Penny Stocks – Greed is not Always Good by:John Whitefoot

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I received an email last Friday from pennypic.com

, the free penny stock newsletter I subscribe to. I was quite excited too because they kindly told me to enjoy and relax on you're (sic) long weekend, because we have a major MONSTER announcement coming Mid Week

Then on Monday, I received another email reminding me to be prepared because they were announcing their next pick on Tuesday. I waited around Tuesday evening to find out what the next dead-in-the-water penny stock company they were being paid to hock was.

They stood me up. And continue to. Some penny stock newsletters dont seem to care about their subscribers. Perhaps those at pennypic.com graduated from the Gordon Gekko - Greed is good School of Business?

Still, if theres one thing online investing newsletters like pennypic.com (and others) do, its illustrate the need for both ethical and honest research and the need for penny stock investors to be aware of what theyre actually investing in.

Its tough for companies like pennypic.com to claim they offer decent research when the fine print tells you that they are often compensated for issuing penny stock profiles; more often than not, in stock of said company. Thats not the sort of information you should hide in the fine print.

Not only that, they can sell those stocks whenever they see fit. That could very well mean the morning after they send out their promotional copy touting a dead penny stock. For the record, I have yet to see a penny stock theyve hyped where they havent been compensated.

I think the more upfront a penny stock newsletter (or anyone for that matter) is with their intentions, the more trustworthy they are. My cable company called this week wanting me to sign on for another two year contract. If I agreed, they would give me a $60 credit. But what if I decide I want to cancel my account before the two years are up, I asked. The customer service rep said Id only be fined $200.

Tell people what theyre getting up front and the deal theyre selling might not sound like a deal after all. But then again, maybe thats what pennypic.com and the cable company are going for?

For my money, I want to be shown penny stock companies that are fundamentally sound with potential. I dont need to learn about a penny stock with a daily trading volume of 225 that no one has heard of. If investors havent heard of them, theres a reason. I want a penny stock with legs, not someone propping up a dead cat bounce.

For example, my friends at pennypic.com (who were paid 250,000 shares in said company) selected MCTH two weeks ago. Before their press release the shares were trading near $0.26; after their hyped profile it soared to $1.96. Since then it has dwindled back to a precarious ridge near $0.50 with significantly decreasing interest.

If I had followed the advice of pennypic.com and invested in this company, 2 weeks later I might want to ask the brains behind the newsletter why they thought this was a penny stock worth unveiling to their subscribers.

Id also like a little disclosure. Since you arent unbiased, I would love to know how much you (potentially) made off your subscribers. Or at the very least, Id like to know when the pennypic.com team sold their 250,000 shares. Are they still holding shares in the company because they believe it has a futureor did they dump them the day after their promotional piece went out?

Again, for my money, I want a penny stock newsletter that is 100% unbiasedand one that profiles companies that, 2 weeks after the profile, are still viable. I also dont need my penny stock companies to be undiscovered gems. Im happy with a juggernaut thats fallen on hard times.

http://www.PeterLeeds.com profiled Ford Motor Company on March 5 when it was trading at $1.87; on May 7, it hit an intra-day high of $6.54. Thats a 2 month gain of approximately 250%. As far as I know Ford Motor Company is still generating interest.

On January 6, PeterLeeds.com profiled Misonix, Inc. (MSON - Nasdaq) when it was trading at $0.95. Since then the company's share price has climbed 209%. 6 months later, MSON continues to have great momentum.

Granted, none of the penny stocks selected by PeterLeeds.com soared 650% like the pennypic.com pick did. Nor have they plummeted by the same margin. On the other hand, you could interpret it by saying, PeterLeeds.com didnt make 650% off its subscribers hard earned dollars.

As one online commercial I was watching noted, "If you don't understand the numbers, the risk goes up." And perhaps more importantly, "It's the people behind the risk you have to be cognizant of."

While greed may have been good in the high flying 1980sI think penny stock investors have since learned that you can still make money without trouncing on others. Or maybe not. Well find out when Gordon Gekko, in the sequel to Wall Street, hits cinemas.

About the author

John Whitefoot is a seasoned penny stock investor with a keen interest in international business and current affairs. As Sr. Editor of http://www.peterleeds.com, John Whitefoot is devoted to uncovering the news, trends, and ideas that affect penny stocks on a daily basis.

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