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| frusnak |
 Posted: Fri Dec 30, 2005 5:43 pm Post subject: |
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CFO
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I am not into penny stocks, I tried them and they are not for me. I think that a common person being able to buy thousands of shares and if the company takes off it could make you a bundle of cash is what makes them attractive.  My Father use to warn me about the power that institutional investers have on individual stocks and the market.  |
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| geb9696 |
| Posted: Fri Dec 30, 2005 5:47 pm Post subject: |
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Investing VP
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| It is true. Today I was watching aapl and one order sent it up over a dollar. 400,000 shares has the ability to take a stock through the ceiling. |
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| Im Not Warren Buffett |
| Posted: Fri Dec 30, 2005 7:15 pm Post subject: |
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CFO
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| Trading with such large volumes push up prices because if buy orders exceed the typical day's float, current stockholders will expect a premium over what the price is. This is magnified when the volume is smaller (less liquid stocks) and such stocks tend to have sizable bid-ask spreads. |
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| Im Not Warren Buffett |
| Posted: Fri Dec 30, 2005 7:28 pm Post subject: |
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CFO
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| frusnak wrote: | | If you think about it you have to find stocks that are out of the spot light... Get into a stock before it gets noticed, thats the draw of penny stocks. Live on the outskirts and pick away at the pie crumbs while no one is watching. |
That was the basic tenet of Peter Lynch, who says the average investor can beat Wall Street by getting into small companies before they attract the attention of analysts and fund managers. Although he didn't advocate for buying penny stocks, you have part of the idea right. Find a stock with only an analyst or two following it, and pounce if the opportunity is right. Mega-caps like GE have 30 Harvard MBAs following their every move, what kind of buying opportunity does that give the little guy? |
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| geb9696 |
| Posted: Fri Dec 30, 2005 8:05 pm Post subject: |
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Investing VP
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| When you buy in that high of an amount you take whatever the ask prices are which are often much higher then the current price of the stock. On Scottrade is the current price is 11.22 but the ask is 11.31 you will be paying 11.31 if you buy it at market price. I when I was reading Cramer's book I was confused at one point. He talked about one of his employees who used to work for a brokerage and that this person was more confortable shorting then going long because the brokerage would short the order to a client and give the the stock at the current price. Does this mean the would fill an entire order at the current price and then go short on all the shares that they could not get immediately? |
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