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