good penny stocks for 2011
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www.investing-performance.com
Good
Penny Stocks
for 2011
Disclaimer
� Stock speculation is very risky. It may not be
suitable for you.
� Do not trade with more than you can afford to
lose.
� Seek professional investment advice.
� This is not investment advice.
� No warranties, you are on your own.
Good Penny Stocks for 2011
When you have found a bunch of good cheap stocks,
you want to separate out
the ones that will go up
So you need to know
what excites investors
Different Types of Investors
� Buy and hold
� Day trader
� Specialize in specific
industries
Judge the Beauty Contest Judges
� Stock picking is like judging
which girl will win a beauty
contest
� You need to know what the
other judges like
The Ugly Duckling
� To get big returns, find the
ugly duckling that can turn
into a swan – fast
Ugly Ducklings
� Shells are ugly, ducklings
� They may have been
abandoned by their officers
� A deal can turn them into a
swan fast
Learning at Dog and Pony Shows
� IPO Underwriters give due diligence meetings for
brokers to sell their stocks
� As head of trading for a Wall Street underwriting
firm, I might go to two a week
� The company makes their pitch, then the
investment bankers ask questions
� Watching the judges judge stocks
Wall Street likes fads fashions
� Remember - The Internet boom –
Oil and gas boom – Gold stocks –
Technology – Conglomerates –
Uranium stocks – Railroads
Recent fads
� Swine flu
� HIV
� After 9-11
� Oil cleanup stocks
My favorite gold stock
� Scott's Liquid Gold went up
when gold first sold over
$800
� They make furniture polish
Fast Growth
� The prospect of fast growth
produces excitement
� Big untapped markets
� Proprietary products
No Competition
� Monopoly
� Proprietary technology
� Sustainable competitive
advantage
� The next big thing
Great Biotech Drug Idea
� Take it once and you have to
take it every day for the rest
of your life or you die
Beware Penny Stock Promoters
� Penny stocks promoters
often go into hot businesses
� Beware frequent changes of
business
Promotion
� Promotion drives stocks
� Especially penny stocks
Blue Sky Learn More
� The “Blue Sky”is often value
more than reality
� Imagination can get carried
away
� Reality is hard
Learn More
� Subscribe to my videos
� Go to my blogs
� http://www.investing-
performance.com
Learn More
� On Amazon.com:
– How to Find a Home Run Stock
– How to Pick Hot Reverse Merger Penny Stocks
John Lux
� Trader, investment banker,
former OTC Market maker &
attorney
� Lux.Investor@ gmail.comCopyright ©John Lux 2011
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