Penny Stocks For Dummies
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Investor manias are not going away. They've been around for hundreds of years, and they'll be around for thousands more. As long as people want to jump on a trend that could make them rapid money, and as long as they feel competitive when their associates are cashing in, you'll see more penny stock stampedes.

Investor manias have now become perfected, due to

  • Speed: Information can flow at light speed now, and that really fuels the penny stock manias from the beginning to the peak.
  • Efficiency: With email, Twitter, and websites, a little effort goes a long way with modern stock market stampedes.
  • Reach: No corner of the planet or demographic is hidden from the modern penny stock mania. Anyone with Internet access can be sent marketing messages — and mania-inducing information.
  • Cost: Millions of tweets or emails can be sent for pennies, and given that a mania usually only needs a few dozen victims to get started, even the smallest of budgets can help a rumor begin and spread.
These points represent the final parts of the puzzle. Expect the frequency, impact, and scope of stampedes to increase in the coming years.

You can't know exactly what form the next mania will take. Perhaps it will be based on some technology that no one has yet dreamed about, or a concept that springs up out of the blue. All you can know for certain is that the event will involve one, or several, penny stocks — and of course that the vast majority of investors will end up with significant losses.

About This Article

This article is from the book:

About the book author:

Peter Leeds, also known as The Penny Stock Professional, is the publisher of Peter Leeds Penny Stocks, a popular financial publication with over 50,000 subscribers. He is also the author of Invest in Penny Stocks.

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