Stockhouse.com: Taking it to the street
Latest Broadcasts
SWEB
Internet/Technology
V.UNR
BASIC MATERIALS - METALS & MINING
V.PTV
BASIC MATERIALS - ENERGY
SKYLINE
Investor Relations
CMIN
Basic Materials – Metals & Mining
TPIM
Healthcare
An excellent place to start your search for new investments!
add to favorites print

Look at penny stocks as you would look at shopping – for the sale prices.

When I was in elementary school we use to get excited when our teacher brought out the overhead projector…and moved blocks of wood around to teach us math. What could possibly compete with images projected on the blackboard? That was mathematical teaching…and learning at its zenith.

Not surprisingly, times have changed.

In a bid to help enliven core academic subjects, students from fourth grade up to college, can, if their teacher is up for it, participate in something called “The Stock Market Game”.

The Stock Market Game is a curriculum-based teaching tool that allows students to paper trade $100,000 in an online stock portfolio to learn about long-term saving and investing. Naturally they compete with other schools across each state.

And, just like real life, some people lose everything, while others beat the market. Some invest wisely, others get really lucky.

By a stroke of luck…or sheer genius, one Indiana team "bought" Bear Stearns (NYSE: BSC, Bullboard) stock at $5.60 per share earlier this semester in the imaginary stock market game. Shortly afterward, the stock soared to nearly $11 per share when Bear Stearns and JPMorgan Chase & Co. (NYSE: JPM, Bullboard) merged in March.

"Being a loser made them a winner," said Greg Valentine, Director for the Center for Economic Education at the University of Southern Indiana.

When it comes to making money on the stock market, I’ll take lucky any time. I have no problem being right for the wrong reason. Yes, I’d sooner make money because I picked the right stock for the right reason. But that doesn't always happen.

Whether you’re trading real or imaginary money, the stock market is a paper game. While many believe that this game was created only for the very wealthy, what they fail to realize is that many of those millionaires obtained most of their wealth in the stock market – before they were millionaires.

And I’m sure there are a large number of stock market millionaires that cut their teeth with penny stocks. Frankly, whether you’re a grade four paper trader, love penny stocks or large-cap stocks, the same fundamentals to picking winning stocks still apply.

In discussing his own investing philosophy, Warren Buffet commented recently, “…there's no reason to get excited whether some analyst is recommending it or the company is splitting the shares two-for-one, or whatever.”

He went on further to say, “You should be able to write down on a yellow sheet of paper, 'I'm buying General Motors at $22, and GM has 566 million shares for a total market value of $13 billion, and GM is worth a lot more than $13 billion because ________." And if you can't finish that sentence, then you don't buy the stock.”

That way, when you buy your new favorite penny stock, you’ll have confidence in your decision. And it’s always easier to be an investor than speculator.

What to do if your penny stock drops in price? Buy more. Try looking at penny stocks the same way you would if you were shopping. Look for the sale prices.

If you’re confident in your penny stock when it’s up, you should be confident in it if it falls. Falling prices create the opportunity to buy even more of something that was already worth owning. And there are a lot of excellent penny stocks trading at bargain prices right now. 

ABOUT THE AUTHOR
John Whitefoot

John Whitefoot is the senior editor for Peter Leeds.  He publishes PeterLeeds.com, one of the most popular financial newsletters in North America, with over 10,000 subscribers. To get involved with Canadian and US penny stocks before they increase in price, visit www.PeterLeeds.com.

 
print
 
Stockhouse Conflict and Disclosure Policy:

Stockgroup Media Inc., owners and operators of Stockhouse.ca/com, has established rules to ensure that there is no appearance of impropriety on the part of any Stockhouse writers who discuss or name individual public companies in the content published on the Stockhouse websites. The content of Stockhouse Editorial articles are the opinion of the writer and any reliance on the content of these articles shall be at your sole risk.

Stockhouse Editorial writers may own, buy, or sell shares in public companies mentioned in their articles. Please be advised that a conflict may exist and that any investment decisions you make are your own responsibility. Additionally, our Editorial writers are not registered investment advisors. You should not make any kind of investment decision in relation to these articles or stocks discussed in them without first obtaining independent investment advice from a registered investment advisor.

Facts relied upon by our Editorial writers in arriving at their opinions are generally provided by the subject companies or gathered by our Editorial writers from other public and/or private sources. These facts may be in error and if so, the opinions of our Editorial writers may be materially different.

Rules applying to Stockhouse Editorial Writers

Stockhouse Editorial writers may own stock of any company they cover, but at the bottom of the article or within the article they must clearly and prominently state their ownership position in the company.

Stockhouse Editorial writers cannot solicit, accept, or agree to receive anything of value given or paid with the intent of influencing their editorial articles published on Stockhouse.

Stockhouse Editorial writers are not permitted to write articles that attempt to influence or benefit persons connected to the writer such as family or friends, , except where disclosure is made in the same way as if the writer him/herself owns stock.

Stockhouse notifies each Editorial writer about these rules but in case of a possible breach of our rules, we may not be in a position to find out or investigate the facts. We rely on the integrity of our writers to ensure that our rules are followed.

 
FREE REPORTS
 
SPONSORED NEWS LINKS
 
 
 
 
Today's Feature  
 
EAST WEST RESOURCE CORP
East West Resource Corporation is a Canadian junior resources company, listed on the TSX-V under the trading symbol - EWR. The company is based in the City of Thunder Bay, Northwestern Ontario, a regional centre for mining and mineral exploration services and a major transport hub at the head of the Great Lakes with direct links by road, rail and water to the worlds smelting and refining infrastructure...