, otherwise I would have already invested in them myself. But for now I'm in $LINE $BAC and $AZPN. I'm sure the returns I've gotten this year from them wouldn't win you the competition, but they've certainly helped me a lot.

Just remember, its not about the price of the stock or how good it is, but instead if it's overvalued or undervalued. You can buy a shitty stock at a low price and flip it quick when it stabilizes to make a nice profit, but if you get too greedy with a volatile stock, you'll lose it all. Just look at $ARIA and $JCP lately. Not something to fuck around with
 
Don't invest in penny stocks, they're honestly just bs. Don't run DCF models on your companies in a stock picking contest-sorry KravtZ- this is a reasonable tool for longer term investments (if you can model correctly). Take a look into either the latest biggest winners for a potential short play, or losers with value. Or just short the shit out of NFLX and watch it hammer. Also, VIX on the rise with delayed/poor US data? Might be time to look options. Right now if I was playing an investment picking game I'd be writing call options on NFLX and equities in general, buying rates and generally selling a few oil contracts. Would I do any of the above, long-term? Hell no. Take advantage of the short term test and run it-pm of you need help
 
i did that in a business class and made bank but dont hold the stocks too long cause they fluctuate so much. Id try to switch it up and just buy the top trending penny stocks that come up each day
 
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